Hi there,
multiple sources tell us that the handshake has been witnessed to make a comeback.
As the world reopens, people are extending their hands again.
This gives me chills.
For those of you who are anxious like me about the right rituals around greeting each other, here is a quick reminder of a chart that we shared with you last year.
Turns out that the fist bump transmits 80% fewer germs on average than the traditional handshake.
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Now, what's new in Travel and Mobility Tech this week?
We have to talk about the biggest PR stunt in 2021 so far. More on that below.
Today's newsletter specs: 1,291 words, a solid 6-minute read.
Lennart Dobravsky
Editor-in-Chief
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Overcoming the mobile app fiasco in the airline industry
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In the airline industry, the past 15 months have been characterized by an unprecedented volume of flight changes and cancellations.
These have largely been the product of constantly changing lockdown measures, travel bans, and border control regulations.
The results:
- Air travelers have been confused about the major information asymmetries they’ve faced.
- And airlines have had to process an overwhelming amount of refund and rebooking requests.
While frustrating for both parties, this mess could have been avoided—at least to some extent—if only the airlines had realized in the years leading up to the pandemic, that being more digitally-prepared translates to being more crisis-resilient.
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One solution could have been to have well-functioning digital interfaces in place—like a user-friendly and feature-rich mobile app.
This would have enabled automated digital self-service and provided a direct communication channel for carriers to seamlessly inform travelers of the latest flight updates and travel restrictions.
Unfortunately, this has rarely been the case.
Let's call it what it is: most airline apps stink.
They offer little value beyond checking in for a flight.
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This airline app fiasco becomes evident when comparing engagement stats for airline apps to most other travel apps.
Airline apps lack relevance, both in terms of size (how many people download them) as well as engagement (how many people use them after download) as this chart shows:
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So what to do?
It's high time to rebuild the airline mobile app experience.
My colleague Xiaowei has some helpful tips on how to do this by introducing some of the carriers who are re-imaging the mobile touchpoint for the better.
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Tracking investments into air taxis and cargo drones
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Flying taxis are being taken seriously by leading investors, automakers, and aviation companies.
They appear to be on the cusp of reality.
No wonder that funding events related to promising air taxi contenders have recently filled a lot of headlines, primarily driven by the hype of special-purpose acquisition companies (SPACs) which we recently explained in more detail.
- Archer Aviation was one of the first air-taxi startups to announce plans to go public through a SPAC merger in early February.
- Joby Aviation followed soon after by becoming a public company through a merger with Reinvent Technology Partners.
- And Germany’s second eVTOL frontrunner, Lilium, entered the Nasdaq in early April through a SPAC deal valuing the combined company at an approximate $3.3 billion.
With all this money being pumped into the market, it’s hard to stay up to date with the latest investment deals.
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To address this need, we launched a new research tool: the Advanced Air Mobility (AAM) Investment Dashboard.
The AAM Investment Dashboard is currently focused on tracking investments in startups that are active in the development and manufacturing of passenger eVTOL vehicles aka air taxis.
However, over time, we will expand the scope and also capture hybrid and cargo drones as well as startups from other AAM industry building blocks, like infrastructure providers, MRO services, and flight operations.
Therefore, feel free to bookmark this page, so you can return regularly.
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PR stunt or bold strategic move?
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Last week, an exciting message by United Airlines flooded the front pages of almost every major news site:
The US carrier announced that they had purchased 15 supersonic jets from startup Boom Supersonic with the option to purchase 35 more at some point in the future.
What appears as a visionary and bold strategic move by United is most likely more of a smart promotional stunt.
Because what most articles failed to mention:
- The purchase agreement represents a tentative order as the execution of the deal depends on highly ambitious performance criteria which Boom’s future „Overture jet” has to fulfill (e.g. being a net-zero carbon aircraft).
- In order to fly faster than the speed of sound, supersonic planes require substantially more energy and fuel burn, which generates between 5 and 7 times more carbon emissions per passenger than today’s long-haul jets, so the environmental component appears extremely hard to crack.
- However, jet delivery is not expected to take place before the end of the decade as the Overture has not yet been built or certified. This gives Boom another 8-10 years to drive forward the development of its futuristic jet.
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Even though the entire story appears a lot bigger than it actually is, kudos to United for this strategic play. There seems little to lose for United.
- If Boom pulls off the impossible and meets all criteria, United will be remembered as the revolutionary first mover, spearheading the (sustainable) supersonic air travel era.
- If Boom fails to deliver (which appears more likely as it's usually the case in startup land), United can simply walk away from the deal.
This is not the first time, United’s CEO Scott Kirbly pulled the powerful innovation card to strengthen the carrier’s narrative about driving forward the decarbonization of air travel.
- Earlier this year, United placed a similar tentative $1 billion order (including an equity investment) to purchase futuristic air taxis manufactured by eVTOL startup Archer Aviation. This deal is also contingent on Archer winning safety certification for its aircraft and showing that it can meet the airline’s operating and business requirement.
While it’s easy to label both of these moves as blatant innovation theatre, United did what other airlines often lack: executing visionary storytelling and providing a growth story based on breakthrough innovation instead of incremental improvements (like a new cabin layout).
This will likely set the foundation for attracting more capital and talent in the years to come and help United initiate a more risk-seeking corporate DNA.
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Back to the supersonic case
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With all this being said, how realistic is the supersonic air travel revival? Not only from a technical perspective but also in terms of consumer interest?
Who would be willing to pay for this faster, but definitely more expensive way of traveling? The necessary price tag for Boom to run their jets profitably would probably not start below USD 5,000 for an intercontinental flight.
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The first-ever price sensitivity study
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Last year, we took a closer look by sharing one of the first-ever publicly available price sensitivity surveys in the supersonic context.
We tackled the questions:
- Do travelers across the different cabin classes have any interest in flying supersonic?
- If yes, how much would they be willing to pay?
One of the takeaways: Not only does the environmental hurdle for the supersonic revival present a showstopper, but the business case appears to be shaky as well.
Take a read.
The research piece is certainly as relevant today (or more) as it was last year.
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Our recommended must reads
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NO SELF-DRIVING CARS? – No matter what Elon Musk says, experts aren’t sure when, if ever, we’ll have truly autonomous vehicles that can drive anywhere without help. First, AI will need to get a lot smarter.
 Read more by the Wall Street Journal
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ELECTRIC FLIGHTS – Zero-emission, all-electric flights are closer than you think as Canada-based seaplane airline Harbour Air aims to offer zero-emission, all-electric commercial flights by 2022.
Read more by EnergyMonitor
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GERMAN TRAVEL SPAC – Who said investors no longer want to bet on consumer-facing travel startups that compete with Google? Berlin's HomeToGo is in talks to go public via a blank-check company owned by Lakestar.
Read more by Skift
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SPACE TRAVEL PARADOX – When it comes to human space travel, the destination really is the journey. And the journey will be long, and claustrophobic. Deep-space human travel is a lose-lose proposition.
Read more by Slate
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FIXING CUSTOMER SERVICE – The pressure to improve customer support was already hitting the travel industry pre-COVID, and the demand for quick, personalized, and effortless interactions has only taken off.
Read more by Phocuswire
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SUSTAINABILITY CONCERNS – Travelers globally have listed overtourism, pollution of beaches/waterways, deforestation and energy inefficiencies as their main concerns of the impact of tourism on the environment as latest travel trends survey shows.
Read more by Webintravel
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Most recent Venture Capital deals
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