Curious to learn how blockchain can revamp the entire airline industry? You have landed on the right page. In this article, we will discuss the potential that blockchain holds in transforming the airline sector and the challenges that need to be overcome.
Table of Contents
- Blockchain- More Than A Cryptocurrency
- Blockchain Possibilities Take Flights
- Challenges to Consider
- Concluding Lines
The aerospace industry is broad, complicated, and interconnected, and with each passing day, demand for new commercial aircraft is rising.
There are various technologies, including blockchain, that are playing a crucial role in transforming airline industries. Technocrats and blockchain developers are considering this technology as a revolutionary change and therefore experimenting with blockchain for a variety of use cases.
In the IATA study “Future of the Airline Industry 2035,” this distributed ledger technology has been identified as one of the futuristic technologies that may revamp the entire aviation industry. Blockchain, with its unique characteristics, can serve as a powerful tool for the industry’s development.
Blockchain- More Than a Cryptocurrency
Gone are the days when blockchain was recognized only for cryptocurrencies, and today, it holds an exceptional position in all domains.
Blockchain is a P2P, decentralized distributed ledger technology that elegantly transfers and tokenizes value and operates without involving any third-party/intermediary. It has the capability to transform almost every sector of the industries, including finance, manufacturing, supply chain management, digital identity, airlines, and much more. It is believed that blockchain can transform travel journeys with real-time travel experiences without compromising security. Technology can be seen as a security wrapper that can entirely create a different and risk-free way of managing and sharing information related to airlines through authorized access requirements.
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Blockchain Possibilities Take Flights
Without further delay, let’s explore the use cases of blockchain in the airline industry.
- Blockchain is known for its tracking and transparency capabilities. In airlines, it can track the location of valuable assets in real-time in a reliable manner, and ensure visibility and transparency across the chain. It can streamline the entire airline process and help providers to unlock new product development areas without involving any third party.
- Blockchain helps in seamlessly storing documentation from manufacturers to airlines to MRO service providers, which indicates that the complete maintenance cycle of a single component can be examined and verified in its totality. MRO service providers can use blockchain for providing verifiable documentation about the components they have installed.
- Blockchain in identity management is one of the hyped topics that is gaining public attention. In the airline industry, smart contracts can help maintain the identity of crew members and passengers in a truly independent way. Since technology follows a decentralized approach for identity management, it can abolish current identity issues such as inaccessibility, data insecurity, fraudulent identities, among others.
- Due to its decentralized and distributed nature, in the airline domain, blockchain allows travel agents across the distribution space to better cooperate while delivering travel products and services globally. Moreover, it can move payments faster, along with maintaining complete transparency and lower costing.
- Blockchain can help improve routine efficiency by continuously updating the ledger of each part’s condition, which in turn, could reduce time consumed on routine inspection and maintenance, which finally boosts utilization. Moreover, it can help in predictive maintenance and eradicate the issues before they affect complex necessary airline operations.
- Blockchain offers real-time configuration and maintenance data that could allow manufacturers to predict the condition, and usage, and tailor their production processes to make sure spares are available on time that helps in improving their services for their prestigious customers.
Challenges to Consider
Blockchain goes well in all domains where there is a need to build trust between multiple parties. The aviation industry is no more an exception. But it has various challenges associated with it.
- Blockchains have a decentralized system whose structure limits them from achieving high transaction speed levels, and therefore, scalability is one of the major concerns that has not been resolved by the leading decentralized platforms, which in turn is a worrying concern for blockchain developers.
- High transactional cost and volatility is the other reason why blockchain mainstream adoption has not happened until now.
- Although its governance structure is improving, it is still not mature. There are certain uncertainties that prevail when forking takes place.
- To implement complex mathematical calculations, blockchain requires a lot of energy consumption just to ensure there is a secure and tamperproof consensus.
From the above discussion, it is clear that blockchain holds great opportunities for securing and managing data; thus, it can be implemented to airline industries for good. There are various project initiatives across the travel industries that are leveraging blockchain technology such as Aeron, Loyyal, SITA FlightChain, Ozone, etc., to streamline the entire airline process.