Winter may be behind us but that doesn’t mean flight issues are going away. In the last thirty days, more than 9,000 domestic flights have been canceled and another 139,000 delayed. Travelers caught up in it know all too well the pain it can cause.
Cambridge, Mass.-based startup Freebird can’t prevent flights from being canceled, but it is aiming to alleviate the headache of finding a new one. Launched this past November, Freebird is an app-based service that tells travelers when their flight is disrupted, offers them alternative flights in less than 30 seconds and — perhaps most importantly — pays for their new ticket. The service, which differs from travel insurance, costs $19 for a one-way trip or $34 for round-trip and is only available for domestic travel.
It’s a risky undertaking for Freebird, but one the company says is made safer because of big data. Like an insurance company that bets nothing will happen more of the time, Freebird relies on algorithms and experienced travel data scientists to assess the risk it faces from flight delays and cancellations. In order to maintain its business, Freebird has to understand how airlines price tickets that are purchased on the same day. It also has to gauge cancellation rates across different airlines and routes.
“We’re looking at weather data, flight pricing and availability data to be able to compute prices correctly so people traveling can get where they need to go but we can still have a business,” says Ethan Bernstein, Freebird’s 31-year-old co-founder and former Expedia executive.
Unlike travel insurance, the service doesn’t place restrictions on the types of flight disruptions covered or reimburse travelers for their original flights. The idea, Bernstein says, is to solve a pain point in real time. Travelers can enroll in Freebird up until two days before their flight. When a flight is canceled or delayed for more than four hours due to weather, maintenance problems or any other issue, they get a text alerting them to the disruption followed shortly after by a link with a choice of alternative flights. The traveler gets to pick the best time for them irrespective of which airline the flight is on or how much it costs.
Freebird isn’t alone in coming up with new ways to help travelers get from point A to point B. There are a number of other data-driven mobile apps on the market that do everything track flights in real time to send out status alerts when disruptions happen. There’s even one that helps consumers get compensation for any delayed or cancelled flights that have occurred in the last three years.
What backers of Freebird says sets it apart is the experience and knowledge Bernstein brings to the company after working at Expedia for four years. “One of the things we love to back is depth,” says Jeff Fagnan, founding partner of Accomplice, the early stage technology venture firm that participated in Freebird’s $3.5 million round of funding in November 2015. “Bernstein is living in the industry and working in the industry for a long time.”
Fagnan admits he didn’t intend to invest in the company, figuring it was just another play on travel insurance. But he was quickly impressed with Bernstein’s “knowledge and passion” and a lack of what he saw as clear competition. “We looked around and saw some other examples of different types of travel insurance. But it was more taking an old broken business model and redoing it in a digital format,” he says.
Freebird hasn’t had to spend money on marketing to date, growing in its short time thanks to word-of-mouth referrals and repeat business. It’s piquing the interest from airlines, the travel industry as well as credit cards companies and insurance providers.
“Our aspiration is to be a check-the-box everywhere airline tickets are sold,” Bernstein says. “Whether the ticket is sold by an online agent, corporate travel agent, airline or website we want customers to be able to say yes to have Freebird part of the purchase.”
Currently Freebird is going after the business travel market but says anyone who is time-sensitive would likely be willing to pay the extra money to know they will make it to their destination without a headache and added expense.
Still Julie Ask, an analyst at Forrester Research isn’t convinced everyone will want to check off Freebird as an added service. She says frequent business travelers can get a similar service from their airline while consumers may not think the service is necessary.
“The challenge is the vast majority of the revenue in the airline industry comes from frequent flyers and if my flight gets canceled United Airlines takes care of me,” she says. “If its targeting leisure travelers who might travel two or three times a year the cost may be too high for them.”