At IATA (The International Air Transport Association) I have the privilege of being surrounded by the latest aviation news from across the industry. Last fall we put out a post in our online magazine outlining how blockchain technology could completely revolutionize aviation's value chain. The fact that a distributed ledger could cut out middlemen, such as banks who are currently pocketing $7.7 billion, is intriguing to many working in the business. Especially since that figure is equivalent to 20% of the entire industry's yearly net profit.
The article generated a lot of buzz and widened the discussion to areas outside of the aviation economy as well. "Apart from reducing the cost, other benefits include far greater speed, resilience, and protection from fraud" said Aleks Popovich, IATA Senior Vice President of Financial and Distribution Services.
Following these remarks, IATA's Communications team began producing an infographic video that outlined some of the other big news surrounding blockchain technology in the aviation industry. The video was released yesterday, and what follows is an in depth look at the articles referenced in the video and what it means for both the Aviation and blockchain world.
Watch the video now!
One of the most exciting pieces of news showcased in the video, is that Air France KLM is experimenting with blockchain for tangible use cases such as aircraft maintenance. Not only does a huge name like Air France KLM carry serious weight, but the fact that they are already applying it to existing workflows is simply exhilarating. The article goes on to explain how the engineers at the MRO Lab have even been holding talks with Microsoft, concluding that the digital distributed ledgers are “ideal” for recording and managing parts for in-service planes. (Note: Microsoft were in the news recently themselves, when they announced they were working on blockchain based ID systems for their computer devices and even more recently when they helped release a blockchain-based investment product.) This attempt to cut through the hype, and target real world applications comes refreshingly at a time when companies are tossing around the word blockchain to simply raise their stock prices.
A hallmark of the aviation industry is its interconnectedness. Airplanes must communicate with airport towers which communicate with ground handlers, and on goes this cascade of interlinked communication. All of this while passengers, flight tracking apps and flight boards display different times and statuses for the same flights. Enter British Airways, Heathrow Airport and SITA (An IT company providing telecommunication services to the air transport industry) who are trying to solve the issue of information sharing using blockchain.
"Precision information syncing promises to ensure that all parties involved have the same, trusted information" says Kevin O'Sullivan, lead engineer of SITA Labs. While their partnership on this exciting opportunity is still only in a trial phase, the results are already confirming a proof of concept, meaning wider implementation is likely a matter of time.
What about use cases for cryptocurrencies that I know and love, you ask? Russia's S7 airlines has your answer. They began selling tickets on the Ethereum Blockchain in December. While you cannot yet buy the actual tickets with the cryptocurrency, the underlying tech is clearly there, and the country has a strong bond with blockchain. Indeed, earlier last year Ethereum founder Vitalik Butrin met with Russian President Vladimir Putin. A couple months later a Russian bank struck a deal with Vitalik to create Ethereum Russia, a state-owned Bank for Blockchain Development and training.
Even the companies waiting on the sidelines are quietly preparing for a blockchain dominated world. GE, the aircraft engine manufacturer and Accenture both have blockchain based patents filed, with the former also working on smart contracts and the latter predicting that blockchain will disrupt the aviation industry within 2 years from June 2017.
However, it is not all fine and dandy in the Crypto space, as there seem to be concerns over individuals trying to profit from the hype. Recently an ERC20 token called Aeron was released by a couple pilot/aviation enthusiasts. While the aim to make flying safer looks good as their tagline, a deeper dive into the white paper raises suspicions. The document heavily references one of the cofounders previous startups aimed at teaching piloting, to the point that it feels like a full on advertisement. Whether intended as such or not, the project screams pump and dump scam and one is best advised to stay clear away from such projects.
While there are some concerns about blockchain technology entering the aviation sphere, there is one thing that everyone seems to universally agree on; the technology has massive potential. The aviation industry lives by a safety-first mantra, and so taking on unnecessary risk is the last thing on their wish list. In the long run however, adopting Blockchain tech not only looks beneficial, but in staying competitive, may even prove necessary!
Image Sources: Cointelegraph, Getty images.