It’s being hailed as the next big innovation after the internet but public perception about blockchain technology is far from clear-yet. It can be described as a decentralized digital ledger that is immune to forging. This technology is used to deal with cryptocurrency and unregulated digital transactions. The importance of blockchain has been understood by many industries across the world and some of these have started experimenting with it as well. Apart from sectors like healthcare, education, travel and banking, the aviation industry is also sneaking into the potential of using blockchain to reap the benefits.
Why use blockchain tech in aviation sector?
As a matter of fact, aviation is one of the sectors that have embraced internet and digital technologies in a massive way. This has happened a bit slowly- owing to the stringent norms and safety regulations pervading the sector. From online flight ticket booking to apps for managing rewards schemes -the aviation sector entities have been quick to adapt to technological changes. Several airlines and aviation companies have also started using AI technology.
The aerospace sector is gigantic in terms of operations. Every day, thousands of flights are flying between various countries and contents- carrying millions of people. It also lets the govts of various countries carry out surveillance and military operations across the sky. The aviation sector includes plenty of entities and companies including so many airlines, airports, logistics companies etc. They also have tie up with numerous travel agencies, hotels and rental cab service provdiers. So, these operations involve generation, sharing and handling of a mammoth amount of data per day. Human errors and syncing issues between various entities can crop up and those may cost the involved entities dearly. Theft or leakage of customer data can also take place at times and that can have serious repercussions on the entities in this sector. Using blockchain technology can be helpful in addressing inherent operational flaws of the aviation sector. From cutting down operational expenses to minimizing booking errors and getting insight on maintenance of aircrafts, the benefits of deploying blockchain in aviation sector are numerous.
As it is, the aviation sector bigwigs are not blind to the prospects of embracing block chain tech for their operations. A report by Accenture reveals more than 80% of aerospace companies plan to embed blockchain into their systems by 2021. Deloitte, a noted international management consultancy, has published a report that says blockchain networks can be used in numerous ways in the aviation sector.
How blockchain incorporation can benefit the aviation industry
- Enhancing trust in supply chain- According to Accenture, the decentralized and immutable nature of blockchain instills a sense of security in any sector it is deployed and aerospace should not be an exception. The aviation sector relies a lot of supply chain system for day to day operations. From the OEMs to suppliers, third party aftermarket integrators and airlines can access shared data without worrying about risk of tampering or theft. Blockchain can be used to links some loose ends in the supply chain network used in this sector. The airlines, airports and related entities will be able to access data from a single source and safety and integrity of the data will not be a problem.
- Better management of loyalty programs/schemes- For those who fly a lot, the loyalty programs and schemes offered by various airlines are very enticing and they usually do not want to miss out the various benefits of such programs. From getting complimentary beverages and snacks in flights to getting upgrades from economy to business class and discounts on flight tickets, the rewards are aplenty. However, managing the loyalty programs can be tedious for the airlines-owing to the gargantuan data generated and verification woes. When blockchain is deployed to book aviation loyalty programs- verification of customer data and status of claims becomes faster and quicker. The deserving customers are rewarded eventually. This also leads to better customer experience.
- Leasing and sharing made easy through smart contracts-In the aviation sector leasing and sharing of assets and resources is pretty commonplace. Airlines often share tangible and intangible assets with each other and they also lease spare parts to third party entities at times. Managing these contracts can be tedious and risks of errors also exist. The situation can get really complex for airlines that operate in multiple routes across the continents. However, blockchain can be a savior for these airlines and the associated entities. Deloitte thinks using blockchain based smart contracts make things simpler for such entities. It will cut down complexity involved and eliminate the risk of human errors. The smart contracts, when deployed automate and smoothen the procedure of leasing aircrafts and other assets.
- Enhancing quality of aircraft maintenance- Maintaining and repairing the aircrafts properly is crucial to survival for any airlines. From performing routine maintenance to checking flying ability and carrying out repairs after minor landing issues or bird hits –the maintenance of aircrafts involve so many things. Usually, most of these take place after an issue or problem is identified. If the technicians could access record and data of each aircraft instantly –they could resort to predictive maintenance. These would be helpful in evading many problems in these cases. By deploying blockchain technology this can be made possible.
- Aiding air force/airlines recruitment- In aviation sector, plenty of recruitments take place over the years. From pilots, cabin crews to ground staffs, the airlines and airports have to recruit thousands of employees for their daily operations. During such aviation recruitment, validating applicant data and safe storage of that data is necessary. While the incorporation of cloud technologies and software solutions have helped things, using blockchain can enhance the efficiency involved in such recruitment stages. Blockchain based data cannot be tampered in the background by any entity. When the employees of an airlines or airport apply at another company in the sector, verifying background and work experience will be much easier and faster as well.
- Safety of flyer data- The airlines have to deal with gargantuan amounts of passengers data every day. Millions of people are flying to different destinations each day of the year. Storing customer data safely can be tedious for the airlines and related entities. While they have their software solutions and cloud services- these are not exactly hacking and fail proof in nature. Using blockchain technology to store customer data is a better solution for the airlines. Blockchain does not store data in a single or centralized server and so the data remains hacking proof-nearly. This is applicable about the financial transaction data as well.
- Better cargo management- Airlines have to carry a whopping amount of flyer luggage all over the year. Despite the improvements in logistics and related technology, instances of luggage loss and theft still take place at the airports. Those who take connecting international flights face these hassles more, as it is. By using blockchain tech, every piece of luggage put on a plane can be recorded and tracked digitally. This helps in taking load off the airport and airline staffs and the passengers also get benefitted.
How blockchain adoption in aviation sector is progressing
As a matter of fact, a section of players in the aviation sector have already started deploying blockchain technology in various ways and the results look promising.
Two giants known for making aircrafts and engines, namely Airbus and Rolls-Royce are planning to deploy blockchain in their operations. Airbus, in fact has set up a dedicated unit to find out how blockchain can be used to address existing and upcoming business challenges in its supply chain.
A number of prominent airlines have warmed up to blockchain and crypto currency and more are expected to follow suit. Big players like British Airways, Lufthansa, and Air New Zealand are now working with some blockchain startups these days.
Air France is likely to deploy blockchain to tweak its maintenance activities. Norwegian airlines has come up with NBX-its own crypto exchange-setting a new precedent in the sector. Soon, its customers will be able to book flights using crypto currency. Singapore airlines has already integrated blockchain tech in its loyalty app.
It is only a matter of time before more airlines start deploying blockchain tech and in near future using crypto currency to book domestic flights will be a reality! However, the aviation laws and lack of regulation in crypto sector may delay widespread adoption- feel the experts.