We provide a truly new distribution solution based on a collaborative, shared and decentralized model in a GDSless environment for travel agencies & airlines.
We have successfully test blockchain architecture and developed some smart contracts and web services.
We are looking to make additional developments in order to do a real pilot with some airlines (LoI signature under discussion).
Travel, Transportation & Tourism industry.
Problem or Opportunity
With biztribution we enable airlines to recover governance over their content and customers. Based on Blockchain we reinvent air distribution by avoiding overheads and intermediary costs and allowing more efficient operations. Our aim is to provide Blockchain-based current functionalities landscape in a collaborative, neutral, airlines ecosystem shared approach.
biztribution proposes a new fully decentralized distribution model for the air travel industry, that leverages technology to create a customer-centric scenario. Our solution revolutionize travel & tourism distribution through a paradigm shift: as opposed to current centralized GDS model, in which information is clustered and managed by a few in a monopolistic, costly and unfair market, we enable a shared and collaborative model in which all actors can provide and access content across a distributed blockchain network through a push model that simplifies and minimizes information flows, resulting in benefits that percolate to the whole industry.
Solution (product or service)
With the implementation of biztribution we make a new automated fully decentralized distribution model possible. By building a blockchain solution where air travel & tourism ecosystem can load their content directly on a multi-distributed ledger shared among airlines, flexibility and de-commoditization are achieved (deploy own view of contents and customized offers; codeshares and interlines between co-petitors) in a cost-effective (no overheads or intermediaries), reliable (fault & outages tolerant) and secure way (full privacy between parties, traceability & transparency are ensured) in a GDSless, neutral environment.
In terms of product availability and application, we identified our main competitors:
Well established GDSs players: Amadeus(EU/Spain), Sabre(US), TravelPort(US) and TravelSky(China). They can benefit from biztribution, i.e. competitors into partners, using our inventories as an extra feature within their GDS business line (they provide other services: IT, consultancy...), ensuring a smooth transition between the business models.
Under development Blockchain-powered marketplaces: such as Winding Tree (CH), Avinoc (Hong Kong), TravelBlock (Canada) or Further (Turkey). None of them focus on distribution itself, they concentrate on a B2C business model based on tokenization of airline services, representing a different market scope. Moreover, their proposed public blockchain approach is incompatible with the need to know/to have principle (private vs public information), and they don’t have the governance model that industry and regulation requires. Hence, their business model goes against Airlines business performance. They can benefit from biztribution, as they could be integrated as another payment method while we could help them providing governance and industry specifications (i.e. new distribution capabilities NDC).
Advantages or differentiators
Besides the technical advantages, we have three main commercial advantages. First, although more competitors will follow to exploit blockchain technology for the travel sector, our target market segment is protected due to extensive R&D knowledge required (perishable product, management of information & money flows, data security and privacy concerns – need to know principle), representing a high entrance barrier to new players. We are convinced that the technological maturity achieved so far will guarantee us the first-mover advantage. Secondly, we propose a new community model based on IATA’s NDC and the collaboration of all actors of the value chain, able to create new synergies and a partners’ community. Finally, biztribution is a technology company born to solve the problems that we identified during our extensive working experience in the travel agency and air transportation sector. The above entails a great knowledge advantage over competing developers, since enables us to fully understand the day-to-day challenges of our customers and all value chain participants.
We consider an average fee of 6€ per GDS booking (currently is about 8€) and our average price of 1,2€ per booking performed through biztribution. The resulting forecasted savings for the airlines in the 2021-2024 period are enclosed in Table 2.
On average, the distribution costs through biztribution are at least 80% cheaper than the GDS-derived costs. According to ETTSA report on Airline Distribution costs, the channels costs correspond to over 50% of the total distribution costs of an airline (as they also have direct costs, etc). Therefore, biztribution can reduce by at least 40% the total distribution costs for carriers.
We offer biztribution as a BaaS solution – Blockchain as a Service: complete solution based on blockchain technology – platform + services; following a combined revenue model which will include a one-time implementation cost followed by a competitive business model that on average represents a much lower transaction fee for the airline. It is designed to meet the needs of our customers (large cost reduction) while ensuring an scalability through recurring revenue streams over the years. It has the following phases:
• Free-Trial: New customers will enjoy 4 months of free usage trial, charging only a one-time implementation fee. Our aim is to give a first indication on the savings that can be expected and let customers and stakeholders experience the advantages of our solution, as well as create customer trust and loyalty.
• Go-live: After the trial period, we will offer our BaaS following a business model that represents an average price of 1,2€ per boarded passenger, i.e. >80% cheaper than current GDSs fees, and a one-time implementation fee for additional work for biztribution set-up. We will offer additional customizations/services as an incentive to engage with biztribution, providing them with added value and a competitive advantage over other companies.
The implementation fees will vary depending on customer size (major carriers vs. long-tail companies) and on whether is a direct sale or through our partners (IATA, IT providers...). Additionally, customized offers to our clients can be negotiated on a case base, providing a flexible model profitable for our customers and us.
Money will be spent on
Make additional developments & make a pilot with 3 or more airlines.
Offer for investor
EBITDA: 28,62M€ on 2024 with a Service Addressable Market less than 2%.
Besides competitors, already discussed above, the main commercial barriers faced by biztribution are:
• Reluctance to adopt pioneering technology – Conservative and slow ecosystem: Airlines have to be convinced that biztribution has real added value for them in order to engage early-adopters. Having a demo environment ready for validation projects during Phase II will serve to illustrate our value propositions. Particular emphasis will be made on the economical impact, well above the initial effort required to implement our technology. Successful partnerships with IATA will facilitate our entrance and consolidate our presence with medium-sized companies and major carriers.
• Talent – Cutting-edge technology with few (and expensive) experts: Blockchain technology is still relatively new and the number of experts worldwide is limited. Presenting biztribution in specialized events will allow us to target highly skilled profiles (blockchain experts, developers) interested in joining our company.