JetBlue Airways Corp. is investing in startups to elevate its travel offerings with machine learning and blockchain for transactions, Eash Sundaram, EVP and chief digital and technology officer of JetBlue, told The Wall Street Journal. The airline is turning to startups for innovative technology applications legacy companies aren't producing, according to the WSJ's reporting.
The airline is focused on "being a part of the Silicon Valley innovation ecosystem," said Sundaram. JetBlue Technology Ventures, which invests in and incubates early stage companies, has invested in 18 startups since 2016 with a focus on ones that can deliver business value in 18 months or 5 to 10 years, according to the report. The company has sifted through 3,000 startups in that time.
Sundaram uses "themes" to decide what technologies to invest in for its bottom line, which includes bettering customer experience, improving safety and cutting down on maintenance time. JetBlue Technology Ventures reviewed 300 blockchain startups and one, Filament, gained its attention. Filament will allow JetBlue to see "machine-to-machine communication" to "validate and pay" for services on aircrafts in real-time, once it's mature, according to the report.
In the last year, airlines have faced breaches from malware and computer glitches that caused scheduling conflicts for pilots. But these mishaps cost airlines more than money; it costs them their reputation.
Airlines invest less than 3% of revenue on IT compared to other industries that spend about 5% or more. This is hardly ideal for an industry that runs complex operations constructed largely of hundreds or thousands software applications.
It's common for airlines to also have their software written in many different languages, including outdated ones that face retiring developers.
JetBlue is leveraging new technology in part because it identifies itself as a startup, after the company "disrupted the commercial aviation space in 1999," according to JetBlue Technology Ventures. It is largely embracing blockchain as the next transformational technology of the travel industry.
Still, any company, no matter its confidence in the latest technology, needs a precise vision and purpose before investing in any early stage technology.