Can Blockchain Technology Improve Airline Security And Loyalty Programs
Airlines and airports have been settled on the same methods of collecting information and distribution for years, making it incredibly outdated and at risk for security threats. The industry needs to evolve with the rest of the world, especially considering that the last two decades have come with a 170% increase in travel outside of the United States via flight. Why not involve blockchain technology?
There have been many competitors that see the aviation industry and the advocates of blockchain see this time as an opportunity, above everything else. Blockchain could easily make the sharing of information exponentially easier and more accurate in airports, while communicating with other locations and passengers as well. The goal is simple – make the travel experience more seamless and simpler.
Lufthansa Industry Solutions seems to be behind this idea, considering that they launched a new initiative within their European home called Blockchain for Aviation (BC4A). They want to establish industry standards for blockchain to truly explore all of the ways that it can be applied. They are part of a partnership with a non-profit in Switzerland called Winding Tree, which wants to develop a decentralized network for travel for lowered costs on both providers and customers. This partnership also includes Air New Zealand, Eurowings, Austrian Airlines, and Brussels Airlines.
Each year, over three billion passengers travel by flight, making the aviation industry world well over $664.4 billion globally. To keep up with their needs, airlines need to focus on maintaining and consistent system with flexibility for the most efficiency.
Introduction Of Smart Contracts
Airports are filled with various requirements to collect data from the airlines, planes, pilots, passengers, and more. Every single piece of data collected has to be securely protected and stored for the various operations that occur in the airport, though the biggest issues arise when plans have to change spontaneously. Each system in the airport involves various types of software, so the concept of ensuring that everything is updated simultaneously is basically a pipe dream.
By using smart contracts, everything can be automated in a safe and seamless way. The customer’s experience remains without obstacle, and all systems remain updated on the latest changes without manually interacting with all of them. Even something as massive as a flight delay could quickly be accepted by the ledger, and the information could be distributed by every airline, flight, passenger, and employee that it could affect. That would be a dramatic change from the mess that one flight delay could presently cause.
Delayed Flights And Compensation
The leading technology specialist in airports right now is SITA, which already handles the flight delay information on blockchain, and is based on the Ethereum protocol. This makes it “a single source of truth for flight data.” Their permissioned blockchain is called Flightchain, and it has already been involved in millions of trials and flight changes around the world. Based on the current data they have found, it is possible that smart contracts could easily process the conflicting data. However, the main concern is that they will still require operational oversight and governance, to some degree.
Smart contracts are being used far beyond simple flight delays thought. AXA, based out of France, is using them as a way to compensate passengers that have to suffer with the frustration and monetary inconvenience of delayed flights. Customers have the subscribe to the service, but any delay beyond two hours is logged. Then, the customer receives their adequate compensation.
Russia has integrated smart contracts for their biggest domestic airline, using blockchain to issue tickets to passengers, and it is completely private. The Ethereum protocols are just another way that these airlines are using the existing technology and adapting it to their needs.
Along with the above locations, smart contracts and blockchain have also been used in Atlanta to provide flight options for flexible passengers.
Frequent Flyer Points And Digital Currency
Presently, there are two different airlines that have been using digital currency and blockchain as a type of rewards program – Delta Air Lines and Singapore Airlines.
Delta Air Lines is supposedly the first global carrier with this benefit. Their plan is to entirely do away with the loyalty program they currently have in place (SkyMiles), and instead migrate entirely to digital currency. The new tokens would be Ethereum-based and will be called “SkyMirage” tokens. This eliminates their use of American Express, though they get all the security benefits that crypto loyalty points provide.
Singapore’s approach is a little different, since they developed an app for a blockchain-based program. Users can voluntarily convert their mileage to digital assets, spending them at any Singapore Airlines merchant partner.
Most people that have checked their luggage at some point have ended up losing it, but blockchain could solve this issue too. There is a developing project in the industry right now that would let passengers keep an eye on their luggage during the transition from the airport’s front desk to their final destination. With this kind of tracking, filing an insurance claim on this baggage could be as easy as a simple modification in the smart contract.
Safety on-board a flight is of the utmost importance, and it also affords blockchain another opportunity to shine. Blockchain has already been used by retail stores and restaurants to track the flow of products, food, and parts that come through the company. Since airplanes undergo routine checks for safety, maintaining an automated ledger of any servicing performed could make every flight safer. Air France-KLM has already been experimenting with this type of application, though no other airlines have seemed to join in on this measure.
Continuing Efforts To Integrate Blockchain
As the industry dives further into all of the ways that secure ledgers can track information, it is clear that every single industry can benefit. Aeron, a blockchain startup, has even made an application that tracks the qualifications of pilots to reduce accidents. However, to truly reach its potential, these efforts by airlines and airports need to continue, developing blockchain to form a more widespread approach to aviation safety, security, and satisfaction.