Travel & Tourism

British Airways Parent IAG Grew Its Travel Startup Accelerator Despite Crisis

IAG (International Airlines Group) sped up its mentorship of startups as the pandemic spurred the organization to reimagine its operations and how it might use emerging technologies.

In 2020, IAG’s Hangar 51 accelerated 22 startups — its largest cohort since the parent company of British Airways, Iberia, Aer Lingus, and Vueling debuted its startup mentorship program in late 2016. The program nurtured startups last year working on concepts such as minimizing the impact aviation has on the environment, inventing “digital queues” for social distancing, and finding more cost-efficient ways to handle luggage processing.

Accelerators, which provide early-stage startups with guidance and business introductions, used to be all about shared physical space. A key selling point for both entrepreneurs and corporate executives was the chance to rub shoulders with each other during multi-month sprints. Founders learned what executives are willing to buy from vendors, while executives encountered the energy of startup founders and discovered new technological approaches to problems.

Once the pandemic made co-working nearly impossible, a handful of travel sector startup accelerators and incubators either collapsed or went on hiatus. But accelerators that pursued remote mentorship and workshops, such as IAG’s Hangar 51 and Plug and Play Tech Center’s travel-themed cohort, say that they’ve seen their programs thrive.

Other accelerators enjoyed a similar positive dynamic. Two of the most well-known, Sequoia’s Surge and Y Combinator, accepted larger than usual numbers of startups as mentees in the past year. Some entrepreneurs became more likely to participate when they didn’t have to move away from their customers or families for months.

“We had a startup from Australia participate in our virtualized format that would otherwise have had a hard time spending three months in Europe in person,” said Dupsy Abiola, head of global innovation at IAG.

Airboard, the Australian startup, offers digital queuing, and the accelerator helped them refine their product and learn some of the nuances of airline operations as well as make introductions to executives.

Some IAG employees became more likely to participate in the accelerator’s activities because the virtual format reduced barriers to entry.

“We had more employees from all over the business taking part in this most recent cohort,” Abiola said. “We had individuals from GBS, our global business services unit, and IAG’s tech teams, and our loyalty programs joining in, which rarely happened before.”

The early claim is that accelerators thrived despite the remote setup.

“Something that has always distinguished Hangar 51 from most corporate accelerators is that we have been very selective,” Abiola said. “You’re more likely to get into a university like Harvard than our accelerator program, given the competitiveness of the application process.”

Before joining IAG, Abiola ran a startup, Intern Avenue, which helped companies recruit talent. At IAG, she used her experiences as a founder and barrister to bridge mindsets between startups and executives.

Before calling for applications, Abiola has her team do the advance work of making sure the year’s program will be worthwhile to company executives and leaders. Hangar 51 talks with decision-makers across the company to learn their priorities.

“The goal is to get heavy opt-in from important stakeholders who have the budget to press the button and are genuinely interested in particular problems,” Abiola said. “We only want to invite in startups that are working on what’s genuinely relevant to IAG.”

The accelerator has helped to support an array of projects. In 2020, Hangar 51 worked with startups that included 3D SeatMap, which lets passengers visualize the seat they’re about to select when booking it online, and BagsID, a Dutch luggage handling and identification service.

Some alumni of previous classes of the accelerator have received additional rounds of funding and signed significant commercial contracts, including Sherpa, a business travel startup, and Volantio, a startup whose services include helping airlines rebook flexible passengers on emptier flights.

Yet sustainability has become an increasingly important interest of IAG’s. The only member of the 2020 cohort at Hangar 51 to get investment from IAG’s multimillion-dollar corporate venture capital fund so far has been ZeroAvia. The company, founded in 2017, has the goal of building a 19-seat plane propelled by hydrogen-electric power.

ZeroAvia has became the first breakout star of the latest cohort. Since December, the startup has raised about $64 million in venture capital and grant money.

The Hangar 51 team also works like an internal consultancy that helps IAG’s brands with specific projects. For example, its team members helped British Airways update its mobile app at the start of the pandemic to help address passenger needs. They also helped the airline launch a digital process at one of its lounges at London Heathrow called Your Menu. The service let passengers order food and drinks from an online menu using a QR code, with lounge staff then bringing the orders to guests.

Hangar 51’s team also works with IAG’s test labs on trialing fresh uses of emerging tech, such as drones.

“We’re on a mission to demonstrate the art of the possible,” Abiola said.

For more context on the virtualization trend, Skift Pro subscribers can read the Future of Work Briefing.

Photo Credit: An airplane in an aircraft hangar. IAG, International Airlines Group, sped up its sartup accelerator in 2020. Hangar 51 accelerated 22 startups — its largest cohort yet. IAG

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