Here’s an interview with Edip Pektas, CEO of Airblox, a digital exchange platform for airlines and freight forwarders to trade air cargo capacity in real time.
Can you tell us more about what prompted you to create Airblox?
By nature, I am an efficiency geek. Seeing my customers, airlines and freight forwarders constantly struggling to sell cargo space going through gazillion emails and phone calls, was what attracted me to look for a solution.
Air cargo is an expensive commodity that has no common marketplace. Price discovery is a constant struggle due to lack of data quality among other factors. Block space agreements was a perfect place to start because I did not want to compete in the spot market booking platform space. I believe our industry needed a way to connect to capital markets in a much more efficient way and digitizing BSAs was a great opportunity.
Airblox today is the best platform for airlines and freight forwarders to trade air cargo capacity. It is flexible, agile and a tactical tool for market participants to visualize their exposure, expand or contract their capabilities and best of all, another way to manage their risk in real time.
How does it work? What are the advantages for stakeholders using the platform?
In the world of air cargo, there is friction at every step of the way and it’s costly and time consuming. We knew from day one that our solution had to be engineered with a simple use case so that buyers can easily sign up and create electronic block space agreements within minutes so that sellers are able to react to availability as quickly as possible.
Once an allocation is created on Airblox by a capacity owner, in most cases, an airline, it becomes visible to the global community of buyers. A transaction can be executed in three ways that we call Bid/Buy/Block, one of which will create a space allocation based on a ULD position on a particular flight or a series of flights based on the frequency and the number of positions transacted.
Versatility is a key to a successful platform. Airblox is a very agile exchange that provides benefits to many different players in multiple verticals. It’s not a platform that will make one party in the supply chain of air cargo irrelevant neither today nor in the future. At the core of it, it’s designed to provide real-time pricing for a future space so it is designed to be a tactical and strategic tool for capacity decision makers.
Through customizable dashboards, users will be able to see their position analytics, run scenario analysis and make informed decisions based on dynamics that affect supply and demand.
You are also the CIO for Alliance Ground International. Where is the industry lagging when it comes to automation and digitisation?
We are at the beginning of a major aviation boom that will be one of the largest in history. From airport equipment technologies to digital services solutions, new technologies are emerging every day. The common theme I am happy to hear is collaboration. A true elevation of the whole industry is only possible if we are all connected.
AGI is the fastest growing ground handler in the United States. Our technology department is continuously looking at ways to centralize data that is crunched periodically so that our operations controls, warehouse and customer services teams can leverage the information in the most effective manner. However, we have to harness our own data, which is time consuming and inefficient.
You’re only as good as your weakest link, which today is the unwillingness of supply chain players in providing data for the greater good. The industry has to work on open-source platforms where data can be shared without the fear of losing competitive edge.
Airblox has been active in industry events and conferences. How important are these face-to-face meetings? What has been the response from the market?
These events are where key decision makers come to explore synergies. Being a tech platform requires that we have face time with each and every one of them. Airblox has a unique value proposition and we find it much more effective to go through the educational process in person. At the end of the day, we are a relationship business and we don’t want to lose sight of that just because our solution is on the cloud .
We are currently in talks with major airlines in onboarding them to our platform. It’s fascinating to learn how each organization perceives cargo and capacity. However, we learned that, for the sake of gaining a competitive edge, simple processes have become extremely complex and hard to scale back from. When we explain to them what Airblox can do, they get excited and start lining up demo sessions with every major stakeholder in their organization.
With the addition of Avico, what will be the strategy for Airblox? Will the main focus be on trading capacity on charter services?
Avico is a great company. Whether its charter or a single position on a scheduled flight, our viewpoint doesn’t change from the standpoint of standardizing and digitizing a contract and making it available at a global scale. We believe that capacity trade should start at the market level and trickle down from there to each and every AWB. Since we are not a traditional shipment booking platform, we have a broader view of the market.
Being a fintech startup, how are you looking to raise capital? What are the mechanics for interested investors?
We have funded our development so far with our own capital and through our family office network. We just opened a SAFE round and are accepting commitments from strategic investors. There is quite a bit of interest from strategic players that are either large freight forwarders or financial institutions with an appetite to provide not only equity but credit lines to finance eBSA transactions.
Can you give us a hint on the launch date?
We have been live since Air Cargo Americas Conference earlier this year. Airlines and Freight Forwarders can contact us to get onboarded and start the digital block space agreement journey. We are an API friendly platform and we make every effort to make the process easy for our customers.