Interview with Kiwi.com CEO Oliver Dlouhý

Transcript

Rich Maslen:I'd like to invite now Oliver from Kiwi.com onto stage. We've got some interesting things to talk about, and I have a little inkling that he may have something to announce as well. So I'll be very listening and see, because I think we've got something exciting for you. So Oliver, please take a seat.

Oliver Dlouhý:Thank you, Rich. Good afternoon, everybody.

Rich Maslen:So, okay, we've heard Kiwi.com. Do people actually know exactly what Kiwi.com do? Do you know when they were set up? Did you know— do you know that wasn't their original name? Okay, so we're going to start by going back a decade, go back to early 2010s, very different environment for travel. And there were opportunities to do things, there were opportunities to change how the industry was going, but it takes a brave move to sort of identify what actually is something that is a problem that we can solve. So, Oliver, take me back to 2012 when you suddenly decided upon, well, actually, I think I found a solution to a problem that we all have in the industry.

Oliver Dlouhý:Yeah, so let me share a bit of history. So the year was 2012, as you said, and neither myself nor my co-founder had any background in aviation or in the travel industry whatsoever. But what we did have was a passion. A passion for travel and particularly flying, and passion for technology. And the reason we decided to build Kiwi.com, and as you said, originally we were not called Kiwi, but the name was Skypicker, but we have decided to change it. But anyway, the reason we decided to build Kiwi.com was because we were missing a service in the market. We were missing a service that would allow the customer to combine flights of different airlines that did not cooperate together. We were missing a service that would cover such an itinerary with some protection, with connection protection, for example. We were missing a service where the users could manage all of their bookings across all of the airlines in one simple interface, talking to you 24/7 in any language. And I can continue. And as I said, we did not have any industry background, and therefore we had no idea, for example, what GDS was. And we've decided to build it the way we were booking flights ourselves, basically by connecting to airline websites. It's called scraping. Some of you probably are familiar with that term. And back then, as I say, it was 2012. There was no NDC, or it was on the paper only. All the OTAs were using global distribution systems. The low-cost airlines did not have mostly any APIs at all. So actually, the fact that we did not know anything about GDS and the, let's say, the legacy ecosystem turned out to be a big advantage. Because we happened to be the only OTA out there that had both the low-cost content and the full-service carrier content, that was able to combine it into unique new itineraries that no one else could build. And thanks to this, we actually gained a massive popularity. especially in Europe among our customers. So we built the most comprehensive search engine with booking capability of all of the airlines, and the company started growing like crazy.

Rich Maslen:So Oliver, what was the first route that you were able to build this model to deliver a ticket for?

Oliver Dlouhý:Actually, the funny thing is that it's not about the routes because Given you don't have to negotiate with anyone, we just— the minute we added an airline, it connected into the network and the sales skyrocketed from $1 million per year to $10 million to $50 million to $500 million to $1 billion to $2 billion per year. So really it gained massive popularity. But then, you know, at around $2 billion of sales per year, we started Something strange started happening that we did not expect. We started receiving cease and desist letters from the airlines. They started blocking us, you know, and we were like surprised. As I said, we didn't understand what was going on. Why are you doing this to us? We are bringing you free customers. We are bringing you free traffic. We don't want anything from you. You know, if I spoke like a US VP, you know, did you say thank you? Right?

Rich Maslen:I know in the UK particularly, there was a lot of media articles about Ryanair and and, you know, really pushing all this screen scraping and everything, you know. And yeah, okay, you were a disruptor, and existing airlines will always feel challenged when a disruptor brand comes in. But you were really not liked by the airlines. You were seen as the enemy. You were seen as taking profitability from them, even though you were delivering customers ultimately to them. It must have been quite hard when you received all those.

Oliver Dlouhý:Yeah, it was. It was. But at that point, and we always did that, we were building our service for the customers. And the customers loved the service because we had the broadest content. However, then COVID came, and that was the biggest turning point in, uh, in the life of our, of our company. Because when all of the cancellations happened, and, uh, because we did not have direct partnerships with most of the airlines, it was extremely difficult to actually claim the money from the airlines and refund the customers. So actually With all the best intentions, we created a huge chaos for both the airlines and the customers, which resulted in bad reviews on Trustpilot and other websites and lots of negativity against Kiwi.com. And that was the turning point when we realized that actually partnering with the airlines and trying to build win-win relationships and partnerships does not only benefit the airlines, but most importantly, in the long term, benefits the customer and the customer experience.

Rich Maslen:And so the airline that was causing the most issue for you, ultimately you became the first OTA to actually partner with Ryanair afterwards. And now you've added easyJet, and there's other airlines as well. So, you know, it's been a complete U-turn from how you started into being an airline. You know, your website still uses hacking as a word quite a lot. You've moved completely away from that now to be a friend of airlines. You know, it's quite a journey. It's quite a reverse of what the initial strategy was. You know, how does that develop now? What comes next in terms of the next development and the next innovation?

Oliver Dlouhý:So first of all, I must say it was really, really painful because we had to stop doing some things that the airlines did not like, which cost us lots of revenue. So, but we decided, you know, once we— people who know me know that I'm very stubborn. Once I decide something, I just do it. So the investors didn't like it, you know, a lot of our employees didn't like it, but we decided to actually sort of shoot ourselves in the leg, at least in the short term, and do what the airlines actually wanted to do in exchange for direct partnership, in exchange for building direct relationship. So we listened to them, and they told us what we didn't know before, that our practices were breaking their revenue management systems. I'm saying their, but I can probably say your revenue management systems. That our practices were preventing you from communicating disruptions to the customers, providing them refunds, and so on. So we realized all of that after talking to you. And we decided to shift our business model into becoming not just customer-friendly but also airline-friendly. And so we listened to you, we knew already what the airlines wanted, and now how to align this with what the customers wanted, right? And now we already have millions of customers, so the easiest way to learn was to basically ask them. So we ran thousands and thousands of surveys with many, many customers, and there were 3 main points that kept repeating all the time. The customers were worried, the customers were anxious, and there were 3 anxieties that were repeating all the time. Anxiety number 1, am I getting the best deal? There are so many websites, so many airlines out there. How do I know I'm getting the best deal? Second one, second anxiety: will I have all the necessary information for me to travel smoothly? Anxiety number 3: if something goes wrong, if there is a disruption, missed connection, cancellation, delay, who's gonna help me? Who's gonna support me? And once we learned that these are the biggest things that worry the customer, we have built a product around that. A product that is here not just to serve the customer, but also to complement the experience already provided by the airlines.

Rich Maslen:So, Oliver, tell us about this new idea you have and how you're stretching this out now across the world and Kiwi.com's guarantee.

Oliver Dlouhý:Yeah, you stole my thunder. I wanted to say the name. So yeah, the product is called the Kiwi.com Guarantee, and the goal of Kiwi.com Guarantee is to complement the experience that the airlines are already providing with the aim to really bring the best customer experience possible to the customer. So it addresses these 3 anxieties. First anxiety: am I getting the best deal? I already said that we have the most comprehensive search engine combining full-service and low-cost carriers all around the world. But as a part of the guarantee effort, we also invested a lot into being absolutely transparent about what the customer is paying for and why. You know that many OTAs out there are trying to sneak in some hidden fees, you know, charges here and there. We are absolutely transparent, so the customer can always make an educated decision. Is it worth it paying to Kiwi.com, or should I go to the airline directly? The second one: do I have all the necessary information? We are aggregating the data from all around the world, from hundreds of different sources, and about real-time flight statuses, about gate numbers, terminals, check-in desks, and so on. And we serve it to the customer at the right time when they need it. And this way, it can never happen that they will arrive to the wrong terminal, that they will wait at the wrong gate and miss their flight, and so on. Last but not least, the third anxiety: what happens if something goes wrong? As a part of the Kiwi.com Guarantee, we bundle something we call disruption protection. And that means that if flight is cancelled, if flight is delayed too much, if the customer is about to miss their connection, we allow them to rebook to the next best flight available free of charge. And next best flight, I mean the flight that arrives to the desired destination as close as possible to the original intended arrival. Completely free of charge. And what's really important here is that it's not just on the same airline that the customer originally booked with, but it can be any airline. So if Ryanair flight is disrupted, cancelled, or whatever, and the best available flight is BA, we just book the customer on BA. It can be 10 times more expensive than the original booking, we still do it. And this way we believe we have addressed both issues. what the customers are worried about, and at the same time, what the airlines are worried about, because this service really complements and enhances the experience that airlines are providing to their customers.

Rich Maslen:That's really interesting. I've gone to book flights quite a few times and seen a great deal involving a leg on Ryanair, a leg on easyJet, maybe a Wizz Air in there as well, that's, you know, hundreds of pounds cheaper than the next available direct flight. But it's that safeguard side, then that anxiety of worrying of, well, if it does go wrong. But it's change, and that's as an industry and as passengers, we like our comforts, we like what we're used to. You know, do you think it's a great offer, but you know, how will people adopt it? Are you already seeing from your previous experiences that people will really take advantage of this?

Oliver Dlouhý:So we've already launched the Kiwi.com Guarantee in 6 markets in Europe. And about 6 months ago, so we are already testing it, it was a soft silent launch. And what we see is that the NPS of these customers is above 70, which is really almost unheard of in our industry full of uncertainty and disruptions and so on. And what's even more interesting is that the NPS of those disrupted customers is actually above 40. And usually, you know, when customer is disrupted, no matter how well you support them, how well you answer their questions, how well you rebook them, their NPS was usually negative. And with the new Kiwi.com Guarantee and Disruption Protection, even those disrupted customers who had to arrive late to their destination, who sometimes missed their important event, whatever it was, actually, their NPS and their experience was ultimately positive, which is something I'm really excited about because, as I said, from the very beginning, Kiwi.com was built for the customers, and this way we are serving their needs.

Rich Maslen:Well, I'm sure, Oliver, we'll catch up at an event later this year, next year, and just see how this is progressing and how this is developing. It's a very, you know, you came into the market, you disrupted the market, and you're continuing to try to do that. So I wish you the best of luck with that. And yeah, please everyone, if we can have a round of applause for Oliver, please.

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