“The idea is to bring back the romanticism of getting technologists into the travel industry,” says JBV President Bonny Simi.
JetBlue Technology Ventures’ offices at the San Carlos Airport places the airline-owned investment firm “literally” in the middle of Silicon Valley, noted JTV President Bonny Simi. That proximity to the center of the global tech industry represents a distinct purpose.
The location allows the three-year-old JTV the chance for an up close view of all the travel tech startups that are seeking to make an impact on the wider world JetBlue Airways operates in.
“Why is that? It’s not that most of the travel startups are from Silicon Valley,” said Simi, in a presentation at ARC’s TravelConnect September conference. “In general, 40 percent of the world’s technology startups are based around Silicon Valley. Almost all of the rest do make tours around the area. As an airline, we get to see almost everything coming.”
In outlining the reasoning behind the creation of JTV, Simi discussed how air travel is being affected by the technological changes of the past 20 years. In her estimation, technology is being transformed yet again.
Given JetBlue’s enormous ambitions, such as its plan to offer transcontinental service to Europe in 2021, the airline can’t afford to lose pace with the world around it.
“Innovation is in our DNA,” she said. “We set out to disrupt the travel industry. We’re 20 years old. As we grow, it’s very hard to innovate in a low margin industry –especially when you’re always focused on cost and operating an on-time, airline safely.
“So the question for JetBlue was: How can we ensure that we’re relevant as time goes on?”
The answer was to form a corporate venture firm that would allow the airline to direct greater insights from new players and their new tools. Plus, JetBlue would be able to build and maintain an important seat at the table when it comes to the future of autonomous vehicles, blockchain, and artificial intelligence and machine learning.
“We have nice route map, but we’re only 5 percent of the US domestic airline market, serving 105 cities and growing,” Simi said, discussing how JetBlue’s position made the move into investing imperative. “No matter what industry you’re in, if you’re stuck at 5 percent of anything long-term, you may not exist. So we’re expanding internationally, expanded to Latin America and looking to expand in tech as we grow as an airline.
“Ultimately, we thought, how can we leverage our brand beyond JetBlue? The other part is to think about what’s happening in the world,” she continued.
“There are these fundamental platform transformations that happen every 10-, 20 years. In the mid-90s, the internet completely disrupted our world,” Simi added. In 1995, the first airline ticket was sold online. Fast forward to 2007 when the iPhone and more broadly the smartphone emerged. That’s an entirely different platform.”
Along with that, Amazon emerged. For Simi, Amazon’s identity as an e-commerce hegemon isn’t what’s interesting; rather, it’s Amazon Web Services and all that it supports.
In a sense, JetBlue would like to play a similar role both within and beyond aviation-centered technology.
“We started to see a lot of disruption models occur in 2009,” Simi said. “It’s now happening so fast now.”
JetBlue Technology Ventures' Investment Focus (From Simi's ARC TravelConnect 2019 Presentation)
The role gathering and analyzing the enormous data that all companies are trying to understand is where Simi also sees a different role for airlines to play. Specifically, she argued for the need to change the what the job of airline revenue management traditionally does.
We caught up with Simi following her presentation and panel discussion at TravelConnect to delve more into what she’s thinking about these days. (And for another look at JTV's investment interests, check out our interview with Amy Burr, JTV’s managing director of operations and partnerships, here.)
Kambr Media: What are the main forces spurring travel tech investments, particularly ones related to the commercial aviation sector?
Bonny Simi: Historically, venture capitalists had been afraid of travel technology because they just didn’t know much about it. But now, with travel providers in the space – like us at JetBlue Technology Ventures and other players like Amadeus – the thinking has grown more to be: “If the providers are involved and investing, this seems more safe.” We always bring in co-investors for every investment we do. The list of co-investors we have across our 25 startups has about 50 or 60 co-investors.
The second part of it has been the growth of ride-sharing and Airbnb as alternatives to traditional travel. Those new types of travel providers are less afraid of the tech stack because there is no tech stack – they're creating it. That disruption is attracting a ton of money and investment into those spaces.
JetBlue Technology Ventures President Bonny Simi on stage at ARC's TravelConnect 2019 (Credit: Kambr Media)
During your presentation, you mentioned airlines’ need for more data scientists. You also called for the industry to better train revenue managers as data scientists, in part, because employees who are strictly data scientists often leave aviation to join a general ad tech platform. Could you elaborate on that? Are revenue managers natural data scientists? Is this sort of training for revenue management something JetBlue/JTV does or wants to do?
We're exploring the white space that is the education of tomorrow's travel professionals. Everybody goes to the issue of the pilot shortage. But there's equally a shortage on the data scientist side.
The idea is to bring back the romanticism of getting technologists into the travel industry. We want to make it easier to thrive. It's really hard to do. There are many obstacles and there's very low unemployment at the moment. So, all that combines to make this a more urgent call.
That said, we've had a lot of success over the last three years with training in that area. We have a program called JetBlue Scholars to help provide continuous education opportunities for our Crewmembers (employees) and we're going to build on that. Upskilling the existing workforce is really important.
You mentioned backing companies like FLYR, which is attempting to offer better predictive technology within revenue management through the use of artificial intelligence and machine learning. Is the revenue management area ripe for disruption in terms of AI?
Absolutely. We've invested in that space and keep an eye on the other startups building out AI for predictive analytics. It just takes a deep industry knowledge to do it well.