Hold that plane!! It’s About Time to Start Getting a Fair Flight!
Summer vacation is coming and for all the YU students who will be flying somewhere, I want to tell you a little secret: The Israeli startup FairFly is about to change the game of booking flights! There is currently a huge problem within the tourism industry of soaring prices for a plane ticket. A second problem is the wide range of prices that exist for the same tier of seats on a flight. Just from striking up a conversation with the person sitting next to you on a flight, you might realize that had you booked the flight two hours later, you could’ve saved 200 dollars! Even if you check a million travel sites or try to pull the classic “book on a Tuesday, fly on a Sunday” move, you have no guarantee that the price of the flight won’t drop. Some will tell you that the best deals on airline tickets are at the last minute where you can snatch up that last empty seat at a bargain price. Others believe that booking as early as possible is the ideal move, preferably 45 days in advance. The bitter truth is that there is no one best way to book flights. All these strategies are based on myths and FairFly has just busted those myths. The good news is that Fairfly has developed an app that will help you deal with all your plane ticket booking problems.
FairFly’s goal is to increase airfare transparency. It was founded to solve the problem of volatility in ticket prices and bridge the information gap between airline and customer. It strives to make sure that customers get the fairest price for their flight. Whether travellers are flying economy, business, or first class, FairFly unlocks what is potentially hundreds of dollars worth of savings on airfare. The best part about it is that it’s a win-win-win situation! FairFly has a strong business, the customer gains from price drops, and the airlines are selling tickets.
FairFly was established in December 2013 by four entrepreneurs: Gili Lichtman, Ami Goldenberg, Aviel Siman-Tov, and Uri Levine. Lichtman, Goldenberg, and Siman-Tov, young graduates of the successful Zell Entrepreneurship Program at IDC Herzliya, teamed up with Waze co-founder and serial investor Uri Levine to develop the app and he helped them raise hundreds of thousands of dollars in seed funding. Before FairFly, CEO Aviel Siman-Tov was on his way to becoming a lawyer but came to understand that his real passion was for entrepreneurship; he aspired to build something that would make a major positive impact on the world. In addition to his legal background, Siman Tov has over 7 years of experience as a Company Commander in the IDF, helping him specialize in building strong teams and empowering each individual with tailored mentorship. CTO Ami Goldenberg has experience developing software from the age of 10 and has a real passion and love for it. He also has experience serving in the Israeli army, as he served in the most elite intelligence unit in the IDF. This is far from his first successful app as he became an Android Developer at Moblin before FairFly and single-handedly built over 15 apps that have been released on the Google Play store, with over 500,000 downloads to date. The last co-founder, Gili Lichtman, serves as the CMO (Chief Marketing Officer) of the company. The app was launched in January 2015 and completed its second round of funding the previous summer.
It all started when the four co-founders were enjoying coffee and chatting about travel experiences. Levine was on a business trip to Orlando and became frustrated when he realized he had overpaid for a hotel room. He brought the idea up at this coffee meeting with his students, who then decided there was a bigger issue with plane tickets. Following this, Levine led the first angel round of funding. Levine is quite the seasoned entrepreneur himself. He is the founder of Waze and FeeX, in addition to being a chairman and angel investor of Zeek, Engie, and Dreamzon. But that’s not all, as he’s also an investor and director for Moovit, Mishor, and Pixtr. Levine is now the chairman of the company and mentors other entrepreneurs that “address real problems in the space of drivers/transportation, money thrown to the garbage and inefficiencies in large markets,” as quoted from Linkedin. Levine has played a critical role in building what appears to be another great app, and he’s not the only one who thinks so.
In August 2015, FairFly signed a deal with Blumberg Capital, bringing the company’s total of money raised to $2 million. Siman-Tov said to Globes, Israel’s Business Arena, "The financing round was designed to enhance the development of the product and expand the company's overseas business. The company also plans to enter other tourism niches at a later stage." Alon Lifshitz, an Israeli partner at Blumberg Capital, was brought onto the Board of Directors of FairFly. Lifshitz was quoted in Globes saying, "FairFly is entering the tourism market, where it's changing the rules. Up until now, we've gotten used to a process with price comparisons until the decision to buy is taken. FairFly has changed our thinking, and has shown that the buying process does not end--even after we buy the ticket, the price can still be reduced. We feel very connected to this way of thinking and the fact that this is a big market, to which we are confident that FairFly is providing a suitable solution. We're glad to be a part of the company's development and success."
So how does FairFly work? CEO Aviel Siman-Tov explains that the first step is to download the app, available on both iOS and Android phones, and buy a ticket online through any of the many existing platforms. The next step is for the user to forward the e-ticket he or she receives to email@example.com. From this moment until flight time, the company’s proprietary algorithms get to work in real time. The program monitors the international airfare databases, and searches for a cheaper fare, after factoring in the ticket’s cancellation fee. The system then alerts the user if it finds the higher of two options. Either the ticket costs at least 5% less than the original ticket, after fees, or saves $50. The company takes only 9% of total savings, meaning you only pay if you save. In the future, it plans to extend its service to hotel bookings and vacation car rentals. The company stresses it will only cancel the original ticket after the cheaper priced ticket has been purchased. The only hiccup could be if the ticket was purchased through a travel agency. The customer will be issued the refund for the initial ticket a few weeks afterward in accordance with the specific policies of that airline.The purchase of the new ticket or the cancellation of the old ticket can be carried out through the FairFly system or independently by the individual customer. Maybe the best part is that the notifications sent to users aren’t just based on price alone, but include other, better deals such as more convenient takeoff and landing times, shorter flight times, better quality airlines, and more attractive airports. By automating the whole process of heavy research required to track price drops and look for better deals, FairFly completely eliminates the traveler’s risk of overpaying.
The impact of this groundbreaking technology has tremendous potential especially considering the numbers of flights company's book for business trips. Worldwide, 445 million business trips rack up a $251B yearly price tag, with $111B spent on domestic travel and $31B on international business trips. These travel expenses have been divided by the Global Business Travel Association into 5 categories of estimates. Transportation takes the largest portion at 22%, followed right behind by Meals at 21%. Flights took 17% while hotels are around 13% and the rest falls to Miscellaneous. FairFly’s potential savings are quite enormous for the average consumer but they are even larger for Fortune 500 companies that have thousands of flights each year. There are millions of dollars of cash to be saved by simply downloading the app, with no extra work required. The three young founders conducted an in-depth study of the matter. To research their market, they tracked the fares of 34 indirect business class flights from Tel Aviv to San Francisco. The price went down for 19 of the 34 flights in this sample group. But we aren’t talking small numbers here; over just a few hours the price dropped by $1,000. Based on the data they collected, the founders claim that they can save a business class traveler $822, and an economy class traveler $180. It’s just like finding money in your pocket!
Although the company holds many advantages it still has a few problems. One example is that FairFly’s service becomes useless when it comes to flights on low-cost airlines since it’s nearly impossible to cancel a ticket on these airlines. Additionally, the service does not work on hotel and flight combination packages. Another issue, which really only pertains to frequent fliers, is that the recommendations for cheaper tickets do not yet have the technology to take frequent flier points into account. These valuable points, depending on the airline, can earn free tickets or at least discounts to reward frequent flyers. The company said that these features are being developed and will be incorporated into the system in future app updates. Once it continues to advance and fix some of these problems, it will be an even better app.
To me, FairFly is already a homerun idea and should make both the customers and the company a lot of money. I’m not the only person who thinks so as they recently finished in first place at a TLV Startup challenge and have secured an impressive round of funding from Blumberg Capital. These are promising young Israeli entrepreneurs who have teamed up with an expert in their industry, Levine, and a successful venture capital firm that has money and is well connected. And in terms of their product, any time you can offer a person savings without them having to do work, common instinct is to believe that there has to be a catch. FairFly seems to be an exception to this rule and there is really no downside to downloading the app and saving money. I know I’m about to fly a little more knowing my plane tickets will be so much cheaper.