Airline websites are terrible. It’s hard to book flights, so imagine how hard it must be to claim compensation for delayed, canceled or overbooked flights. Meet AirHelp, the startup that will save you all the hassle and claim money for you. Today at Disrupt NY, the company unveiled a major new feature, making the claiming process much easier.
“Before today, you had to go to our website or app to give us your flight information. Then, you could see how much you could claim — but there is still a bit of friction in that,” AirHelp CMO Nicolas Michaelsen told me in a phone interview before Disrupt. “Now, you connect your Gmail account, we search for your flight itineraries and figure out how much you can claim. If you’ve been on a delayed flight for the last three years, you can claim money for that.”
But how much exactly can you claim? For a delayed, canceled or overbooked flight in Europe, you can get up to $800 per flight. In the U.S., you could end up with $1,300 for an overbooked flight. That’s why airlines will fight you very hard not to give you your money back. According to AirHelp, only 0.1 percent of eligible passengers get their compensation.
Not only AirHelp will do the hard work for you, but it will also generate some substantial revenue at the same time. And this is AirHelp’s secret sauce — every time the company goes through the compensation process, it takes a 25 percent cut. If there is nothing to claim, the startup doesn’t take anything. It bets that passengers are willing to give up that much because they wouldn’t have gotten any compensation without AirHelp.
“If passengers try and claim themselves, they’ll have to send tons of documents, they’ll experience dead links. And if you get through that hurdle, you’re likely to be rejected by the airline saying that it’s an extraordinary circumstance,” Michaelsen said. “We auto-generate the legal documents that you should send to the airline.”
Digging through all your email could take a while. So after connecting to your Gmail account, you can just close the window and do something else. You’ll receive an email with interesting stats and potential claims a few hours later.
After that, you have to give AirHelp the rights to handle the claims, and it’s done. It can take a few weeks to get your money back. Finally, the startup will ask for your bank information to transfer the money. But even though this sounds like a cumbersome process, 90 to 95 percent of it is automated.
So far, 25,000 people have used the service. AirHelp raised a $400,000 seed round from business angels. The startup also participated in Y Combinator’s latest batch.
With its 25 percent cut, the company is already doing very well. The team of 16 will turn profitable within a month or two. “We’ve been making revenue since day one,” Michaelsen said.
Questions & Answers
Judges: Thomas Korte (AngelPad), Erik Lammerding (N3TWORK), Kathryn Minshew (The Muse), and David Pakman (Venrock).
Q: Can you attack other areas, like class action claims?
A: You’ll see more delays and more cancelations. This is our space.
Q: What’s the reaction from the airlines?
A: Some of them are very friendly, it’s the law after all. But we’re proud to be hated by the leading airlines in the world.
Q: Could you mine data and make recommendation about being smarter about travel?
A: Definitely, we could move into that space.
Q: Do you have a success rate that you can share?
A: 10 percent of the claims are rightfully rejected. That could be extreme weather situations, an ill passenger, or a strike at the airport.
Q: It sounds great, free money. It sounds a little too good to be true. What’s the secret sauce?
A: We are being copied every day. But this is not something you do overnight. One thing is that it’s hard to know that your flight is delayed. It comes from multiple sources, it takes time to build that coverage. You have to submit a lot of claims to see what is working and what is not working. This is something that looks very simple on the outside.
Q: When did you start?
A: We’ve been working on this for more than a year.
Q: How many flights have been submitted and how many have been paid.
A: We’ve handled 25,000 flights. Most of them have come over the last month after our launch. On average, it takes 6 to 8 weeks to get your money. That’s why many requests are pending.
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