How Airlines Can Save Millions with Blockchain
We do not have one industry where blockchain technology has not crawled its way into, but the question remains: is the aviation industry making the most of it? Did you know that blockchain technology in the airline industry is the key element in creating a seamless travel experience?
I can imagine a question popping in your head: ‘What can blockchain do?’ Generally when one thinks of blockchain, one thinks of cryptocurrency like bitcoin immediately. But, we have very little knowledge about blockchain and its potential to transform the airline industry. Let’s deep dive into how the concept of blockchain (which lies in safe record keeping) can help transform the aviation sector.
Its fundamental and most important characteristic is that it is secure and next to impossible to tamper with. Hence any industry such as aviation itself, that relies highly on data integrity could take great advantage of the latest blockchain technology trends.
Let’s recollect some of the blockchain’s basic features.
- Decentralized: Blockchain is decentralized which means there is no governing authority or a single person looking after the framework. In other words, you can store anything from cryptocurrencies, important documents to valuable digital assets without the need to include an intermediary or even in the absence of a governing authority.
- Immutability: Immutability refers to something that can’t be modified or altered. Since it is unbreachable in nature no one can implement any alteration in the system without notifying others in the blockchain network.
- Enhanced security: Using encryption in blockchain adds a very strong blanket of security to the system. Blockchain uses cryptography – a mathematical algorithm which acts as a firewall against attacks – to add another level of protection for the users. Each and every information present on the blockchain is hidden cryptographically. So, it is safe to say that the information on the network hides the true nature of the data.
Enough said! Now that we know what blockchain can do, we can move forward with what blockchain in aerospace is capable of doing! Blockchain technology without a doubt, is the next big thing in aviation. Here are some numbers proving it
Key Statistics Of Blockchain In The Aviation Industry
- According to Markets and Markets, blockchain in airlines is projected to grow from USD 421 million in 2019 to USD 1,394 million by 2025, at a CAGR of 22.1% during the forecast period.
- The aviation blockchain market in North America is projected to grow at 25.2%, being the highest CAGR during the forecast period. North America is the most advanced region in terms of adopting new technologies and infrastructure. Increasing the rate of adoption of blockchain in air transportation is one of the major factors impacting the growth rate of this region.
Blockchain Use Cases In The Airlines Industry
1. Aviation records security
Did you know that the greatest mystery in the airline industry is the Malaysian Airlines flight 370 that disappeared in March 2014? There was a lack of detail about why there was a bizarre change in the flight pattern and where the flight was headed. Millions of dollars were invested to find out the details of flight MH370 but nothing was accomplished per se. This mishappening is a fitting example that a better oversight system is required for such critical information. We already know that blockchain is known for its tracking and transparency capabilities, so here is what blockchain in aviation security can do:
Blockchain can be used for recording the location of valuable assets in real-time and in a reliable manner. Information like flight path, baggage onboarding, tracking down a lost entity, passenger details, etc can come in handy during unfortunate times. all flight-related intel remotely on a blockchain backup record could be an added measure of security to today’s breach-friendly centralized systems. It will also ensure transparency and a streamlined process throughout.
2. Aviation maintenance
We have all experienced delays at the airport due to maintenance issues. These delays not just lead to a bad reputation but also result in the loss of countless dollars. The global Maintenance, Repair and Overhaul (MRO) market was valued at $69 billion but it is estimated to reach $103 billion in 2028 with a 4.1% increase per annum. Here is how blockchain can help aviation maintenance save millions of dollars:
- Blockchain can continuously update the logs for each part’s condition of an airplane. This will help reduce the time consumed on routine inspection and maintenance of the plane.
- The science behind ledger technology has matured to such an impressive extent that continuous ledger updation will lead to improved efficiency and also boosts utilization.
- Blockchain can also help in predictive maintenance and exterminate the challenges before they affect necessary airline operations.
- MRO service providers can also use blockchain and provide verifiable documentation for the components that they have serviced or installed.
- The theoretical concept of smart tickets can be brought to life with the help of blockchain technology. This will not only eliminate the use of paper tickets but could also be used as access to the airport lounge, accommodations, etc.
- Additionally, storage of smart tickets on a blockchain could help mitigate or completely eliminate the effects of the chaos that accompanies the crash of an airline’s or entire airport’s centralized ticketing database. Such asset tokenization will also evolve the booking system by eliminating the need for alternate forms of identification. We can conclude that the blockchain infrastructure for the aviation industry will be a game-changer!
4. Seamless digital travel experience
- Fragmentation usually results in a bad customer experience. Inefficiency is a cost that the entire travel industry has to bear. Since consumers like to save a few nickels here and there, as a result, companies that organize travel bookings can be liable for as much as $269,000 in fragmentation costs.
- Blockchain technology in the aviation industry has the capability to unify systems for various industries like airlines and other travel industries like ticketing, loyalty programs, and non-airline logistical industries such as transportation and hotels. All the industries related to travel could use some streamlining to create a seamless experience and better customer satisfaction.
Now that we have discussed all that blockchain can do for air travel let’s discuss some benefits, shall we?
Blockchain Benefits For The Aviation Market
- Smoother payment processes: With the help of blockchain many repetitive processes can be automated such as purchasing travel insurance, loyalty settlements, paying authority taxes and fees, etc. Even the payment process will be more secure and efficient than ever!
- Amazing customer experience: There is absolutely no denying the fact that blockchain technology for airports will improve the rate of customer satisfaction. The processes will be simplified and the risk of error minimized.
- Reducing dependency on third parties: Did you know that travel agents or other intermediaries control 99% of the market for indirect ticket sales? Astonishing, isn’t it? Well, blockchain for the aviation market can help in driving a much-required change. Blockchain can help by reducing these third-party costs and can increase revenues among the network members.
- Improving ground operations: Blockchain enhances tracking, tracing, and transparency in operations, transactions, cost, and revenue. The complexity is decreased and all the processes become simpler and more efficient.
It’s a wrap!
Aviation is both, the most regulated sectors; and simultaneously, the one that calls for radical optimization! You have been introduced with one of the best solutions that can save airlines millions of dollars and at the same time increase the rate of customer satisfaction. So what are you waiting for? Hire a blockchain development company now!
To summarise it all, although the world doesn’t understand the complete potential of blockchain technology, it is certainly the tool to revolutionize the airline sector. I can’t help but wonder how amazing it would be to combine blockchain with other technologies like the internet of things and artificial intelligence in the aviation industry.
Mark my words, forward-looking airlines that have a blockchain development agency by their side and are ready for other digital technologies to fundamentally rethink how they do business will gain the greatest benefits.