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Blockchain in Aviation: looking for transparency in the transparent?

The blockchain does one thing: It replaces third-party trust with mathematical proof that something happened. — Adam Draper

Airplanes. Airports. Cities. Countries.

Being a young girl with a fueled imagination I used to think that there is some kind of magic, which leads those huge metal birds into the air.

Spending a summer vacays in motherland may become impossible for a diaspora kid growing up in another country without those special buildings with distinct and entangled metamorphoses going around in it.

Growing up, understanding that under “magic” there is a much more likely a constructive explanation I’ve started to look closer every time I’ve got an opportunity to came back to the airports always buzzing with noises, goodbyes and serious people in ties.

On my way of becoming older with a constant appearings in the buildings, I’ve started to notice much more ways of the improvement of this special place

Working in an IT company, involved in the progress of the blockchain technology for more than a year, I’ve started to wonder, how DLT can change the efficiency of the Airport and make the traveling for people even more transparent, safe and easy.

So, please, fasten your seatbelt, dear reader, we are going on an adventure in the future of aviation!

Saying NO to the Overbooking

When Dr. David Dao was forcibly removed from his seat and dragged off of a United Airlines flight in April 2017, it was easy to blame the three Chicago police officers who did it as the primary culprits. The video was horrific, and the three officers eventually lost their jobs later that year. But was it really their fault, or were they simply doing their jobs? After all, it was United Airlines that overbooked the flight, not the police officers. After the investigation, it was found that the ticket was overbooked by 4 passengers.

Smart contracts and tokenized tickets may help ensure that a truly fixed number of tickets are issued. Airlines will often sell an excess number of tickets, banking on late cancellations, passengers missing their flights, or any other number of possibilities that could result in a plane flying at less than capacity. An empty seat is lost revenue for the airline, but when everybody shows up, someone’s plans have to change. Currently, airlines can feign ignorance as to why or how the flight was overbooked, but with tokenized ticket-issuance systems, more advanced features like flight-delay insurance and ticket bidding can help ensure that all parties make out economically without the need to overbook a flight.

Companies willing to make a change:

Flight Records Systems Security

“What the aerospace industry doesn’t know about its planes is costing it serious money.”

When Malaysian Airlines Flight 370 disappeared in March 2014, it immediately became one of the greatest mysteries in aviation history. With 239 people on board, a bizarre change in the flight pattern, and still no indication of where the wreckage may actually be, countless friends and family members still don’t know what happened. Even though one of the men on board was an IBM executive, and another was an actor cast in Netflix’s Marco Polo, the lack of solid information surrounding the flight continues to astound.

In the wake of the disappearance, Malaysia’s official response was slammedas “inaccurate, or at least incomplete” by a Chinese media organization, and it’s difficult to argue with the assessment. The lack of details about where the flight was headed and where it may be is a prime example that better oversight systems for such critical information are still needed.

Data pertaining to a given flight — manifests, baggage onboarding, flight path, and the like — carry varying degrees of importance. Some information may save serious time and effort, like a tracking down a lost bag more efficiently. Other information — like who was on a flight, where they sat, and where the flight was headed — could be the key to solving mysteries in the unfortunate event that a flight doesn’t reach its destination. Regardless of a piece of information’s use or relative importance, securing all flight-related intel remotely on a blockchain backup record would be an added measure of security to the centralized systems of today.

Companies willing to make a change:
SITA, British Airways, Heathrow Airport — Partnered to create a blockchain-secured data sharing model — Flight Chain

Identity management

In the airline sector, forging identities of individuals comes with serious threats, including the possibility of terrorist activity at airports or on flights. The adoption of blockchain in aviation will eliminate the pain and hassle of passengers waiting for long hours to verify their documents.

Passenger details like biometric data, required documents, and the ticket will be stored on a blockchain network. People while entering the airport can enter the unique code, for verifying themselves. The airport authorities, who are a member of the network, will be able to enter the check-in details for passenger’s further references.

The introduction of smart contracts automates paper-based airline operations, allowing airport authorities to take up other roles. As a result of this, increased productivity, accuracy, and efficiency will be achieved.

Companies willing to make a change:

Vchain — a patented blockchain SaaS solution for digital identity management.

Baggage Tracking

Every baggage will comprise of a unique code, which will be encrypted and stored on a blockchain network. During the check-in process, the luggage will be scanned and the location of it will be updated to the system in real-time. Every detail about the baggage, ranging from its unique code to the current location, will be updated on the blockchain network. The authorities and passengers can easily locate their luggage, if gone missing.

Companies willing to make a change:

BagX — a neutral blockchain platform for baggage handling developed by a Swiss-port team. This will make the process completely documentable and transparent across all the involved stakeholders.

Maintenance Transparency

Whether you own one plane or an entire airline, aircraft maintenance is neither cheap nor easy. The average hangar cost is $275 per month, plus an additional $100 for tie downs. Annual inspections can cost as much as $1,200 for small aircraft, and far more for commercial airliners (which must be inspected far more frequently). Then there are factors such as gas and oil, part depreciation, and insurance to consider. Airliners have much steeper costs associated with them, an average of $1,430 in maintenance per flight hour. Supply chain costs related to aircraft maintenance accounted for 80% of direct maintenance spending in 2009, and is likely higher now.

We’ve all experienced the dreaded “creeping delay” at the airport. It seems to get longer and longer due to some unspecified maintenance issue. These delays cost countless amounts of money and are responsible for much of airline travel’s poor reputation. Between June 2015 and June 2016, more than 1 million flights were delayed, with those delays chewing up approximately 64 million minutes worth of their passengers’ time. About 50% of those delays are due to controllable factors, like aircraft maintenance.

Several industry leaders are in the works developing systems by which maintenance issues can be more easily foreseen and dealt with using blockchain distributed ledger technology. Tracing individual parts to gauge their fitness for flight and anticipate declines in their quality is one use of the technology, as is providing a more connected record for maintenance-related departments to rely upon. These uses could cut down on the one thing that gives airlines and passengers the most consistent trouble: delays.

Companies willing to make a change:

  • Accenture — Prototype for aviation manufacturing and parts provenance.
  • Aeron — Better data traceability and management for aviation firms.
  • Lufthansa — Launched blockchain innovation challenge to tackle transparency issues.
  • 500labs — a decentralized data network for the global aviation industry to mitigate the effects of flight delays, among other things.

Airline Alliance Revenue Sharing

The first airline alliance was established over 21 years ago, and while the nature of revenue sharing between partnered airlines has evolved over the years, it remains an integral part of the commercial aviation sector. Today, there are three major airline alliances: Star Alliance, SkyTeam, and Oneworld.

Star Alliance was founded by member airlines United, Scandinavian, Thai, Lufthansa, and Air Canada, and has expanded to a roster of 27 airlines, covering 18,800 daily flights to 1,300 destinations across 193 countries. SkyTeam is the newest of the alliances, founded in 2000 by Delta, Aeromexico, Air France, and Korea Air, totaling 20 members with a reach not far off of Star’s. Last but not least, Oneworld, founded by American Airlines, British Airways, Qantas, Cathay Pacific, and Canadian Airlines, teamed up in 1999 to provide a more intelligent revenue-sharing model and greater array of connection options for passengers of its airlines. These alliances have necessitated revenue-sharing algorithms, but they remain flawed. They lack measures to prevent inter-airline squabbles and time delays that defeat the purpose of cooperation among member airlines.

Cooperation among airlines can make sense economically, especially in terms of the less quantifiable PR aspect. When a flight is cancelled or international connections run thin, the ability to tap into partner airlines to accommodate passengers is invaluable, both in terms of preserving revenue for the airline and ensuring that passengers don’t miss critical plans or meetings. That said, revenue sharing systems remain complex and fragmented. The ability to rely upon a unified system that could use algorithms to immediately settle predetermined revenue shares among cooperating airlines would reduce costs, improve timeliness, and result in more customers reaching their destinations in a reasonably timely manner.

Streamlined Frequent Flyer Programs

Many airlines have frequent flyer programs (FFPs) that allow airlines customers to accumulate points which can then be redeemed for air travel. Member of loyalty programs that travel with a partner airline may want to have their points or miles reconciled at their customer account which can be a time-consuming and error prone process.

One way that airlines could take better advantage of customer loyalty is to merge alliance member airlines to provide a more appealing frequent flyer package. This would foster a greater likelihood that passengers would actually redeem their accrued miles, therefore being incentivized to earn them in the first place. With a wider array of airlines to choose from, frequent flyer programs could become more appealing than they already are, and the blockchain could serve as a platform to seamlessly integrate revenue sharing and automated point redemption in a cost-effective manner.

Companies willing to make a change:

  • Singapore Airlines — Tokenizing frequent flyer programs.
  • Loyyal — Smart contract based loyalty solutions
  • Sweetbridge: a virtual blockchain-based marketplace with a scalable solution for multi-vendor loyalty programs.

Multi-Tier Oversight in Private and Commercial Flights

Fortunately, flight, and commercial aviation especially, has become a safe proposition. According to many metrics, 2017 was the safest year in the history of commercial air travel. When hijackings, suicide, and sabotage are accounted for, 59 people died worldwide as a result of commercial aircraft accidents or malfunctions, which is a modest number considering the sheer volume of daily flights spanning the world.

However, these statistics, though low, cannot be assessed lightly — each life is a life, after all. No story brings that fact to life quite like the case of the Brazilian Chapecoense soccer team, who were on their way to an unlikely championship match when their plane crashed into a mountainside in Medellin, Colombia, killing 71 of the 77 passengers. The pilot had chosen not to refuel in an effort to save money — precisely the sort of decision that should be taken out of the hands of humans with an inordinate financial stake in such choices.

One of blockchain technology’s primary benefits is the ability for several parties to access the ledger, regardless of their location. This decentralized facet could set in place a system of checks and balances that would regulate pilots and owners of private airlines, who may otherwise be tempted to cut corners in order to save money. Whether this involves regulatory agencies, specific airports, or organizations will be determined on a case-by-case basis, but if blockchain can help prevent another Chapecoense, it is a cause well worth pursuing.

Companies willing to make a change:

  • Avinoc — a freely available, transparent database for the coordination of private business flights — without a third party intermediary.
  • 14bls — Supply Tracking a blockchain technology that allows the supply chain of aircraft components to be documented thoroughly and with absolute transparency.
  • Sorablocks — a blockchain-based platform for the aviation industry, which brings transparency to the management of kerosene across all airlines and airports.
  • Skyy network — a blockchain-based solution that consolidates the aviation management of drones in a decentralized and clearly regulated system, enabling the rule-based and automated operations of drones.

I would like to conclude with the stress of your attention to the research made by IATA (The International Air Transport Association). The documentexplores blockchain, its potential, and the challenges, though the focus is on public blockchains. It outlines a substantial vision in both breadth and depth.

Reference:

https://www.disruptordaily.com/blockchain-use-cases-aviation/

https://blockchain-x.eu/wp-content/uploads/2018/02/flightchain-whitepaper.pdf

https://hackernoon.com/5-global-domains-that-will-transform-blockchain-in-aviation-by-2025-2j1cx3v08

https://www2.deloitte.com/content/dam/Deloitte/ie/Documents/Tax/ie-blockchain-a-game-changer-in-aircraft-leasing.pdf

https://www.bbntimes.com/en/technology/blockchain-in-the-aviation-industry

https://www.ledgerinsights.com/sita-blockchain-changing-air-industry/

https://www.pwc.com/gx/en/aerospace-defence/assets/data-for-the-life-of-the-aircraft.pdf

https://www.pwc.com/gx/en/industries/aerospace-defence/publications/blockchain-in-aerospace.html

https://www.asiablockchainreview.com/blockchain-effect-on-sea-aviation/

https://www.iata.org/publications/Pages/blockchain.aspx

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