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How Blockchain Technology Can Improve the Airline Industry

Last Updated March 4, 2021 4:53 PM
Lester Coleman
Last Updated March 4, 2021 4:53 PM

The airline industry – a data intensive industry with complex procedures and requirements – has much to gain from blockchain technology, an analysis from consulting firm Accenture reveals.

Using cryptographic techniques and a distributed messaging protocol, a blockchain provides shared ledgers that decentralize reconciliation-based processes.

Blockchain technologies differ from traditional technologies in that they are durable, consistent, shared and mutualized.

Multiple Players And Touchpoints

The airlines – and much of the travel industry – rely on multiple actors and touchpoints. From booking to arrival, players include online travel platforms, government agencies, airlines, card providers, airports, car rental agencies, hotels and more.

Each actor collects, stores and often shares operational information. Complex data reconciliation takes place behind the scenes at every touchpoint of every traveler’s trip.

With multiple systems in play—airlines alone house data in numerous siloed systems from passenger service to crew management—data exchange can be choppy. For airlines, operational integrity and revenue generation are at stake when something goes wrong, as well as safety and security.

Blockchain technology can enhance reconciliation and data sharing.

Numerous Disruptive Possibilities

The most disruptive blockchain possibilities for airlinies extend beyond financial transactions. Consider the following:

• Ticketing. An e-ticket is a database entry—information to be called up from a database. The blockchain can tokenize this asset. Through the use of a smart contract, an airline can add business logic and terms and conditions for how a ticket is sold and used. This enables tickets to be sold by different partners, in real time, from any location.

• Loyalty. In traditional loyalty points schemes, travelers typically have to wait for points to settle and accrue in order to use them. They are then limited on where they can spend them. By tokenizing loyalty points on a blockchain, travelers get immediate value by redeeming the points. They can also use them more broadly through a user community. With points accepted as “currency” among more providers, travelers have a faster and easier program that is better suited to their personal preferences.

• Security and identity. Data privacy is a critical issue for passenger records, flight manifests and crew information. There are also security implications if this data is not properly protected. Blockchain technology creates a safer way to manage and share this information through authorized access requirements.

• Maintenance. Blockchain technology can move maintenance logs out of cumbersome databases and paper binders. It can ensure that parts procured are legitimate and can provide a “virtual copy” immutable record of the provenance of each part on the plane, every time it has been handled and by whom. This visibility can take maintenance, safety and security to new levels.

Also read: Streamlining travel with blockchain identity verification

Unlocking The Blockchain

The best way to assess blockchain viability for data management is by considering the following questions:

• Multiple validation and control points. Are there many such points?
• Multiple actors. How many actors consume the data?
• Reconciliation. Must the data be reconciled?
• Auditability. Is visibility into the full chain of custody mandatory?
• Data quality and lineage. Must data lineage and quality be tracked?

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