The boss of IAG airline British Airways says it is learning from the approach taken by its Hangar 51 incubator members how to implement new ideas.
Alex Cruz, chairman and chief executive of BA, was speaking to Travolution on Monday at a demo day for the five first incumbents of Hangar 51 which is located at IAG’s UK headquarters.
They have just completed the 12 week period in the incubator having been selected from an initial 450 applications from 36 countries that were whittled down to 26 invited along to pitch to IAG bosses.
The five firms had to face a panel of IAG senior directors on Monday, including Cruz, group chief executive Willie Walsh and head of digital business transformation, Glenn Morgan. IAG will decide in a few weeks how it will continue working with the five firms, and could opt to invest in one or more company.
Cruz said: “The ideas that come through this initiative are part of the picture. But the value of Hangar 51 goes way beyond that. It’s one thing conceiving ideas, which we do every day of every month of every year.
“But it’s about the mentality needed to take those ideas to fruition is where the real value of Hangar 51 comes in. They have achieved incredibly fast times in their analysis and they have really challenged our own teams. It’s just this mindset to be able to look at business issues and problems in a more agile way.
The five firms in Hangar 51
Esplorio is an app that logs every detail of your trip so you don’t have to. Its mission is to help people record, share and book the best experiences of their lives.
The founders said they saw so many opportunities while being in Hangar 51 that they decided to do four projects, not just one. One was to showcase BA crew member and travel blogger Jessica Parr as she toured around London. Another was to use its data insight to provide BA with insight into which members of its loyalty club fly on rival airlines for some trips and why.
Undagrid is able to optimise logistics by connecting physical assets like bags so they can be tracked and processes can be made more efficient. It effectively brings non-digital physical assets like airports into the age of the Internet of Things.
While in Hangar 51 they were able to live test their tracking system in Madrid and Heathrow airports to help IAG understand where the issues are in its business processes that harm customer experience.
Warwick Analytics, a predictive analytics firm has its origins in Warwick University. It’s technology promises to give firms detailed real-time intelligence into what people are really thing about the service or product they are experiencing.
Warwick Analytics said during it’s time in Hangar 51 it showed the accuracy of its predictions far exceeded what would be expected from other techniques and increased rapidly as soon as raw data was fed into the system. This opens up the possibility for IAG to glean immediate actionable insights into its customer issues and maybe develop a triaging system for complaint handling.
Resolver is an online complaint handling and resolution service which verifies customer issue and recommends the best solution upfront without having to resort to confrontational claims management companies.
It spent its time in Hangar 51 developing a system to assess the validity of EU 261 delayed boarding claims. The system can predict whether a claim will result in compensation and so advise IAG on the best way it should be dealt with from the start. Warwick Analytics claimed an 86% accuracy rate on its predictions but said it would expect to be able to push that up to 96%.
Vchain utilises the latest blockchain technology that is best known for sitting behind virtual currency Bitcoin for the sharing of data accurately and securely. The technology means the data is never located in one place and therefore it is said to be unhackable.
Its time in Hangar 51 was spent applying this to Advanced Passenger Information processes and customer identity and passport validation. New EU data protection rules due to cone into force next year mean firms in breach face fines of up to €20 million or 4% of global turnover, so Vchain was seen as offering the potential to both speed up processes and also make them more secure.
“Innovation is great, you can come up with an idea but then you have to take it to market really fast, test it really fast and come up with a conclusion and then move on. For BA that has tremendous value.”
Cruz added that BA is learning to operate in this way giving greater independence to some of its internal teams because he said change and innovation is coming to the sector whether firms are ready or not.
“Innovation is being force fed into our industry,” he said. “Either those within acknowledge that or those outside the industry are going to take it away. There are so many different start-ups and online companies taking little stabs at travel experience and travel planning and those companies within the industry must partner with them, or even invest, or risk losing entirely access to that customer experience.”
Walsh told guests at the demo day: “What’s been really interesting to watch has been the progress from pitch day to demo day today. It’s turned into something truly tangible that we feel can make a difference to our business. It’s been a fantastic process.
“We are committed to putting our money where our mouth is. We believe there is fantastic work going on out there by some very bright people and we want to participate in that.
“We gave our team the freedom to go out there. We encourage them to break the rules we would normally apply to ourselves to find the project that we feel can transform our business. We have put money behind those projects to help deliver a better travel experience.
“This is the start of an exciting process that will not just change our business but that will be hugely beneficial to our customers.”