This article is the latest in our popular new series in association with Tito’s Handmade Vodka, which examines travel retail and airport sector ‘disruptors’ – focusing on companies and individuals challenging established models through innovation.

Flio aims to be the app for airports worldwide. How realistic is that aim given the desire of many airports to have their own app, and a proliferation of digital initiatives in the aviation sector? Wholly realistic, says Flio CEO Stephan Uhrenbacher, who talked to Martin Moodie about the remarkable progress the app has made in just  under three years. Edited by Kevin Rozario.

Stephan Uhrenbacher, Serial Entrepreneur and Founder of Flio

Introduction: Flio, the global airports app launched in August 2015, is now working directly with many airports (including Amsterdam Schiphol, Athens, Hamburg, Bremen, Cologne, Vilnius and Nice Côte d’Azur).

Its partnerships also encompass numerous food & beverage operators and retailers, including SSP, Host International, The Restaurant Group, Marché, Gebr Heinemann, and Eurotrade. Additionally, its burgeoning advertising function now boasts several blue-chip clients, including L’Oréal, Estée Lauder, Mondelez and Hugo Boss

The Flio app, founded by serial digital entrepreneur Stephan Uhrenbacher  and Brian Collie (the former BAA Group Retail Director, Chairman of World Duty Free and Chairman of lastminute.com), has built considerable momentum in the airport channel. Uhrenbacher believes that as well as making Wi-Fi connection child’s play, Flio can also build incremental sales for duty free and travel retailers, rather than being a competitive e-commerce player – which the CEO is adamant the app is not.

Martin Moodie: Stephan, Flio has been around since 2015 but you have recently completed a critical round of investment. Tell us what prompted that and how it’s worked out.

Stephan Uhrenbacher: AviAlliance Capital, a leading private industrial airport investor and manager, has taken a minority stake with what I would call a healthy single-digit million Euro investment.

It will fuel our growth. We see many opportunities to work with airports, retailers and brands – we have barely started. Most of it will go into expanding our top quality team: scaling up our sales team, but also hiring more product and content developers.

If you build a start-up from scratch, you can only get so far with the money found within your network.

Apps are quite expensive to build, particularly if you invest in growth. So, in the past I’ve typically gone to venture capitalists, mostly in Europe but also some from Silicon Valley. More often than not, it was an easier sell if it was a hot market – building an Airbnb competitor for example.

The global airport market is a much more difficult proposition for venture capitalists. You are dependent on working with the industry, and that means you have many different partners – and interests – to balance, which is tough. They’d much rather do something completely disruptive – for example replace an entire industry!

Which is not something you were planning, I imagine…

You can’t replace airports and retailers – at least we don’t in our approach. We work with them and we want to build additional ecosystems for them. In the end we generated more interest from people who had an ownership stake in airports or related companies, because everyone agrees that airports still have an obvious gap to fill. This is despite the travel industry being one of the first to be digitalised – with Expedia, lastminute.com and Kayak etc. – and the airlines and hotels doing their bit too.

In Flio’s latest version, the app advertises features of the airport the passenger is arriving into

What are AviAlliance’s expectations of their investment?

They own or co-own five airports. They believe that many airports will require what we deliver over time, and they’d rather be part of this than be standing on the sidelines.

Start-ups generally have the benefit of being quick to learn and adapt – you can throw stuff at the wall and see what sticks. This approach is a key success factor. Our team is incredibly small but we’ve done amazing work – at times it has been only ten people in total. Now it’s a bit more, and with that we’ve built interfaces and connectors to individual airport parking systems, toCIP lounges, to Heathrow Express and so on. As you may know, easyJet has a small stake in us; we’re working with them to display some of what Flio does within the easyJet app, which will take some time and effort to conclude. So, I’m very keen to add more developers.

We develop and maintain an android app and an iOS app, which are totally different architectures. And we also have the user side – couponing and all that kind of stuff. There are so many things that we’ve done, and in a state-of-the-art way.

“We’re very fast at building the different connections to airports’ individual flight information systems. It took us three weeks for the first airport – now we’re down to two days.”

It strikes me that, technically, you’re there. But that the biggest challenge may be the sell-in – i.e. convincing the airports. So it may be that you have to focus as much on sales and marketing and business development as you do on the technical side?

That’s right, absolutely. I don’t think the features that Flio currently displays have been done anywhere in a better way. I don’t think the product needs that many new features. It’s much more about selling it into new partners and getting them onboard more quickly.

Once we add more people, we can work with airports much faster and cut the backlog. We’re very fast at building the different connections to airports’ individual flight information systems. It took us three weeks for the first airport – now we’re down to two days.

But on the sales side, we currently have just two business development execs (plus me and Brian, of course) who maintain all these relationships with all our partners – which is, as you might imagine, a lot of work. At the moment we’re really still focused just on Europe. By adding more people, I’m bullish about Asia, where I really want to get a foothold.

We believe  that Flio could be an equal partner for airports, retailers and brands (the ‘Trinity’) – an enabler to get travellers into stores. We have some very happy clients, and have to restrict our digital advertising sales to travel brands due to limited ad inventory, but the large duty free groups have been slower to work with us than we thought.

“Typically Flio works with large airports such as Athens or Amsterdam Schiphol because they have already experienced the cost of constantly updating an app and attracting an audience. We haven’t spoken to any airport that’s been happy with their own app efforts.”

What have been the key stumbling blocks?

One thing that everybody says coming from a start-up or Internet background is that there is a long run-in. We’ve had a number of very detailed discussions with airports, and so far we have not really lost any contracts; so we’re certainly bullish.

Airports have to think about building their own systems, buying something from SITA, for example, and then rebranding it as their own, or choosing another option. That’s a tough decision for the IT department, but it’s typically led by the commercial side. However we’ve learnt that the arguments are on our side, because it’s about economies of scale.

Typically Flio works with large airports such as Athens or Amsterdam Schiphol because they have already experienced the cost of constantly updating an app and attracting an audience. We haven’t spoken to any airport that’s been happy with their own app efforts. For smaller airports, because of our super-low cost to them, we are the best option for a state-of-the art app.

We’ve built something which is high quality and much cheaper for the individual airport. More than that, we give them existing users already using our app when they join. This is important, as the most expensive part for the airport is to convert users to their mobile app. So ,while it  appears to be  a drawn-out process, it’s actually an easy sell.

“For smaller airports, because of our super-low cost to them, we are the best option for a state-of-the art app.”

But it is still a Flio app, not ‘their’ app. Isn’t that an issue?

We are all about economies of scale. Of course, an airport could choose to have their ‘own’ app in the app store, and we could publish this for them. But the download and usage numbers would be so low, it doesn’t make sense.

The beauty of having only one app that is co-branded with each airport is that all passengers who have installed the app get access to all of an airport’s information so they can book lounges and services, and get shopping offers. And, don’t forget, Flio also brings the international in-bound traveller to the airport offers – not just the local regular flier.

One appmanship: “Of course, an airport could choose to have their ‘own’ app in the app store, and we could publish this for them. But the download and usage numbers would be so low, it doesn’t make sense,” says Uhrenbacher.

Why the reluctance from duty free retailers? And how are you getting them to buy in?

Possibly because Flio is a digital channel, many assume that we are e-commerce [and therefore a rival -Ed]. We are not. We don’t sell any products over the app – services, yes, but not products.

Our business is to get people into stores. We work with brands to advertise their campaigns, and people pick up the products in stores – it’s that simple.

I often feel that duty free retailers are still so tied up with their own CRM efforts that they are afraid to work with us.

In the F&B sector, it’s entirely different. In Europe we work with HMSHost, SSP, The Restaurant Group and many others. It’s fairly easy for the F&B guys to work with us because they don’t have that much of a digital infrastructure to interfere with.

There’s not that much competition between what we do and what they do internally, and we have a confidential case study from an F&B client that proves they have a higher ticket value after doing promotions with us.

In the case of duty free retailers they need – or have – their own CRM/loyalty product. Heinemann has a very good one, for example, and Dufry has its new Red programme. They believe in their loyalty programmes; but all we’re trying to do is plug their programmes into Flio, and allow every Flio user to access them.

“We are investing massively to make our flight information the best in the world”

Spell out how the retailer then benefits.

It would dramatically increase the number of users, the accessibility, and particularly the number of passengers who want to get closer to the retailers but won’t bother to register for a loyalty programme either on a website or filling out a form with a sales rep.

It’s easier to convert these people online and say, ‘Do you want to join x, y, z loyalty programme?’ Going forward, this is a task we will be successful with – the numbers will convince most of the larger retailers. We’re probably closer now than ever before to getting duty free retailers over the line.

Currently, because all this is so new for quite a few of them, they want to protect their turf and ‘own’ the data, so there is a conflict. In reality, nobody really owns data , except the travellers themselves. Today retailers require my boarding pass, so they know where I’m flying to. Flio has all that information and more. We don’t give a retailer individual users’ personal data, such as names – just the analytics, so that we can target each passenger with individual offers. We just need to have their preferences.

Those preferences can be surprising. I know you built the app with certain features in mind, only to find others were more popular. It’s a journey of discovery, I suppose.

The actual usage has surprised us. We originally thought information such as the best place to have a layover, or special needs for parents with babies, or access to transportation, such as Heathrow Express for example, would all be killer features. Flio offers the fastest way to book the direct train into London – in a matter of seconds. But the number of passengers using this service is still low.

Flio offers over 150 maps for airports, with a goal of mapping 300. The Flio team was surprised as to how many passengers track their flights with the app.

On the other hand, flight information for departure and arrival times, which you can get at any airport display, and also increasingly from airlines, surprised us as it is the feature that gets by far the most usage. Hence, we are investing massively to make our flight information the best in the world.

“The reality is that, within the airport space, there is very little in the way of digital assets that you can access – for people looking down (at their phones) instead of up (at the terminal advertisement spaces). The ones where people look up are clearly not personalised, and that’s a big problem.”

Again, our developers implemented a beautiful flight tracking tool for individual travellers: we’ve been absolutely amazed to see how intensively this is being used by passengers. We freely admit that we haven’t figured out where we will take this yet.

What’s next?

We will soon expand beyond the Flio app into helping airports monetise their customer-facing digital assets through the Flio Digital Airport Experience. With the lack of truly digital media at airports, we will work with them to market their assets, such as the Wi-Fi log-on screens and kiosk systems.

The reality is that, within the airport space, there is very little in the way of digital assets that you can access – for people looking down (at their phones) instead of up (at the terminal advertisement spaces). The ones where people look up are clearly not personalised, and that’s a big problem.

Flio intends to market digital assets for airports

Will digital personalisation definitely be a reality in airports?

Everybody’s looking for individual attention, so we need to increase the available personalisable inventory that we have. We are now working with airlines and online travel agents to distribute personalised advertising content to passengers in airports – or those who will be at an airport soon. It’s a space that’s totally underappreciated.

I’m talking a little bit about the future here. We can do a lot of interesting stuff – putting up ads for travel brands in airports’ Wi-Fi log-in screens, or display personalised ads within the web browser when connecting to the Wi-Fi. Together with airports, we are proactively thinking about how we can increase the available digital advertising.

Advertising clients are hungry for truly digital and personalised assets. We are carefully tracking our users – and large airports are receiving a share of the revenue Flio generates through advertising if the airports significantly increase the number of people who install the app. We believe this is the model for the future. Amsterdam Airport Schiphol has implemented this already.