Officially launched in March 2022, Airblox pitches itself as a fintech company within aviation, where financial technology meets logistics. Speaking to Air Logistics International at the TIACA Air Cargo Forum, Farhan Farrukh explained that Airblox is an exchange where capacity is traded electronically in the form of standardised contracts which it calls eBSAs (electronic block space agreements), standardising and digitising aircraft capacity.
Farrukh explained that when airlines sell capacity, it is sold in the form of block space agreements, offering hard blocks, where capacity is pre-paid for a period, and soft blocks, where an airline will go to a freight forwarder with a verbal commitment to a certain number of positions but preferential treatment is not guaranteed. The eBSA takes these agreements, standardises them and puts them into a digital format.
“The eBSA is the primary launch of how we did it, becoming the wholesale market of air cargo capacity,” said Farrukh.
Capacity can also be listed electronically by digitising the contract for a charter flight and digitise that space, or offering loose cargo, which can also be digitised and sold as a contract.
Its official launch was March 2022 but the idea’s inception was 2018 when the founder, Edip Pektas, felt air cargo capacity was being mismanaged when he was running Chicago-based ground handling company Maestro International Cargo. That was when they discovered the problem that needed solving.
Explaining how the two of them ended up in this position, Farrukh and Pektas have known each other since college. After college, Farrukh went into product management and software delivery, and Pektas went into finance, working as a trader which led to investment banking.
Opening his own venture capital company in 2017, Pektas invited Farrukh to join him investing in early stage companies, and he wished to take advantage of Farrukh’s product management background to decide which companies to invest in.
Farrukh said, “That’s where he stumbled on Maestro International Cargo as a ground handling company. Since then, once he discovered the problem, we discussed it and went through the entire inception to the execution of the problem so I came on as a co-founder and project management lead.”
It was an exciting prospect for Farrukh, who has spent his entire career solving problems working on solutions but he never had the opportunity to build a solution from scratch. It was a three year process from thinking about how to solve the problem of air cargo capacity being mismanaged to deciding that the exchange was the issue.
When they realised what the problem was, Pektas and Farrukh decided that they did not want to be another booking platform.
Farrukh said, “When we finally decided that the exchange was the platform we wanted to pursue, at that point, I quit my full-time job and that was my calling to say, you know what, this is what I want to build, a marketplace and an exchange.”
Feedback from the market has been very positive and interesting to watch how people will adopt a disruptive technology. A few months after Airblox’s launch, there were over 150 users on the platform searching for capacity, and just under 10 customers listing and transacting on the platform.
Airblox employs close to 20 people and its product roadmap is very aggressive, so the company is looking to double in size by the end of this year.
The head office is in Chicago and the growth plan is to have sales offices globally. Airblox is in active discussions to establish a sales presence in Vietnam and the company is looking for someone in Africa and Europe to develop business on those continents. Vietnam has been chosen because of its strong growth in the manufacturing and services sectors, which is driving demand for air cargo.
Farrukh said, “The air cargo market in Vietnam is on a very steep rise and they have more demand than supply. The investment trajectory pre-Covid, during Covid and post-Covid has been exponential. We want to ensure that we are in the right place at the right time where air cargo capacity and digitisation go together.”
Looking into the future, Airblox wants to bring standardisation and digitisation of cargo capacity contracts to the ocean, trucking and rail sectors, and tie this to Web 3.0 and blockchain services.
Farrukh is confident about the future, saying, “A simple concept that I believe in product management is that when you simplify, you multiply. In the world of air cargo capacity where complexity is constant, simplifying any type of transaction in any industry will yield and multiply great results.”
This article was published in the February issue of Air Logistics International, click here to read the full issue.