Ep 6: How flight subscriptions are turning unsold seats into recurring revenue - with Garth Lund and Iñaki Uriz

For almost a decade, Caravelo has been at the forefront of scaling the flight subscription model with airlines worldwide. 

In this episode, Iñaki Uriz, CEO and Co-founder of Caravelo, joins Garth Lund to break down why the subscription model is increasingly popular with both airlines and customers alike. 

(01:06) Intro to Caravelo

(07:10) Pivoting during Covid to focus on flight subscriptions

(12:24) The economics of flight subscriptions and distressed inventory

(21:01) Why LCCs have embraced the subscription model faster than full-service carriers

(24:26) Why certain geographies have seen faster adoption of flight subscriptions

(27:37) Working with airlines and customers to navigate the Iran conflict and high fuel prices

Published by The Engine Cowl 

Transcript

SPEAKER_00 0:00

Hello, welcome to the Airline Tech Podcast. I'm Garth Lund. In today's episode, I'll be speaking with Inaaki Urith, co-founder and CEO of Caravello. I think Caravello is best known for their flight subscriptions, but what is almost as interesting as the product itself is the story of how Caravello and Inaaki and the team during COVID decided to cut loose their other products and their other business lines and really double down on the flight subscriptions. Which was a bold move, but I think what we've seen in recent years has vindicated that decision. An increasing number of airlines are adopting flight subscription models, and as we'll hear from Inaaki, even though a subscription and a fixed price sounds like the antithesis of traditional revenue management, actually the data and the track record increasingly show that there is a substantial revenue uplift to be had. So maybe to just get straight into things, um, can you give us a quick introduction to Caravello?

SPEAKER_01 1:06

We are a Barcelona-based uh travel tech SaaS business. That's who we are, right? And at least to my knowledge, I think we are the only company in the world that is really purpose-built for uh subscriptions in in aviation in particular, but in travel more broadly. Um we like to call ourselves the travel subscription company, so I guess that's that's who we are.

SPEAKER_00 1:34

Okay. And so when we think about travel uh or flight subscriptions, what are the key pain points that you've been looking to solve for airlines?

SPEAKER_01 1:43

Well, airlines uh live in very challenging environments, right? Um, but I think there are three key things that we uh address, three key problems that we address. One being um demand stimulation. Airlines are always trying to generate more travel demand, and we surely help with that when somebody subscribes, of course, has more demand than when they don't subscribe to anything for this matter, right? The second thing um uh has to do with, let's say, volatility. Airlines suffer a lot of like seasonality, uh peaks and valleys, uh performing flights and their performing flights, and we contribute to flatten that out and to run a more predictive and recurring business, which is of course very, very useful for them, right? And I would say thirdly, we contribute to the, let's say, if not loyalty to the engagement with their passengers, right? So we try to move them away from the transactional model where you don't know or you don't establish any relationship with your customer, you just transact into a more relational model where they can have an ongoing relationship, an engagement, and to some extent a loyalty. So those are the three things um we bring to the table, I think.

SPEAKER_00 3:08

Okay. And so uh besides the travel subscriptions, um, you also offer another two products, I believe, the last minute pass and the club subscription. Can you also tell us a bit about them?

SPEAKER_01 3:20

They are pretty different in in nature, right? Um let me maybe double-click a bit more in our two core products, which is the uh flight subscription and the last minute pass, right? So, what is a flight subscription? It's fairly simple to explain. It's very much like when you subscribe to something else, you uh commit yourself to pay a recurring fee every single billing period, can be every month, every year, every quarter, doesn't matter, right? In exchange of that, you get a given service. So you get either unlimited movies, music, or whatever it is, right? In this case, of course, you get some flights. So that's flight subscription. In exchange of a recurring payment to the airline, you get a recurring amount of flights that you can enjoy. Of course, those have restrictions in the sense of maybe you can only access part of the airline network. Maybe you need to make your bookings some days before departure, or you know, there are some limitations, but there's a clear deal in between the airline and the consumer for a recurring use of their service. That's that's the essence of it. Okay. Now, the other, the last-minute pass is a bit different. Uh, here, passengers also engage long-term with the airline, but the goal here is to give uh passengers that have flexibility and limited access to distressed inventory, right? At some point in time, airlines realize that some of the seats on a given plane will go unsold and they are going to fly empty, right? So, for passengers willing to accept that sometimes they will have seats and sometimes they will not have seats, passengers with that flexibility can give access, unlimited access to that inventory, right? So, one the first one is a bit more thought for people that have a recurring need for travel. And there are many examples, right? Maybe, I don't know, maybe I have friends and family in part of the country and a secondary house in another part of the country. So I know I'm gonna be traveling in between these two destinations throughout the year, and then maybe I can throw one or two more places as well, right? So given that situation, it makes sense for me to just subscribe and get a flat price, right? While the other, the last minute pass is a bit more for people that uh you know they are flexible. Maybe they are remote workers, they are okay going to see a friend or family, for instance, and um going back to their normal working place uh tomorrow, day after, or in two days' time, because they have this flexibility, right? So it's different audiences, different use cases, but one single impact for the airline, which is having more demand, more revenues, more loyalty.

SPEAKER_00 6:15

So, do you have airlines which offer both products um simultaneously?

SPEAKER_01 6:19

Yeah, absolutely. And they they coexist, right? Um we have clients offering actually three products, also the club, which is a bit of a smaller one. Uh we can enter into more detail, but uh, I wanted to focus on the on the two core ones. So they can and they do coexist because they are addressing different audiences and different needs. Um I'm sure that maybe some passengers are purchasing both, but most likely you are going to fit into one category, right? So they can coexist among themselves, and more importantly, they also can coexist and do coexist with the portfolio of products and ecosystem of the airline, right? This does not fight with their loyalty proposition or with their marketing and promotions activities. This is just something that complements and coexists with the existing initiatives.

SPEAKER_00 7:10

Before COVID, a few years ago, as I understand, you offered kind of a broader range of lots of different products. Yep. And then during COVID, you went through this sort of transformation period and really doubled down on the flight subscriptions. Can you tell us a bit about how that um how that happened, how that evolved?

SPEAKER_01 7:27

I think our mission as a company has remained unchanged pre-COVID, during COVID, and post-COVID, right? We always wanted to create products that generate more engagement in between passengers and airlines, and that is mutually beneficial. It's good for passengers, it's good for airlines, delivers value to passengers, delivers value to airlines, mainly revenue to airlines, right? Um, under that premise, we had a number of initiatives before COVID. They were all doing pretty well, and then COVID came and that was pretty challenging, right? So, of course, we had to do what everyone did, which is downsize the company, you know, and weather the storm. And in that situation, we could not simply afford to keep on investing in all those things, and we were forced to choose. In retrospect, I think it was a positive thing that uh pushed us to gain focus. So we took a hard look at our portfolio of solutions, and we we thought which of those things that all make money really has product market fit. Where are we adding the biggest value? What can be more impactful to the industry? And once you looked at the hard data, it was pretty obvious that we needed to double down our bet on subscriptions and you know drop the other initiatives. And that's what we did, and that's how we emerged clearly as a travel subscription company post-COVID.

SPEAKER_00 8:58

And it I mean, it looks like that was the right move, right? The that flight subscriptions have really taken off since then. Absolutely.

SPEAKER_01 9:06

And I think during COVID also kind of like part of the value of these programs uh became very apparent. So for I mean, if you remember, of course, you know, most of airlines stopped flying pretty much. The revenues dropped, I don't know, 95-98%. Right. Now we had a couple of subscription programs in the market, and those programs were growing a lot uh at the time. They were new programs, and they were growing 20, 25% month on month, so really fast growth. And then COVID came and they stopped growing. They went from 25% every month to zero every month, but they did not decrease. You know, those revenues kept coming for the L, right? Of course, we had to do things for that to happen. We had to reach out to subscribers and tell them, listen, don't unsubscribe. We will keep these flights, we'll push them back, we'll do this, we'll do that. You know, there was a bit of a dialogue, but it worked out. People said, okay, COVID will not last forever. I understand what you guys are proposing. Makes total sense. I keep paying, right? So I think that was very eye-opening, and I think that uh yeah, clicked in many airline managers' minds, and they said, hey, maybe we are losing something here. Maybe there are tools for us to weather volatility, which doesn't need to be as extreme as COVID, but airlines are re-exposed to volatility, and this truly minimizes that that effect. So that that's only one value that I think uh became very apparent during COVID and gave us that extra strength to just double bet on it.

SPEAKER_00 10:48

So that's quite an interesting signal, actually, that the end user, the customers wanted to continue their subscriptions through COVID even when they could not fly.

SPEAKER_01 10:57

Yeah. Um but for me the the the key thing here, or the key difference, is that that's the difference that you get when you have a transactional business versus a relational business, right? When you fly 20 million passengers a year, you transact with them, you know, you don't have 20 million customers, you have 20 million PNRs, 20 million segments, 20 million whatever it is, right? But if something goes wrong, uh they just go away, they disappear, and there's no one that you can reach out to, right? Now, when you have subscribers, yes, of course they book and they they are PNRs in the in the end, right? But they are people, they're consumers that you can't talk to. And that's what we did during COVID. It's listen, you have a huge amount of transactions and a small amount of customers. There's nothing you can do right now to gain more transactions, that's just gone, right? But you have these customers and you can talk to them. And you can tell them, listen, I know it's tough times, but let's do this, let's do that. Maybe you succeed, maybe you don't, right? But there's something because there's somebody out there to talk to. So that's part of the value that we bring, the sense of community, connection, and you know, relationship.

SPEAKER_00 12:12

No, that makes a lot of sense. So can you walk us through kind of the math of how the flight subscriptions work? What does a typical subscription cost per month? What's the breakage, the usage, etc.?

SPEAKER_01 12:24

I will start with the last minute pass, which I think is pretty easy to understand in terms of mathematical uh um approach, right? So the last minute pass is fairly simple. You pay a recurring amount every season, it can be every six months, every year, every whatever. And that gives you access, privileged access to unlimited distressed inventory. So one, two, three days before departure, revenue managers will say, I'm going to sell these empty seats, or I'm not going to sell these empty seats, right? Maybe I have 20 empty seats today, the plane takes off tomorrow. And I think, hmm, on a very good day, I can still sell 10. Those are for me. But the other 10, not even on a very good day. Those, I'm afraid, have zero value, right? So those can be booked by these subscribers and they monetize that inventory. So there, the maths are very simple. It's listen, the more passengers you get to use your zero value inventory, the more revenue you make, because you turn a zero revenue seat into some revenue seat, right? So that's very clear. Pretty much the whole thing there is incremental revenue for the airline, right?

SPEAKER_00 13:47

What is the the revenue that you would get from monetizing that distressed inventory? What would be the typical additional payroll to be paid?

SPEAKER_01 13:55

Yeah, I mean, it depends. Uh, some of our customers, and this is public information, that's why I can I can mention that. Um, some of our customers have been presenting that uh more than 2% of their load factor is coming for this kind of product, right? Um, so that's a lot of empty seats being filled, and that's a lot of people paying for that for that access, right? And this is not a substitute in the sense that what they see is really incremental load factor. It's trips that before were not happening, that now are happening, and they're happening just on those seats that we want to happen. On the ones that there is no demand, this thing generates new demand, right? So it can be as impactful as that. Tens of thousands of people purchasing this product, they're flexible enough, they are okay with the rules, and they're happy to fly this way. And what does the customer need to pay to fly in that MTC? Yeah, I mean, pricing depends on the airline, of course, but ballpark figure is around four, five, six hundred dollars a year. That's typically what what it takes, right? Um yeah, so far this is a bit the price point that airlines are going for.

SPEAKER_00 15:11

And so there's no kind of incremental cost for the customer when they fly in that seat.

SPEAKER_01 15:16

I mean, customers, I mean, the fur is included, listen, free of charge, you can book it, but of course, you need to pay airport taxes, and if you want some ancillaries, you you purchase those, right? But the ticket is for free. It's very much like flying with miles to some extent. The fur is included, but you still have to pay airport taxes, and if you want to top up, I don't know, uh fast track and lounge, you still need to pay for those services, right?

SPEAKER_00 15:41

Yeah, that makes sense. Okay.

SPEAKER_01 15:43

So that's the economics of um last-minute pass. Fairly simple. Monetize distressed inventory. Now, the economics of flight subscription, this is not about monetizing the stressed inventory. This is about maximizing customer lifetime value. Okay. So here, uh, what we do is we focus on people that already have some sort of recurring demand for travel. Um, as I said, I don't know, maybe I have this situation I described before, or maybe I'm a student uh studying abroad and I want to go on a monthly basis back home to see my friends and family and whatnot, or maybe there are many reasons why this happens, right? Now, for these people, uh, the situation today is okay, every single time I want to travel, I just go to Skyscanner or Google Flights or whatever. I compare, I choose, I think when it's going to be expensive, when it's not, and I plan around it, and you know that that's how they navigate uh that need they have. Now, what flight subscriptions offer is uh we change the game and we tell them, listen, flat price, right? So we give customers a flat discounted price, something very attractive. But in exchange of that, of course, we ask them commitment. This is not a one-time thing, this is at least one year subscription, and then until you unsubscribe. Now, how does the airline make money with this? Um, there are three main drivers here, one being breakage, in the sense, let's pretend that you are paying on a monthly basis to get one monthly flight. Something simple to discuss, right? First thing, first element is breakage. I will pay every single month, but I will not necessarily fly or use every single flight I'm allocated, right? Um, and maybe breakage rates are around 20, 30 percent, something like that. That's the average. So typical behavior will be I fly in January, I fly in February, I fly in March, and maybe April, I skip April because whatever, right? And that's okay. So that's one thing, because of course in the month of April I pay the airline in exchange of absolutely nothing, right? So that's free money for the airline. We don't want this to be very big because then people will unsubscribe, but that's going to happen. That just happens, okay? That's one driver. A second driver is, of course, uh demand stimulation. As I said, I mean, when you subscribe to something, it doesn't matter what that thing is, you will automatically consume more of that thing. I watch more TV shows after Netflix than before Netflix, right? Uh so guess what? People fly more when they subscribe than when they are not subscribed. Okay. This is also because um there's a user-lose policy in our products. So, in the sense, if the April flight is not being used, it's going to expire and you're going to lose it, right? So people know that and they try to use as much as as much as possible. So we measure those things and we see how people travel more. How much more? It depends on airlines, right? But something like between 20, 30, 40 percent of demand stimulation, that's what we've seen, right? So one in in in four, one in three flights is incremental. Okay, and then finally is the uh market share gain. Uh as I said, in the current situation, I go to skyscanner, I compare, and I choose, right? And maybe I'm a bit more inclined to airline A versus B because I'm a bit more loyal, because you know, of course, there are things at play, but there's a bit of a comparison uh gain going on, right? Now, when I subscribe, um I just don't compare. Why would I mean not book with another airline, but even search another airline if I have already booked, paid at least, right? So then all of a sudden you get 100% of that demand captured for the airline. So the airline will benefit from breakage. Sometimes people pay for nothing. They get more demand, people travel more, and they travel always with them. The combination of these boosts the customer lifetime value. And we see in our programs how when you move a normal passenger into a subscriber, you will get 30 to 50% incremental revenues from that customer.

SPEAKER_00 20:07

Okay, that's a big increase. Um, and do you have a sense of on a system level or network level what is typically the revenue uplift the airline might see?

SPEAKER_01 20:16

It depends a bit on how big the problem is, right? But I think our two core products, last-minute pass and flight subscription, once they reach maturity, it's not difficult for them to be responsible for an uplift of 1% revenues, right? And those revenues are incremental. It's not that I am opening new routes or buying new planes. I mean, it's just operating in a different manner, enhancing your commercial model and extracting more revenue from your ongoing operations. So there's no cost attached to it. Those revenues really are incremental.

SPEAKER_00 20:51

Right. Which on an industry that makes two, three, four percent profit margin on average is a lot.

SPEAKER_01 20:57

It can really be impactful, of course. It is impactful indeed. Yeah.

SPEAKER_00 21:01

So you mentioned there, I think, some of the parallels with um a loyalty program. In particular, I think one that customers who have the flight subscription are more likely to travel, of course, with that airline. And then secondly, that um with the last-minute pass, this is a way to monetize distressed inventory that might otherwise go unsold. And typically, for an airline with a loyalty program, they might make those seats available uh to purchase with miles. If we look at the kind of customer portfolio of Caravello, uh, you do have a mix of network airlines and also low-cost airlines, but it's skewed towards low-cost airlines. Do you think there is something that network airlines are perhaps missing and that the product is more applicable for them than maybe they might think?

SPEAKER_01 21:47

Yeah, I mean, for me, the reason why we have in our portfolio of customers a bit more of the low-cost carriers doesn't has nothing to do with the business opportunity, right? But I think it's more with The dynamics of both types of airlines, right? Typically, legacy sorry, uh low-cost airlines are a bit the challengers in the markets, right? They tend to be more nimble, more agile, faster, and they want to challenge a bit of status quo, right? They're the guys doing the new things. Sometimes, you know, they're the only ones, but very more often than not, they kind of like bring the innovation or the trends to the industry, right? I mean, some years ago, nobody was paying for seat selection or or carry-on luggage. Um, right? That began with low-cost airlines, but I think today is it's pretty difficult to find an airline that is not charging for those things, right? Um, so I think very often they are the innovators, uh, but then the model, if successful, is applied to the entire industry. I think something similar is happening now, right? I don't believe subscriptions are better fit for low-cost carriers. Um, it might actually be a worse fit because if you think about who's using low-cost carriers, it's more like holidays, uh, you know, one-time flyers, uh vacational. It's a bit more like these kind of profiles when legacy airlines have a bit of a bit more of recurring travelers, a bit more travel-intensive people, right? So I think if anything, it makes more sense for the legacy airlines. But of course, they tend to have a bit more of a complex ecosystem. They need to think things through, and it takes a bit more time, it's just natural dynamics. But I think we're gonna be seeing greater adoption in the in the legacy airlines uh soon enough, yes.

SPEAKER_00 23:35

That's true. I do recall a couple of legacy airlines in the past have offered uh maybe not a subscription per se, but the ability to purchase kind of multiples, a series of tickets, let's say. I think British Midland offered this in the past, Swiss even offered this maybe 10 years ago. Um, so uh which does really, I would say, focus on their tendency to have more high-frequency travelers, perhaps, than a low-cost airline. So, okay, that is interesting. And then again, if we also think about the the customers or the airline customers today of Caravello, there are two regions I would say which stand out. One is uh Latin America, and the second is the Middle East. Do you think those regions have grown because there is something specific about those geographies or customer behavior there, or it's simply airlines, you know, see their peers doing something and they want to have a similar product or something else? I think it's a bit of both, right?

SPEAKER_01 24:26

I mean, um the configuration of the market and the nature of the regions uh is important, surely for the early adopters, right? So if you look at, for instance, a couple of markets where we operate, uh like Mexico in Latin America and you know Saudi Arabia in the Middle East, the things they have in common is that both are big domestic markets, right? Um where people use flights a lot, right, for the lack of other reliable means of transportation because of the long distances or whatever a combination of those things, right? There is kind of like an obvious good fit because traveling domestically, you don't need to worry about visas or anything like that. So travel uh seamlessly is is is very possible, right? And also there are so many reasons for people to travel within the country. Friends, family, business, you know, so many reasons. So it makes total sense, and that's that's the low-hanging fruit, in a way, right? If you are a tiny country surrounded by visa-heavy uh countries, it's going to be tricky for you to really have that big population that travels frequently enough, right? So those markets are kind of like obvious starting points. So, yes, region, I think, um, is important in adoption. But the other factor is important as well. Uh, the moment you see people in your market or your adjacent market doing something like this, and then you go and take a look at social media and you hear a bit what they say about it, and you begin to think about the economics behind it, then you begin to feel, hmm, I'm missing something. And surely you are, because when a passenger subscribes to an airline, basically it's saying bye-bye to the rest. That's what happens, right? And there's not an infinite population of people that we subscribe to airlines. It's a big population, but it's not infinite, right? So going first to market has an advantage here. Um, and airlines notice that. So the moment these products begin to come to your region, the necessity, the willingness to follow grows as well. So I think it's a combination. Right region, kind of like uh, let's say followers effect, or you know.

SPEAKER_00 26:43

So so I guess the other markets which have a big domestic segment would be the likes of US, Canada, India, Australia, China, which I guess could be um I think ripe for subscription.

SPEAKER_01 26:57

And I guess you'll see things there soon as well.

SPEAKER_00 26:59

Yeah. Okay, very good. So you touched on earlier kind of the you know, the early challenges of managing COVID and navigating through that. And I think, I mean, obviously Caravello came out well through the the pandemic. We have maybe a less severe but in some ways similar situation for some airlines now with the Iran conflict. Um, and as we've mentioned, um, Caravelo does have customers in the Middle East. Has that had to, or has that forced you or those airlines to make any changes around the subscription product as a result of all the flight cancellations and less travel demand?

SPEAKER_01 27:37

Yes, I mean, of course, um we are impacted by whatever is impacting the industry, right? We are in in the industry. So, yes, of course, we are kind of like approaching this new situation with our partner airlines, uh, the way they are approaching their normal operations, which is maybe now they need to restructure a bit where they fly. They're going to offer less frequency here, uh, changing a bit more demand there, right? And that's going to also be reflected in our products, right? Um, as a consequence. But yeah, we basically work with them hand in hand. We understand their challenges, we understand if updating a bit our programs uh is going to go in the same direction as their other actions uh are going, and we support them in this in this manner. But uh there's nothing that structurally has changed in terms of uh product market fit.

SPEAKER_00 28:29

And for the rest of the world, now that um oil prices have increased, I think that's been filtering through to fair increases. Does that also mean that airlines will need to look at what they're charging for the subscription, maybe make some adjustments on uh the yield they're getting out of it?

SPEAKER_01 28:45

Yeah. So it depends a bit on the products, right? I would say last minute pass to a lesser extent, in the sense, listen, listen, as long as you are going to fly an empty seat, you'll be happy to offer that empty seat to somebody else that is paying you money, right? It's true that there's going to be a little increase in the marginal cost of flying the seat empty versus with an 80 kilo person there, right? But it's going to be marginal. That's not going to move the needle, really, right? So I think that product is pretty indifferent to the oil price to some extent. Now, flight subscriptions are a bit more relevant because there you offer flat price, right? But of course, I mean, uh oil price is going up and down. This is not something new for the for aviation. And of course, there's this thing called uh oil uh fuel surcharge, right? So nothing prevents airlines from saying, listen, this is the flat price, right? But beyond a given uh oil price, there's going to be a little surcharge that you'll need to pay, right? So we are having this kind of conversations. We are not yet implementing any of this, but we are having this kind of conversations. Those are things that can be done. And not necessarily maybe the full surcharge, right? Because yeah, it's true that now you think, oh, these guys are going to get a bit cheaper tickets in an environment where tickets are going up. But also tickets going up means demand is going to shrink. People will fly less, right? But these guys are going to remain very robust in their demand. So it makes sense maybe to increase a little bit the price for them. And I think they will understand the reasons why, and I think that that's a dialogue you can have with your customers, but they also are going to remain your bottom rock of demand. These guys are really going to keep paying you no matter what. So I think it's it's it's an interesting piece to play around with and to kind of like leverage in these times.

SPEAKER_00 30:42

If we look forward, where do you see the biggest opportunities for flight subscriptions in the future?

SPEAKER_01 30:48

Yeah, I mean, I see so many opportunities, right? But if I if I need to narrow down, I think there are three obvious things we're going to see in the short term. One is the adoption of these programs in in Asia as well. It's a big market, and uh these products have been a bit absent uh yet. Now we recently launched uh Tiger Taiwan as one of our customers, so that's already a first in Asia. I think that's an avenue of growth. I think there's much more that we can do there, right? The second, I think, is the thing we already discussed, which is about legacy airlines. Until now, they've been a bit more like, you know, wait and see kind of thing. And they've been seeing, okay, is this really something that makes sense? Is this for me? Maybe similar to what they did for seed selection, baggage and whatnot. Now we see uh an increasing interest in these things. I think that's that's another avenue of growth, obviously. And finally, I think uh until now we've been focusing on the B2C market, but there's a huge opportunity in the B2B market, right? When you think about people that have more trouble needs, that tends to be corporates, right? Now corporates are big segments. You have the big corporation, you have the the small and medium enterprise, you have the uh freelancers, uh, many people, right? But they have different needs than the B2C market, which is the one we've been focusing on uh most. And I think there's a big part of those corporate travelers that are a perfect fit for a subscription program. And I think airlines can really leverage that relationship. I think there's a lot to do there. So I would say Asia, Legacy Airlines, and B2B, those are three very interesting areas.

SPEAKER_00 32:34

Yeah, those all sound like three strong growth avenues. So maybe one final question. If there's one thing you wish airlines knew about Caravello and your products, um, what would that be?

SPEAKER_01 32:45

It's not that you maybe don't know or kind of like uh eliminate some misperceptions, right? I understand this is new. So, you know, airlines don't know really how to react and which bucket to put these initiatives in. But there are a couple of misperceptions, misunderstandings that often airlines make. One being that um this is the new loyalty, and we are here to kill loyalty and to supplement this with something different, right? And that that's just not the case. I mean, loyalty is a huge business, it's a massive business. It's here to stay and it serves a purpose and it's brilliant. We are here in a similar area because we create relationships with customers, we create engagement, we create to some extent loyalty, but we are here to complement whatever is done there, not to eliminate or or anything like that, right? So I think this can be, and we have some examples in the market, we can strengthen their loyalty proposition, we are not uh a threat. So that's typically one misconception. Another one is that um, you know, airlines maybe see this as oh discounts, chip tickets, right? Uh for no reason. And of course, there's an element of you know, hey, save money or value to the consumer, right? I mean, you are purchasing this because it has value to you, that it's a good offer, right? And yes, some of the prices we offer are attractive, but this is not about giving discounts, this is about generating a new relationship where the customer is going to benefit from it, but the airline is going to benefit from it as well. And uh our data shows you very clearly how this is a win-win situation, and airlines, all our customers, every single month we have this monthly business review, we review the numbers and we see how much incremental revenue these programs are bringing in. So that's the proposition we bring in. We are not discounts, we are not loyalty killers, um, we are a new element, a new tool for airlines to leverage.

SPEAKER_00 34:48

I mean, at least from my perspective, I think this is a very compelling product, and um I hope we uh you know see more airlines using it. If anyone's feeling inspired from this conversation today, what's the best way to get in contact with you or get in contact with Caravello?

SPEAKER_01 35:02

Yeah, I mean it's very very simple. You go to our website, we have their contact section, send us an email, we'll respond right away, and then from there we we begin to share with you interesting information to evaluate whether or not this is a good fit for you and how this can be a good fit for you. Because I think the times of is this a good idea or not are pretty much over. In all our conversations these days, is more about okay, how should I do this considering my business model, my market, my is not whether or not I should do it, but which is the good way to do it.

SPEAKER_00 35:42

Makes sense. Okay, well, thanks so much for your time. I think this was a really interesting overview of Caravello, and uh best of luck with everything. Thank you so much.