Squake, Uptrip, Navit (formerly Rydes) and other travel startups have emerged from Lufthansa Innovation Hub in recent years.
Now 10 years old, LIH is continuing to incubate startups and looking ahead to the next 10 years and what its priorities and challenges might be.
PhocusWire spoke to Xavier Lagardere, vice president of innovation and chief data officer of Lufthansa Group and recently appointed managing director of LIH, about the work of the hub, its evolution and Cosmos, its newest startup.
Cosmos is a platform to help airlines, airports and their partners monitor performance against contracted service levels and flag things when they go wrong to achieve quicker, better outcomes.
Lagardere describes Cosmos as “probably the best example of how we like ventures to come about,” adding that it was born as a project to solve a problem and has developed into a venture.
“There’s actually the potential to solve a problem for other airlines and other industries. That’s what’s nice is this exercise of venturing – the ability to iterate, pivot where necessary and now, especially for a corporate innovation center, not necessarily preset if it’s going to be an internal project leading to a spin-in, if I may call it so, or an external project that’s going to lead to a spin-off. The beauty I find is in keeping flexibility along the way.”
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The company already has a reputation for spin-offs with examples of businesses born in the hub before being spun off, including sustainability marketplace Squake and mobility startup Navit.
How Cosmos might evolve is unclear, but LIH has evolved from its initial four pillars of build, partner, invest and discover. The strategy became more about build and partner post pandemic, something that has been carried forward to today. And, to that end, an effort to connect external ventures to internal needs has been launched in recent weeks.
“Partner has even more potential. Partner is the easy way to innovate. You have a problem, you don’t even reinvent the wheel, there are great startups out there that have already solved this problem 20 times maybe in other verticals. And partner which, in innovation is typically called venture clienting, is a discipline we’re really doubling down on.”
Evolving needs
Just a few months into heading up the hub, Lagardere said his short-term priorities are to increase the “volume of activities and drive concrete outcomes” at the hub, especially now that the wider Lufthansa Group, with a new executive board in place since July, has increased the focus on innovation and is giving more prominence to the impact of data.
“We are looking towards more of our own projects, potentially more ventures coming to the streets and inviting more co-investors to join us on our ventures.”
Longer term for LIH, according to Lagardere, is to continue connecting the dots between the hub and the mother organization and help the group plan for its future. He added that it’s about leveraging everything it gleans from its insights and trend monitoring through its travel and transport mobility research arm to finding opportunities “not natively tackled by the mother company and start them up.”
Partner is the easy way to innovate. You have a problem, you don’t even reinvent the wheel, there are great startups out there that have already solved this problem 20 times maybe in other verticals.
Xavier Lagardere — Lufthansa Group
And while the hub has developed over the years in terms of scale and being more professional, he added that it has stayed core to the original vision of driving “impact beyond the boundaries of our Lufthansa Group home.”
Lagardere also sees scope to evolve further by working together with the operations department of the airline group. The group’s chief technology officer, Grazia Vittadini, has already set up an innovation and technology factory that aggregates all things innovation with a software hangar for operations.
“We have a fantastic opportunity to joining a broader remit together with the operations department. To really go into core efficiency items that affect our costs, our flexibility, our ability to manage our assets and deliver quality and performance.”
He added that while previously the hub has been involved in ideas and developments around travel retailing and Web 3, the scope is now there to “go into things that are more hardcore airline to a certain extent but still need to be enhanced through the lens of technology.”
Future growth will not be without hurdles. With both his innovation and data hats on, Lagardere said challenges for the hub include its ability to work across the organization to bring customer, operational and even technical fleet data together.
“When you start doing this, you really have the potential to develop solutions and address problems on a non-trivial basis.”
He also talked about accelerating what the hub is doing to bring about real transformation.
“What we’re doing for the time being is still not at the scale of this, and the challenge comes from the need to prioritize innovation as much as you want to prioritize cost savings and fleet purchase. That is, for an airline group, an equation that one needs to navigate.”
