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 crucial 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 immediately thinks of cryptocurrency like bitcoin. 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 the blockchain (which lies in safe record-keeping) can help change 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 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 no governing authority or a single person is 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, no one can implement any alteration in the system without notifying others in the blockchain network.
- Enhanced security: Using encryption in blockchain adds a solid security blanket to the system. Blockchain uses cryptography – a mathematical algorithm that acts as a firewall against attacks – to add another level of protection for the users. Every piece of 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 can do! 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%, the highest CAGR during the forecast period. North America is the most advanced region in adopting new technologies and infrastructure. Increasing the adoption rate of blockchain in air transportation is one of the significant factors impacting the growth rate of this region.
Blockchain Use Cases In The Airlines Industry
Aviation records securityDid 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 in finding 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 to record the location of valuable assets in a real-time and 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 security measure to today’s breach-friendly centralized systems. It will also ensure transparency and a streamlined process throughout.
- Aviation maintenance
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. We have all experienced delays at the airport due to maintenance issues. These delays lead to a bad reputation and result in the loss of countless dollars. 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 an impressive extent that continuous ledger updates will improve efficiency and boost utilization.
- Blockchain can also help in predictive maintenance and exterminate the challenges before affecting necessary airline operations.
- MRO service providers can also use blockchain and provide verifiable documentation for the components 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, the storage of smart tickets on a blockchain could help mitigate or 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!
- 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 sectors such as transportation and hotels. All the initiatives 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!
- Fantastic customer experience: There is 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 those travel agents or other intermediaries control 99% of the market for indirect ticket sales? Astonishing, isn’t it? Blockchain for the aviation market can help drive a much-required change. Blockchain can help by reducing these third-party costs and increasing revenues among the network members.
- Improving ground operations: Blockchain enhances tracking, tracing, and transparency in operations, transactions, price, 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 sector; and, simultaneously, calls for radical optimization! You have been introduced to 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! Although the world doesn’t understand the unlimited potential of blockchain technology, it is undoubtedly 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 with a blockchain development agency by their side and ready for other digital technologies to fundamentally rethink how they do business will gain the most significant benefits.