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Hi there,

Inspired by pandemic-infused work-from-anywhere possibilities, I spent some time in Florida over the summer with my family. 

On my return flight out of Orlando International Airport, I tried to access the airport’s Wifi and was asked to fill out a quick customer survey.

Unfortunately, I got stuck on the first question.
It appears that Orlando’s airport team hasn’t read our Blurred Travel Analysis yet. 

Otherwise, they wouldn’t differentiate between business and leisure travel anymore.

By the way, if you are wondering how airports and airlines can leverage the blurring lines between the home and office as well as business and leisure travel, you can join the discussion on LinkedIn right here.

There’s a lot to talk about and your input is highly valued. 

It is high time we come together as industry innovators and push for a new era of customer understanding and centricity. 

Without this, as The Washington Post has argued, we will soon see the airline sector return to “normal levels of indifferent service.” Ouch!

Today’s newsletter specs: 1,314 words for your reading pleasure, which translate into roughly six minutes of time.

Enjoy.
Lennart Dobravsky
Editor-in-Chief
 Trends 

An Unexpected Boost For Shared Mobility

Rising gas prices hurt consumer spending and jeopardize economic growth.

However, there are also some unanticipated benefits associated with the increased cost of fuel that might accelerate the world’s transition towards shared mobility modes.

Here’s why.

Our analyst Anna discovered an intriguing relationship between rising gas prices and the demand for shared mobility.

As gas prices have soared in recent months, so have download figures of shared mobility apps. These include Uber, Blablacar, ShareNow, FreeNow, and Cabify, alongside e-scooter providers such as Lime, Bird, Tier, and Voi.
Now, correlation doesn’t imply causation, of course. 

Seasonality effects, for instance, could have boosted shared mobility demand as well—the warmer the weather, the more people typically use scooters. 

To learn more, we'll take a closer look at how this correlation evolves over the next few weeks.
 Travel 

We Knew What You Were Up To This Summer

Could this year’s summer travel chaos have been better anticipated?

Some people would argue yes while others would say no.

In particular, airport executives across the globe believe (or want travelers to believe) that the massive pent-up travel demand this summer was hard to predict.

We studied the earnings calls of several major airlines around the world dating back to Q2 of 2021. In doing so, we took a closer look at industry talk across the quarters leading up to this summer. 

With the help of Natural Language Processing, we analyzed all statements from these calls and derived a couple of interesting insights.

Here are two examples (there are more to come in the future).


Firstly, we found that rapidly accelerating travel demand for this summer was already heavily discussed in Q4 of 2021.
  • In fact, projected travel appetite was the second most-discussed topic among airline executives and Wall Street analysts in Q4 2021. It was only second to airlines’ financial performance (the actual reason for earnings calls taking place).
  • 90% of commentary around the upcoming travel demand in Q4 2021 had positive connotations. This means that decision-makers in the industry optimistically anticipated what would turn out to be a rapid comeback to near pre-pandemic travel numbers.
Secondly, with the expected growing travel demand, operational bottlenecks were heavily mentioned shortly thereafter.

During spring in Q1, discussions surrounding operational challenges, such as a lack of ground operation equipment and supplies, not enough technical operations teams, and limited airport capacity, were frequently brought up. 

In fact, this was the case more than twice as often compared to the previous quarter.
With these numbers in mind, it’s time to take the L. 

Let’s face it. The industry knew what was coming.
 Startups 

Update On The State of Air Taxis

There is a lot happening in the eVTOL, a.k.a. air-taxi ecosystem, these days. 

Here are four of the many industry events that took place over the last few weeks alone:
  • Volkswagen Group China unveiled its passenger-drone prototype as part of the firm's new strategy to explore fully electric and sustainable individual mobility concepts in the air.
  • Archer Aviation received a $10 million pre-delivery payment from United Airlines for 100 of the company's initial production eVTOL aircraft.
  • German eVTOL protege Lilium made its long-awaited public test-flight debut in Spain last month—the first time journalists were able to witness the Lilium jet take off. 
  • Finally, Lilium joined forces with helicopter shuttle operator Helity to offer an eVTOL network in Andalusia in the future.
All of these dynamics convinced us to revisit our VC funding overviews in air-taxi startups.

Below, you can see that Venture Capital investments in 2022 thus far have gained a lot of momentum, which is in line with the aforementioned industry events and recent media noise.
The 2022 dollar amounts are remarkable, given that the tech industry at large has suffered through a severe downturn over the past six months, one that has led to stock markets and VC investment figures to take a major dive in 2022.

Germany’s leading business magazine Handelsblatt picked up our analysis and took a more granular look at the current state of the air-taxi ecosystem.

It’s worth a read, especially if you’re interested in a side-by-side comparison of German air-taxi contenders Lilium and Volocopter. Read here.
 Startups 

Is This A Major Milestone For Travel and Mobility Tech?

Q2 earnings season is in full swing. 

Last week’s announcements by arguably the most iconic Travel and Mobility Tech company out there —Uber—appears to be a major milestone for our sector.

According to its Q2 press release, Uber became cash-flow positive! 

And this is for the first time ever, after 13 years in operation! 

Uber’s performance was primarily driven by the 1.87 billion trips made last quarter, which represents an increase of 22% YoY.
So, what makes this potentially meaningful?
  • Well, Uber appears to be the perfect example of a tech company that has successfully switched from growth to cash-flow mode. This is in line with changing investor expectations, given higher interest rates and a more cautious financial environment.
  • Uber might also have proved that scale, ultimately, can lead to profitability, something that nearly all mega-financed startups of the past decade have promised for years. However, there has been little to no proof that this could actually work.
So, the question remains as to whether or not Uber’s most challenging days are behind the company and if it can now start milking the cash cow.

Well, not so fast. 

The Lufthansa Innovation Hub’s Chief of Staff and former investment manager Sven Kämmerer took a closer look at the numbers and he has some serious doubts. 

Here’s why:
  • The adjusted EBITDA profitability metric Uber is reporting is what investment legend Charlie Munger refers to as “Bullshit Earnings”.The issue is that (adjusted) EBITDA and Free Cash Flow (FCF) are non-GAAP measures. Essentially, management teams are very free in defining them in whatever way suits them. One has to look at the reconciliation between GAAP Net Income and their adjusted EBITDA figure to understand how the company is actually doing.
  • If we scroll to the very end of the earnings release, we see a reconciliation table. Here, it shows that Uber’s true accounting profit for the quarter was, actually, a $2.6 billion USD loss! Only when the company added back half a billion dollars worth of stock-based compensation, all its net losses on debt and equity securities, legal and regulatory reserve changes, as well as taxes, interest, and depreciation & amortization, the firm was able to report a positive adjusted EBITDA.
While we are sympathetic to them adding back their losses on equity investments (one can reasonably argue that these aren’t necessary to run Uber’s business), we object to adjustments such as adding back employee compensation. Uber’s employees are absolutely critical in running the company and simply ignoring the cost associated with them is misleading.

Long story short: when one ignores major cost items, Uber is profitable. 

But that’s simply not how business works.

On a similar note, well-known Uber analyst Hubert Horan put together a great piece, which demonstrates that Uber has an inherently higher cost structure than traditional taxi companies. Given this, the firm’s long-promoted pricing advantage seems illusionary. Read more about it here.
 Press Picks 

Our Recommended Must Reads 

HYDROGEN BOOST  Airbus invests in world’s largest clean hydrogen infrastructure fund, joining the world’s largest clean hydrogen infrastructure investment fund, managed by Hy24.
 Read more by Times Aerospace  
REMOTE OR IN-OFFICE  Venture Capital veteran Fred Wilson shares his take on the WFH vs. office debate with a balanced take, embracing a hybrid model that will combine the best of both worlds.
 Read more by AVC
FUTURE OF TRAINS – Paris to Berlin in an hour? Welcome to the future of high-speed rail travel in Europe. Let's imagine a future in which international travel is smoother and doesn't revolve so much around flying.
 Read more by euronews
URBAN MOBILITY – Google Maps makes major update to cycling navigation. Features include warning of routes with heavy motor traffic and highlighting alternatives with better cycling infrastructure.
 Read more by Road.cc
NEW AIRLINE PRODUCTS  Interested in ten creative ideas for airlines to become more innovative? Check out this blog post on ten tips for creative carriers.
 Read more by Airline Revenue Economics  
 Deal Tracker 

Most Recent Venture Capital Deals

Verdego Aero – the developer of hybrid-electric propulsion systems for aviation raised $12M in Series A venture funding in a deal led by RTX Ventures. The company is based in the US and previously raised a total of $0.75M via two angel rounds in 2021 and 2017.

ShareTrip – the online travel booking platform from Bangladesh received an undisclosed sum in later stage venture funding from Startup Bangladesh Limited, a venture capital fund sponsored by the Bangladesh government. Reportedly, the investment puts the company’s post-valuation at $50M.

Digitalhotelier – the London-based hospitality operations software for distribution was acquired by Cendyn, the developer of a cloud-based hospitality platform, via its financial sponsor Accel-KKR, for an undisclosed sum.

Conferma Pay – the virtual payment provider specializing in business payments for, among other industries, hotels and travel expensing was acquired by Sabre, the US-based Travel Tech incumbent.

Lohospo – the German developer of a booking system and frontends for holiday rentals, hotels, and agencies was acquired by Bookiplay, a subsidiary of Munich-based travel search engine Holidu. The terms of the deal were not disclosed.

my.IRS – alongside Lohospo, the provider of the TOMAS booking system for tourism firms active in Germany, Austria, and Switzerland, was acquired by Holidu for an undisclosed sum.

Arbitrip – a 51% stake in the business travel management platform headquartered in Tel Aviv was acquired by Talma Shlomo Travel Solutions. The company and investment group provides private tourism services for the business and leisure segments.

Bornholmske Feriehuse – the Danish operator of a vacation home search platform was acquired by Dancenter, the Denmark-based subsidiary of OYO Rooms, for an undisclosed amount. 

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