The Czech Republic’s Kiwi.com is going through some changes. The online travel agency (OTA) rebranded earlier this year and changed its name from Skypicker. This is part of the company’s wider ambition to secure its own identity.
The Brno-based company is on the verge of a push to increase its brand awareness after years of bubbling under the surface while still generating a profit. CEO Oliver Dlouhý believes the new Kiwi.com moniker is a catchier name and differentiates itself from the glut of other travel companies with clichés like sky or fly in their name.
For a company that was founded more than four years ago, it seems like a strange move to suddenly change the name and identity. It could lead to confusion among consumers and a drop in traffic but Dlouhý said this is not the case as most of its traffic – about 80% – comes from its meta search partners like Skyscanner and Kayak. But that’s all set to change.
Under its new banner, Kiwi will be launching its own marketing campaigns to push its new direct brand. Rebranding first was important.
“After we spent this [marketing] money it would probably be very risky to change the brand name so it was the best timing for us.”
Kiwi is still a smaller player in the OTA field against the likes of Spain’s eDreams so differentiating itself will be its biggest challenge.
It accomplishes this on the tech side of things thanks to its own algorithms, Dlouhý explained. The OTA will sell multiple flights in one transaction where there are airlines that do not cooperate with each other – “We call it virtual interlining.”
Kiwi wants to create its own routes for trips that would involve multiple bookings and little or no protections if one flight is delayed or cancelled. “Officially they do not cooperate with each other but we can still sell you such an itinerary.”
“We cover these itineraries with the so-called Kiwi.com guarantee, which means in case the first flight gets delayed and you miss your connecting flight with the other company, we would book you another flight to your final destination free of charge for you,” said the CEO. “We cover all the possible problems that can arise for you from such combinations.”
Kiwi is building more protections for travellers into its products, especially when it comes to flight disruptions and missing connections where it can get travellers onto a new connecting flight as soon as possible. Fight delays and cancellations wreak havoc on travellers. According to data provided by Airhelp, in the UK alone in July 2015, 21.64% of all flights were delayed or cancelled.
None of the company’s competitors offer services like this to this extent, he claimed. It’s an important skill for OTAs to develop as the business landscape has become more challenging.
Most notoriously, eDreams and Google sparred with Ryanair over what the latter calls “misleading ads” from eDreams that Google are allowing. In Ryanair’s view, eDreams is using these misleading tactics to pull in sales of Ryanair’s flights rather than passengers going directly to the airline’s site.
“We are not competing directly with Ryanair on the same route but we are just using their flights to create new routes.”
Dlouhý said he doesn’t expect Kiwi will have any similar kind of tiff with Michael O’Leary’s airline. “That’s the difference and the reason why we have much better relationships with the airlines focused on direct sales through their websites. We are selling the seats that they would not be able to sell otherwise.”
Creating its own routes is Kiwi’s big bet. “We are not trying to compete much on direct flights, which all the OTAs have because we’ll only be undercutting the margin which is not something we are interested in. “We are trying to offer something new to the market.”
Another way of improving flight connections and crafting new routes for your holiday or business trip, is ground transportation between airports. There are dozens of cities around the world with more than one airport and Kiwi is trying to leverage these airports for creating new routes for customers. The company is currently trialling bus and taxi transfers between London’s airports. For example, one airline may fly into Gatwick but the customer needs to be in Heathrow to fly to the final destination.
The CEO added added that Kiwi is in early stage talks with transport companies to provide this service in the future. At the moment it’s working with Mozio for the initial ground transport tests.
Kiwi.com currently employs 735 people as of September 2016. About 95% of this workforce is in the Czech Republic with the rest stationed at its office in Kiev. Right now, hiring is the main bottleneck in its growth as it wrangles to keep up with customer demand and ever-changing data.
The business of plane tickets is constantly changing and staying on top of that is the biggest challenge. The cost of a flight to Berlin may be a bargain one day but hang around too long and it will shoot up.
“We have an algorithm that can predict when the flight changed and we then refresh the price of the flight after we are pretty sure that the price had changed. All the refresh transactions are extremely expensive so we cannot refresh every flight every second or something like that so we really need to find out which flight has changed its price and refresh.”
Kiwi monetises through a mark-up of 10-15% on the tickets it sells. The company is profitable, said Dlouhý, and despite the talent obstacles, it’s not looking for funding. Now its focus is on marketing, content, and opening up more lines of communication with airlines.
“We have the business development team which is focused on communication with the airlines. Definitely we want to get some special fares for our customers. Currently our main growth model is the content.”