Earn Crypto While You Fly: Why Airline Reward Programs Are Taking to the Blockchain

Harri Weber

Harri is dot.LA's senior finance reporter. She previously worked for Gizmodo, Fast Company, VentureBeat and Flipboard. Find her on Twitter and send tips on L.A. startups and venture capital to harrison@dot.la.

​A FlyCoin ad on an airline passageway.
Courtesy of FlyCoin

Sign up for dot.LA’s daily newsletter for the latest news on Southern California’s tech, startup and venture capital scene.

These days, more startups are looking to cash in on crypto fever by offering customer loyalty rewards through the blockchain. But how many of them also happen to run their own airline?

That’s the question posed by Josh Jones, the Los Angeles-based investor and crypto evangelist whose role in resurrecting regional airline Ravn Alaska was the impetus for his latest venture, FlyCoin. Billing itself as “the world’s first crypto frequent flier program,” the startup is built around FLY, a crypto token minted on the Ethereum blockchain that travelers will be able to earn by flying—much like traditional frequent flier miles.


To fund its launch, L.A.-based FlyCoin closed a $33 million seed round earlier this month led by Jones, who co-founded the web hosting platform DreamHost and recently made headlines after losing millions in Bitcoin through a SIM swap attack. Other investors in FlyCoin’s funding round include System1 co-founder Michael Blend, TenOneTen Ventures, 8VC, Liquid 2 and Gaingels. The startup declined to publicly disclose its valuation. (Disclosure: Jones is an investor in dot.LA)

Currently, the only way to earn FLY is by booking a flight through Anchorage, Alaska-based Ravn, which exclusively serves its home state. Later this year, FlyCoin plans to make the token available on crypto wallets and exchanges, meaning holders can exchange it for other cryptocurrencies or even cash.

Yet before FlyCoin could get off the ground, another startup had to endure turbulence amid the pandemic. L.A.-based FLOAT Shuttle (FLOAT was an acronym for “Fly Over All The Traffic”) had only just launched when lockdowns initially began in 2020; with backing from Jones and other investors, the startup airline intended to fly commuters over clogged Southern California freeways for a monthly subscription starting at $1,250.

But after the coronavirus cleared up the Southland’s notorious traffic for a months-long period, FLOAT had to look for opportunities elsewhere. It found one in the form of a deal to buy the beleaguered Ravn out of bankruptcy, resurrecting the regional airline. (FLOAT now plans to launch a sibling airline called Northern Pacific Airways, which will offer international flights through Anchorage.)

FlyCoin CEO Lenny Moon FlyCoin CEO Lenny MoonCourtesy of FlyCoin

FlyCoin was initially born out of a need to establish a frequent flier program for Ravn. Years earlier, Jones and System1 co-founder Blend had explored launching a crypto-enabled loyalty rewards business—making Ravn an opportunity to breathe life into an old idea, Jones told dot.LA. “We’re not trying to be too crazy—we’re just taking crypto loyalty tokens to airlines, and we have the advantage of having an airline,” he said.

FlyCoin’s ties to Ravn and Northern Pacific give it a vehicle through which it can build momentum for FLY. The startup aims to eventually expand the token’s reward system to other airlines, hotels and hospitality businesses, as well.

Whatever alliances it can form will help FlyCoin stand out in an emerging crypto customer rewards market. While the airline industry has dipped its toes into the blockchain, the scope of its efforts have thus far been limited—though there are ventures like blockchain platform Loyyal’s partnership with Dubai-based airline Emirates. Carriers like Lufthansa and Singapore Airlines have also pursued crypto-related efforts.

Still, the largest airline operators have relatively little incentive to innovate in the space, according to FlyCoin CEO Lenny Moon. The likes of United Airlines and American Airlines have billions of dollars in debt tied to their existing customer rewards programs, and neither company responded to inquiries on whether they plan to develop blockchain-related initiatives.

“They don’t want to disrupt the status quo,” Moon told dot.LA, also criticizing established airlines’ “walled” approach to loyalty rewards and their point expiration dates. “We’re sitting in 2022—now that we have cryptocurrency, why should we have something that is so archaic in terms of the reward system?”

Subscribe to our newsletter to catch every headline.

Cadence

Riot Games Doubles Down on Mobile With ‘Aim Lab’ Investment

Samson Amore

Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him

Riot Games Doubles Down on Mobile With ‘Aim Lab’ Investment

Riot Games has invested in virtual shooting range developer Statespace, accelerating the Los Angeles video game developer’s efforts to dominate the mobile gaming space.

Read more Show less
https://twitter.com/samsonamore
samsonamore@dot.la

Meet Surf Air Mobility, the Startup Trying To Electrify Air Travel

Samson Amore

Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him

Meet Surf Air Mobility, the Startup Trying To Electrify Air Travel
Courtesy of Surf Air Mobility

The airline industry is a notoriously terrible polluter, with large carriers struggling to find ways to limit the more than 915 million tons of carbon emissions produced by their industry each year.

Read more Show less
https://twitter.com/samsonamore
samsonamore@dot.la

Ranavat’s Founder on How Pregnancy and Ayurveda Inspired Her to Start Her Skincare Company

Yasmin Nouri

Yasmin is the host of the "Behind Her Empire" podcast, focused on highlighting self-made women leaders and entrepreneurs and how they tackle their career, money, family and life.

Each episode covers their unique hero's journey and what it really takes to build an empire with key lessons learned along the way. The goal of the series is to empower you to see what's possible & inspire you to create financial freedom in your own life.

Michelle Ranavat
Photo credit: Grey and Elle

On this episode of Behind Her Empire, Michelle Ranavat talks about how pregnancy and traditional ayurvedic remedies inspired her to start her skincare company, and how she grew it without relying on outside funding.

Read more Show less
RELATEDEDITOR'S PICKS
LA TECH JOBS
interchangeLA
Trending