STARTUP STAGE: Aeropaye uses blockchain to automate airline refunds – PhocusWire

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Aeropaye

Aeropaye automates the processing of refunds for
delayed or cancelled flights, using distributed ledge technology, smart
contracts and NDC.

Founded in 2019, the company is based in
Nigeria and will soon test its prototype with a TMC in South Africa and
Ethiopia.

What is your 30-second pitch to
investors?

Aeropaye is developing an
autonomous smart flight refund engine for airlines, travel agents, travel
management companies and passengers on delayed or cancelled flights,
integrating distributed ledger technology, smart contract components and the
IATA direct connect New Distribution Capability (NDC) protocol. We compete in
the growing airline ticketing industry valued at $776.9 billion.

We are similar
to the IATA coin and Travacoin, but Aeropaye in-built a hybrid escrow-integrated
system that gives autonomous refund on delayed or cancelled flights and a “buy
now pay later” for flight tickets. Currently we are about to test our prototype
with the largest travel management company in South Africa and Ethiopia.

LinkedIn

https://bit.ly/2Y1y1rk

Describe both the business and
technology aspects of your startup.

Aeropaye uses blockchain distributed
ledger technology (DLT) and NDC components to streamline airlines’ ticketing
processes. A billing and settlement plan (BSP) link is the central point
through which funds flow between travel agents and airlines, meaning travel
agents do not have a direct relationship with the airlines and all transactions
are consolidated through the BSP. Agents make payments to the BSP, which then
makes one consolidated payment to each airline, covering sales made by all
agents in a particular country or region. The Aeropaye infrastructure is
aligned with the legacy system through the IATA direct protocol new
distribution capability.

Give us your SWOT (Strengths, Weaknesses, Opportunities,
Threats) analysis of the company.

  • Strengths
    • Secured, fast and low-cost accounting, billing and
      settlement plan in co-delivering travel products and services.
    • No need for intermediaries
    • Automation by means of
      smart contract 
    • Accessible worldwide for travel
      agents, TMCs and passengers
    • Highly secured and transparent
  • Weaknesses
    • At early stage, we need to
      rely on external (Oracle’s) blockchain second layer protocol
  • Opportunities
    • Availability of a huge market and
      heterogeneous data, pushed in the blockchain by different aviation actors.
  • Threats
    • Micro-regulations from the
      government to consider blockchain and smart contract dangerous.

What are the travel pain points
you are trying to alleviate from both the customer and the industry perspective?

Airline tickets are stuck in a
technological bottleneck. Coordinating purchases, transfers, settlements on
delayed and cancelled flights and payments across hundreds of airlines,
agencies, and countries is expensive and inefficient under the current system.

The Aeropaye DLT component is an
amazing technology that allows for easy, near instant, trustless collaboration
between different parties with a common goal. These difficulties of the travel
industry is the perfect environment to apply it in. Aeropaye travel tickets
smart tokens have immediate benefits like fast transactions, instant
settlements, and more efficient collaboration between all the parties.

So you’ve got the product, now how
will you get lots of customers?

Aeropaye customers are online
travel agencies, travel management companies and airlines. We provide them
automated, integrated, self-executing cancel and refund workflow processes,
integrated with the ticketing platform. No more unhappy customers chasing the
money and no manual work spent trying to keep-up, only instant, automated,
elegant transfers of digital assets based on easy to understand smart contract
rules. We enable all the parties we’ve partnered with to get ahead of their
competition.

Tell us what process you’ve gone through to establish a
genuine need for your company and the size of the addressable market.

The market size measured by
revenue of the global airline ticketing industry is $776.9 Billion in 2021. The
market size of the global airlines industry is expected to increase 13.2% in
2021. The Africa IATA open air arrangement will boost traffic, drives economies
and create job. The survey suggests that if 12 African countries opened their
markets and increased connectivity an extra 155,000 jobs and $1.3 billion in
annual GDP would be created in those countries.

How and when will you make money?

  • Ticket fare transaction charge
  • Escrow flight cancellations redeem
    request charge
  • The Aeropaye “buy now pay
    later” on flight ticket installments. If users default payment or change their
    travel plans, everything they’ve paid (minus the initial deposits) will be
    credited to their Aeropaye account, with one calendar year to use the money on
    a different flight.

What are the backgrounds and
previous achievements of the founding team?

Mustapha Tijjani, founder and CEO/product
development, is a hands-on entrepreneur who has spent his entire career
immersed in technology and its revolutionary effects. Mustapha’s ambition to
adapt and advance as an early adopter of incipient technology has led him to
blockchain technology and artificial intelligence. While applying his
experience on digital currency, he founded Agriiuncoin, a multi-asset pegged digital
currency on the Agriiun Exchange, and Aeropaye, autonomous smart flight refund engine
on cancelled flights for aviation. He is an alumni of Y Combinator. 

Mannir Dikko Bala, co-founder and
head of operations, is a hands-on entrepreneur who founded a decentralized gold
exchange for trading gold in fractions on blockchain technology, cutting out
intermediaries across the gold supply chain. Mannir has years of experience in
the hotel and hospitality sector and agro/comtech. 

Johnny Thorsen, co-founding
partner, is a global travel technology evangelist in the corporate travel and
mobile world with proven ability to start new business or develop new services
within large companies as well negotiating and closing “impossible
deals” between global enterprise buyers, startup suppliers and major
established industry players. His background is in software services ranging
from actual code writing to marketing of new products and services and creation
of completely new business models with associated go-to-market strategies and
significant disruptive innovation resulting in new customer value creation. 

How have you addressed diversity
and inclusion within the business so far?

Although practicing inclusion and
bolstering diversity are good ethical business practices, the aviation industry
also stands to benefit from boosting its diversity with a combination of DLT
and NDC.

What’s been the most difficult
part of founding the business so far?

DLT/NDC is not just a set of
technical challenges, but also requires a total industry mindset shift. It requires airlines to
take back control of their relationship with customers by evolving their role
as travel retailers. This means redefining their relationship with customers
and how they innovate and sell their own products using technology to adapt to
the new fast-moving age of commerce where the customer and not the product is
at the center. Making this system work, however, requires a new level of technical
sophistication, involving more direct access to the end customers through
direct third-party partnerships, while at the same time creating more agility. 

Generally, travel startups face a
fairly tough time making an impact – so why are you going to be one of lucky
ones?

Aeropaye autonomous smart flight
refund engine is not just for ticket fare payment, all the billing and
settlement and accounting reconciliation is automated on smart contract.
Aeropaye mitigates the time between payment being sent by customers and received
by airlines. And it enables customers to call off their flight booking and
receive instant refunds up to a certain time before a flight. 

A year from now, what state do you think your startup will be
in?

We aim to have all the major airlines
in sub-Saharan Africa adopt the Aeropaye direct connect protocol.

What is your end-game? (Going
public, acquisition, growing and staying private, etc.)

Aeropaye is an obsession for the
team. At this stage we want to grow and later go public.

PhocusWire’s Startup Stage

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