Blockchain-based payments startup Travacoin is seeking $1.7 million via traditional funding methods to reimburse airline customers in the event of travel disruption, reported Irish Times on November 8, 2018.
Airline Passengers to Receive Crypto
Flight delays and cancellations are an incredibly common occurrence. As per data from FlightStats, over 470,000 flights were delayed, and 27,000 were canceled in October 2018.
The figures equate to millions of customers facing unwanted changes in travel itineraries, with adequate services to treat such problems being nearly non-existent.
Irish startup Travacoin looks to resolve such issues using blockchain technology and cryptocurrencies. The firm leverages the former to record customer data, flight times, and travel costs and pays out the equivalent of the ticket cost via a native digital token in case of delays and cancellations.
Travacoin also intends to develop a mobile application for real-time information about flights and appropriate compensation, while hoping to partner with hotels, airport shops, and retailers to accept the tokens as payment in exchange of their services.
The startup is a recipient of Enterprise Ireland, a government-backed initiative that seed funds small businesses based in the country. Reportedly, Travacoin is in talks with airports, “big-name” airlines, and foreign-exchange providers to create a Minimum Viable Product (MVP) for its business before any tokens are offered.
Travacoin CEO Brian Whelan expects criticism from customers and the willingness of airlines to offer an obscure digital token, especially as cryptocurrency is viewed with cynicism from the general masses and higher management. He stated:
“The IT guys working at airlines love our idea and pretty much all airlines are investing in blockchain at some level right now but at the executive level, there is little knowledge of it and a high degree of cynicism. What we keep telling them, however, is as far as we are concerned it is a case of ‘bitcoin bad, blockchain good.”
Long (Runway) Ahead
Whelan believes that airlines have been “hugely resistant” to provide adequate compensation in case of customer grievances. But, with the rise of social media, brand image is severely affected if a large group happens to bad mouth a company after a case of poor service.
Citing research from the European Customer Center, he notes awareness of customer rights has grown from “less than [one]percent” in 2008 to ten percent in 2018, which has resulted in massive payouts for customers but losses in the airlines’ balance sheets.
Whelan estimates a six-month period for application development if the minimum funds are raised. However, he notes the business would “take off” only if a large number of airlines adopt the idea and customers agree to accept compensation in Travacoin tokens.