Blockchain in Aviation Industry

The aviation sector, according to experts, is a natural match for blockchain networks, providing an incorruptible, digitized, and extremely efficient means of tracking components and supplies, among other things. Is blockchain merely a jargon, or can it genuinely deliver practical benefits to the aviation industry?

 

Although it has been dubbed the "greatest breakthrough since the creation of the Internet," the majority of people today have little to no understanding of blockchain technology - and for good reason.

 

When specialists discuss blockchain technology, they use terminology like decentralization, nodes, and distributed messaging protocol; the list of technical terms goes on and on, most of which are difficult for the common person to understand.

 

 

What is the Aviation Industry?

 

The term "aviation" is most generally used to denote mechanical air transportation performed by airplanes. Airplanes and helicopters are the two most common forms of aircraft, however most current definitions of the term "aviation" include the usage of unmanned aircraft, such as drones.

 

Keeping this in mind, the aviation sector may be defined as all that surrounds these operations. Although the phrases 'aviation industry' and 'airline industry' are commonly used interchangeably, they really denote separate concepts. 

 

An airline is a company that provides air transportation services for passengers or freight, and the airline industry is the collective name for these businesses.

 

However, the airline business is only one component of the larger aviation sector. Aside from airlines, the aviation sector comprises aircraft manufacturers, researchers, air safety specialists, military aviation enterprises, and, increasingly, companies that develop, manufacture, and/or utilize drones.

 

The contemporary aviation industry's importance is impossible to overestimate, but one of the key reasons for its importance is the industry's globalized character, which helps to link various continents, countries, and cultures. As a result, global aviation has played an important role in promoting efficient travel to faraway locations, enhancing many lives.

 

Also Read | Drone Technology: Working and Uses

 

Role of Blockchain in Aviation Industry

 

The aviation sector is always evolving and adapting to include new technology. Over the last few decades, there have been significant advancements  in innovation. However, new technology brings new risks. Cybersecurity and customer experience are two of the most pressing issues in the airline sector. 

 

Blockchain technology in aviation can aid in the safety and strengthening of all three. It is characterized as a novel method of capturing and encrypting information that makes hacking exceedingly difficult, if not impossible.

 

The first major issue is cybersecurity. Controller-pilot data connection communications are among the new technologies in cockpit communications (CPDLC). CPDLC is advantageous because it improves ATC surveillance and communication. 

 

As a result, the probability of a mid-air collision is considerably reduced, as is the number of non-essential communications on radio channels. They are, however, unprotected.

 

Other security risks stem from online flight department management. Digital blockchain papers, remote systems, scheduling, cloud-based information, and more. All of them are necessary for the aviation industry, yet they are exceedingly easy to hack and manipulate.

 

The additional degrees of encryption and security provided by blockchain implementation would be immensely advantageous to the safeguarding of critical information. It would solve the majority, if not all, of the security issues in the aviation cyber world. Aviation has yet to use blockchain technology. Many airlines, though, are testing it.

 

Smart contracts, which may self-execute depending on specified criteria, are one of the blockchain technologies gaining traction in the aviation industry. 

 

They can be used to manage a wide range of repetitious procedures, such as billing between multiple airlines and travel agencies, settling loyalty points or rewards, purchasing travel insurance, and paying airport fees, taxes, and other costs.

 

Similarly, smart contracts can be used in other processes such as customer experience management, revenue accounting and payment reconciliation simplification, tracking of aircraft components, baggage, or shipments, and reducing reliance on intermediaries by providing customers direct access to ticketing and other airline offers, among other things.

 

Also Read | How Blockchain can be used in Tourism

 

Functions of Blockchain in Aviation Industry

 

We’ve listed some of the ways in which Blockchain can be used in the aviation industry :- 

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Functions of Blockchain In Aviation Industry

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1. Identity Administration

 

Forging identities of persons poses severe risks in the aviation industry, including the possibility of terrorist activities at airports or on flights. Biometrics may be used to validate identities on blockchain. 

 

Furthermore, once verified, the identity is recorded on the blockchain, where it cannot be changed owing to the network's decentralized and secure nature. Aside from decreasing human mistakes during the identity document verification process, blockchain might eventually lead to biometric identification replacing paper passports.

 

2. Improving Digital Travel Systems

 

All airlines incur inefficiencies due to fragmentation costs. They develop as a result of price discrepancies from extra features like upgrades and premium services, as well as users switching to alternative providers or operators to save money. 

 

Blockchain technology provides a potential to simplify these cost reductions by offering a uniform system for booking a whole trip that airlines, travel agencies, and other industry participants can utilize. 

 

It would cover non-airline related services like transportation and hotel accommodations, as well as elements such as loyalty programs that impact the cost of a trip.

 

3. Ticketing using tokenization

 

Legacy ticketing systems are vulnerable to mistakes during ticket issuance as well as system outages. Smart tickets powered by blockchain are still a speculative notion. 

 

They can, however, employ smart contracts to generate a paperless ticket with built-in specifications for extra criteria such as lounge access, first-class or business-class privileges, and other services. Because the tickets will be recorded on the ledger, the possibility of chaos caused by events like system crashes is eliminated. 

 

Furthermore, it can incorporate biometric identification to eliminate the requirement for clients to carry digital or physical tickets and identity credentials.

 

4. Security of Flight Record Systems

 

Airplane crashes or flight disappearances (such as Malaysia Airlines Flight 370 in 2014) rely on flight data to determine the cause of the accident or to follow the course of the aircraft to discover the debris or to launch search and rescue efforts. 

 

Blockchain can assist in collecting and storing all data linked to a single aircraft, such as manifests, flight paths, luggage onboarding, and other parameters. The data may be utilized for a variety of activities, such as tracking down the whereabouts of missing luggage or obtaining information such as the names and seat numbers of people on board the flight.

 

5. Reducing Overbooking Instances

 

Due empty seats result in revenue loss, airlines overbook flights as a precaution against last-minute cancellations, customers arriving late for the trip, and other factors that might lead them to fly under capacity. 

 

Overbooked customers may be kicked off aircraft or refused boarding, resulting in negative headlines for the airline. Airlines may better handle overbooking by utilizing blockchain-based technologies such as tokenized tickets and smart contracts, ensuring that none of the parties loses.
 

6. Revenue Sharing Among Airline Alliances

 

There are now three major airline alliances in the world, necessitating an efficient revenue-sharing strategy. While the alliance provides passengers with numerous connections, the revenue sharing algorithms are unreliable, resulting in inter-airline conflicts and delayed flights. 

 

Blockchain allows for the creation of a single system that employs specified criteria to promptly distribute income, lowering overall expenses and guaranteeing that flights are not delayed due to revenue sharing conflicts.

 

7. Consolidated Frequent Flier Programs

 

While frequent flier programs are designed to capitalize on consumer loyalty, airline loyalty programs differ substantially and have a lot of room for improvement in terms of customer incentivization. 

 

Blockchain technology can make it easier to combine the loyalty systems of multiple airlines within an alliance, giving passengers many more alternatives for redeeming their accumulated miles. Additionally, blockchain may be used to manage features such as sharing of revenue, loyalty point redemption, and point accrual.

 

The Problem of Aviation Data Authenticity

 

Data adds enormous complications to the aviation sector. Let's have a look at some of the data points acquired by every operator and MRO. Every aircraft configuration has around 6 million parts that must be tracked along with their accompanying maintenance and component programs. 

 

Aside from documenting part and aircraft maintenance history, service bulletins (SBs), and airworthiness requirements that an aircraft must follow provide a multitude of data.

 

This data is stored on a variety of systems that differ from one company to the next. When a choice is made to buy, sell, or add items to inventory, businesses spend a lot of time and effort confirming the validity of this data by including multiple purchasers who specialize in acquiring and examining these parts to authenticate the data. 

 

This is also one of the reasons why the supply chain for aircraft parts is lengthy and inefficient. On every traditional system, there is a natural need to verify data.

 

Blockchain's decentralized, immutable, and consensus-based nature makes it an ideal fit for assisting in the resolution of these issues. At its most basic, a blockchain is a digital record of peer-to-peer transactions with the capacity to govern visibility – who has permission to access which data. 

 

Blockchain allows for the creation of a "digital birth certificate" for each item, which is updated each time the part goes through the supply chain or is placed on a plane. The status of the item is also updated whenever the plane is serviced or examined by a specialist.

 

The digital record for that part might include the aircraft's tail number and configuration, the position of the part in the plane, the manufacturer, the identity of each technician who has handled the item, and the place where the service was conducted. 

 

These data recordings may be combined to create a "digital twin" of the aircraft, providing a real-time snapshot of its state from the moment it leaves the assembly line to the day it is returned to its lessor or withdrawn from service decades later. 

 

Furthermore, by guaranteeing that participants only have access to the information to which they are authorized, blockchain might increase members' insight into their own firms while protecting their data from rivals. Thus, Blockchain serves the best technological medium serving the aviation industry.