How will Blockchain Benefit the Aviation Industry?

Blockchain can provide a more decentralized, secure, and stable environment where business and commercial transactions are more reliable and transparent, blockchain has the potential to disrupt processes in many industries. Some airlines are already exploring the application of blockchain in various areas such as customer service, repair, and maintenance of aircraft, ground operations, and resources to develop overall administration.

How will Blockchain benefit the Aviation Industry?

The main reason for blockchain’s popularity in the airline industry is its capability of storing information on a shared digital ledger that can be used for storing data associated with the maintenance status of aircraft, flight schedules, and other data. For instance, blockchain can be used for the registration of details such as the date of manufacture, serial number, inventory of spare parts of a specific component, and, other data that the technical team can quickly locate while repairing and supporting.

Blockchain Technology Use Cases in the Aviation Industry

Identity Management

In the airline sector, forging the identities of individuals comes with serious threats, including the possibility of terrorist activity at airports or on flights. Blockchain can use biometrics to validate identities. Furthermore, once it is validated, the identity is stored on the blockchain where it cannot be altered in any way due to the decentralized and secure network. Besides reducing human errors that occur during the process of checking identity documents, in the long term, blockchain could potentially result in biometric identification replacing paper passports.

Streamlining Digital Travel Systems

All airline companies face inefficiencies caused by fragmentation costs. They arise due to cost differences from additional features such as upgrades and premium services from customers using different services or operators to save money. Blockchain technology presents an opportunity to streamline these cost efficiencies by providing a unified system that airlines, travel agents, and other players in the industry can use for booking an entire trip. It would include not only factors such as loyalty programs that affect the cost of a trip but also non-airline related services such as transportation and hotel accommodation.

Ticketing through tokenization

Legacy ticketing systems come with the risk of errors during the issue of the ticket as well as from system failures. They can use smart contracts to create a paperless ticket that includes built-in stipulations for additional criteria such as lounge access, first-class or business-class privileges, and other services. Since the tickets will be stored on the ledger, it eliminates the risk of chaos caused by events such as system crashes. Moreover, it can combine elements such as biometric identification to eliminate the need for customers to carry digital or paper tickets and identity documents.

Flight Records Systems Security

Events such as Aeroplane crashes or flight disappearance (like that of Flight 370 of Malaysian Airlines in 2014) are dependent on flight records for determining the cause of the accident or for tracking the path of the aircraft to find the wreckage or initiate search and rescue operations. Blockchain can help to collect and store all the data related to a specific flight, whether it is the manifests, flight path, baggage onboarding, or other factors. The data can be used for tasks of varying importance, whether it’s to track down the location of lost baggage or details such as the names of passengers on board the flight and their seat numbers. Since the information is stored securely on a centralized ledger in a remote location, there will be no danger of it going missing.

Maintenance Transparency

Delays are frequent during air travel, and they add to the overall costs due to passenger compensation expenses, hangar costs, and other overheads. In most cases, unforeseen maintenance is the primary cause of such delays. Several leading companies in the airline industry are already exploring the use of blockchain’s distributed ledger to make aircraft maintenance more transparent than it is. The technology can be used to track the fitness of individual parts of the aircraft by monitoring data such as date of manufacture, depreciation, and other maintenance-related features to gauge when a part needs replacement. When it is determined that parts need replacing sometime in the future, an order can be placed ahead of time with a reputable vendor, such as Pilot John International, who will then fulfill the order before the maintenance happens to reduce downtime for the aircraft.

Reducing Instances of Overbooking

Since empty seats result in a loss of revenue, airlines follow the practice of overbooking flights as a backup against last-minute cancellations, passengers arriving late for the flight, and other reasons that could cause them to fly under capacity. The outcome can be chaotic when the overbooked passengers have been forced off flights or refused to board, resulting in bad press for the airline. By using blockchain-based features such as tokenized ticketing and smart contracts, airlines can manage overbooking in a better manner to ensure that none of the parties suffers.

Airline Alliance Revenue Sharing

Currently, there are three major airline alliances worldwide, which calls for an efficient revenue-sharing model. While the alliance offers passengers the option of many connections, the algorithms used for revenue sharing are not reliable, resulting in inter-airline disputes and delayed flights. Blockchain presents the opportunity to create a unified system that uses predetermined criteria to share revenue immediately, thereby reducing overall costs and ensuring that flights are not delayed due to revenue-sharing disputes.

Streamlined Frequent Flyer Programs

While frequent flyer programs are aimed at capitalizing on customer loyalty, the loyalty programs of airlines vary significantly and have a lot of scope for improvement in terms of incentivization of customers. Blockchain provides customers with many more options for redeeming their accrued miles. Additionally, aspects such as revenue sharing, loyalty point redemption, and, accrual of points can be managed seamlessly with blockchain.