“Radixx software gets airline profits off the ground”
Source: TechJournal South – February 18, 2011
By: Allan Maurer
ORLANDO,FL – Getting airline profits off the ground is tougher than one might expect, considering how essential air travel is to our business and personal lives in the modern world. But airlines large and small have gone belly up because they couldn’t land enough paying passengers. Radixx, a software firm in Orlando, puts some jet fuel in airline profits.
Ron Peri, founder and CEO of Radixx, tells us that building an advanced airline passenger service system is a complex endeavor that defeated several major players who spent hundreds of millions and years trying. “There have been a lot of attempts to build this type of software that failed,” says Peri.
Radixx itself only succeeded by doing it incrementally over many years, he says at a cost of about $50 million.
A myriad of problems have to be solved: chief among them, getting the airlines specifications and working with legacy software systems, but the whole thing is complex, Peri says. The air industry business model is in a rapid state of change. You must find a way to compete profitably in an environment where low cost structures and non-traditional business models are now the rule not the exception.
Presenting at SEVC
Radixx, spun out of a previous airline focused company in 1998, is among the 50 innovative firms presenting at the fifth annual Southeast Venture Conference inAtlanta March 2-3. And what a story Radixx has to tell.
“We have a variety of airline clients who will state emphatically that implementing Radixx Air made them profitable, more profitable, or kept them in business,” says Peri. Great Lakes Aviation, for instance, stated in a filing with the US Securities and Exchange Commission that Radixx was the reason for the company’s first profitable quarter.
Air Iceland made its first profit in 40 years of operations after installing Radixx software.
Another airline saw a 250 percent increase in bookings using the software. Go Air, which had never had more than 100,000 passengers in a month leaped to 147,000 the month it first used the product and moved to 250,000 a month.
“It’s had a tremendous impact,” Peri says. “It’s just a more effective and better way of selling.”
The Internet changed everything
The Internet changed everything for airline ticket sales just like it disrupted publishing and music sales and many other aspects of modern business. In the old days, Peri says, a travel agent would book you with the airline that gave them the best commission and you took what you got. Now, on the Internet, “Airline fares are obvious to everyone,” Peri notes.
To deal with that new transparency, which lets people find the cheapest fares quickly, airlines sell everything they can sell as services, from baggage fees to meals or better placement in line. That requires a software system that can handle constant adaptations.
Radixx has about 30 airline clients now and no two do things the same way, Peri says. “But we are at a point now where we have a product,” which he notes was far from easy to create. Now the company is looking for venture backing to help it build out its brand and sales channels.
Radixx Air charges on a transaction basis. It allows selling through any distribution channel, e-ticket or ticketless, legacy or modern.
“There have been many attempts to build this type of software that failed,” says Peri. “We’re kind of the little engine that shouldn’t have been able to but did, little by little.”
He says that if the company lands funding, the lessons it has learned creating its product give it some insight into what’s coming out of the clouds. “We could do some things along the lines of breakthroughs,” he says.
