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How Airlines Are Using Blockchain Technology for Ticketing, Security, and Maintenance

How Airlines Are Using Blockchain Technology for Ticketing, Security, and Maintenance

Airlines & Blockchain Technology

Airlines are complex businesses operating thousands of flights, serving millions of passengers, and conducting maintenance on hundreds or thousands of planes. They do so on thin profit margins with tight schedules. As a result, where there are opportunities for technology to improve ticketing, maintenance, and security, airlines will jump at the increased efficiency. Blockchain technology stands poised to make a dramatic entrance into airline management in the upcoming years.

Travel involves data sharing across multiple parties and various parties throughout the journey. For instance, a travel agent may book your ticket. Next, a third-party provider may handle your baggage. Then, the government will want to verify your identity and conduct a security screening. Additionally, your plane main receive maintenance from an independent contractor, not the airline. Finally, the airline will want to reward you with loyalty points in the form of flyer miles.

All of these applications involve maintaining and storing a ledger of traveller, baggage, flight, and aircraft information. Sharing this information selectively and securely has been a major problem for the aviation industry.

Blockchain may be able to change that. Smooth data exchange leads to greater efficiency, safety, and security for airlines. With so many parties involved and systems in play, several airlines are looking into blockchain’s applications to provide a single source of truth for air travel.

Russia’s Biggest Airline, S7, Uses Blockchain to Issue Tickets

Russia’s largest airline, S7, has partnered with the country’s largest bank, Alfa-Bank, to issue blockchain-based tickets. The change allows the airline to issue tickets much faster than traditional confirmation methods. Once issued on the blockchain, the ticket is immutably connected throughout all S7’s business units and partners. Prior to implementing blockchain-based ticketing, settlement between S7 and various ticketing agents could take up to two weeks.

S7 uses the Ethereum blockchain for its ticketing system, although it’s unclear whether the solution is built on public Ethereum or a private version.

Blockchain has long been promoted as a way to simplify the ticketing process, especially in industries where identity, security, and customer privacy are paramount. This Russian collaboration is likely the first of many more airlines and travel providers to use blockchain ticketing.

The German airline, Lufthansa and Air New Zealand have also explored blockchain ticketing and travel notifications as part of a collaboration with Swiss startup, Winding Tree.

Singapore Airlines is Tokenizing Its Frequent Flyer Miles

Singapore Airlines will be launching a digital wallet for their KrisFlyer frequent flyer miles in the next six months. The wallet and token will operate on a private blockchain that includes retail partners in Singapore where customers can use their miles.

CEO Goh Choon Phong recognizes that Singapore Airlines is the first to use blockchain to tokenize its rewards program. This comes as part of a larger initiative to invest hundreds of millions of dollars in digital technology over the next few years. The goal is increasing Singapore Airlines’ status as a global competitor and leader in the aviation industry.

The Unsexy Side: Blockchain for Aircraft Maintenance

Ticketing and loyalty programs are interesting applications for blockchain, but they may be slower to adoption as current legacy systems will be difficult to transition. One area where there is a huge value opportunity for blockchain to replace legacy systems is in the unsexy context of aviation maintenance.

Currently, many airlines still use paper maintenance logs or complicated database systems. However, John Schmidt, head of Aerospace and Defense at Accenture, sees blockchain making an impact in maintenance logging and component tracking in the next few years.

Think of the thousands of parts that go into an airplane. Over the years, those parts get overhauled or replaced with new parts. The replacement and configuration could all be tracked on the blockchain, giving all parties involved a complete picture of the aircraft’s health and history.

Whereas currently, airlines are inclined to use the the same maintenance teams repeatedly, even if they have a backlog, with blockchain maintenance records airlines could shop around for the fastest, most cost effective repairs.

Lufthansa’s Blockchain for Aviation Initiative

Lufthansa Industry Solutions, Lufthansa’s research and development arm, is exploring in-depth the potential for flight maintenance tracking on the blockchain. They’ve even created an entire initiative known as Blockchain for Aviation (BC4A)

Using the blockchain, aircraft components can be registered and tracked from manufacture to installation. If a part malfunctions, technicians and investigators would be able to track the installation date, flight hours, overhauls and repairs, plant where it was produced, and date of manufacture. Since blockchains are transparent and immutable, airlines couldn’t fake their maintenance records or conveniently lose records in the event of an aircraft malfunction.

This integrated storage of maintenance information makes it possible to share documentation across companies and governments. This reduces risk for all parties, since manufacture, installation, and maintenance of components can now be independently verified. Solutions like these could even include unique signatures for certified A&P mechanics and inspectors to make additions to the record.

The BC4A initiative seeks to bring together software engineers, regulators, manufacturers, and mechanics to create an integrated system for maintenance management.

Air France KLM Exploring Blockchain for Maintenance

In addition to Lufthansa’s initiative, european airline giant Air France KLM is working on business cases for blockchain. These include maintenance management workflows. Blockchain’s characteristics map well to many areas of airline operations. However, before the aviation industry can take advantage of blockchain, they’ll need to digitize their data. In many areas, airlines still use analog data storage methods, and digitizing all records is the first major hurdle to blockchain adoption in aviation.

Conclusion

Blockchain has the potential to transform the airline industry over the coming years. The aviation industry needs the ability to create shared records that are secure and difficult to alter. This challenge of sharing data while also guaranteeing security is a perfect application for blockchain, smart contracts, and decentralized apps. Blockchain can improve the process of ticketing, loyalty rewards, identity verification, passenger data security, and maintenance tracking, simultaneously making this information more available and more secure.



More Stories By Alex Moskov

Alex is the Editor-in-Chief of CoinCentral. Alex also advises blockchain startups, enterprise organizations, and ICOs on content strategy, marketing, and business development. He also regrets not buying more Bitcoin back in 2012, just like you.