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Blockchain In Aviation-Key Factors Transforming the Airline Industry

Blockchain In Aviation-Key Factors Transforming the Airline Industry
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    December 28, 2023 Last Updated: December 28, 2023


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The aviation industry is no stranger to technological advancements and one of the latest trends making waves is blockchain. The blockchain in aviation has the potential to transform the way airlines operate. It can offer solutions to complex challenges opening new doors to possibilities for high efficiency and security.

According to Airbus, blockchain could save airlines $40 billion annually through improved maintenance efficiency. Another report suggested that blockchain could eliminate 4 billion of paper travel documents annually, saving $5 billion in processing costs.

In this blog, we will explore the benefits of blockchain development for aviation and the various use cases that demonstrate its potential. But first, let’s analyze the market data of blockchain in the aviation industry. 

So let’s begin!

Market Overview Of Blockchain In Aviation

The aviation industry is touching new heights with blockchain technology in the driver’s seat. Here’s some data that reflects its future potential. 

The global aviation blockchain market is estimated to reach $1394 billion by 2030, growing at a 22.1% CAGR. The increasing demand for automation and improved efficiency in maintenance, passenger experience, and cargo management highly contribute to this rising growth. 

Market overview of blockchain in aviation

North America is bound to hold around 25.2% of the market share by 2025. This dominance is driven by factors like early adoption, advanced technological infrastructure, and government initiatives favoring blockchain innovation. 

Aviation Blockchain Market

A report by the World Economic Forum predicts that blockchain could reduce the aviation industry’s carbon footprint by up to 20% by 2030. Going ahead we’ll discuss other major advantages of blockchain in the aviation sector.

Notable Benefits of Blockchain for the Aviation Industry 

Blockchain technology offers a decentralized and secure framework for managing and sharing data within the blockchain ecosystem. Let’s explore the key benefits of blockchain in the aviation sector:

1Enhanced Data Security and Integrity

As per Resilinc, cyberattacks in the airline industry reached 24% worldwide in the first half of the year 2023. This raises questions about the security of data stored in the system. Blockchain provides a solution to this problem with immediate effect. 

One of the basic features of blockchain technology is its immutability. Once data is recorded on the blockchain, it cannot be altered without the consensus of the network participants. This makes blockchain an ideal solution for ensuring the security and integrity of critical aviation data. It includes securing passenger information, maintaining records, and supply chain tracking.

2Improved Customer Experience

Airlines are making many efforts to improve the passenger experience through the adoption of advanced technologies like blockchain. By securely storing and sharing passenger data on the blockchain, airlines can improve ticketing, loyalty programs, and identity verification. This can lead to faster and more personalized services, reduced friction during travel, and increased customer satisfaction.

To cite an example, Airlines could allow customers to exchange their loyalty points for other currencies, such as cryptocurrencies leveraging blockchain. Customers could redeem rewards from various airlines from anywhere around the world.

3Efficient Payment Systems

A secure and transparent transaction is the core strength of blockchain technology. This potential of blockchain makes it an ideal solution for settlement processes in the aviation industry. With the help of smart contracts, airlines can automate billing, settlement, and loyalty program transactions.

It also reduces the need for manual reconciliation which eventually minimizes errors. Blockchain in payment can result in faster transactions promoting financial transparency. 

4Reduce dependence on intermediaries

The airline industry heavily relies on intermediaries for various transactions. This sometimes leads to revenue loss and delays. For instance, airlines lose up to 30% of their ticket revenue to online travel agencies like Expedia and Priceline. 

Blockchain technology offers a potential solution to reduce transaction costs without or with fewer intermediaries.  The partnership between Air France-KLM, Air Canada, Lufthansa, and Air New Zealand with Winding Tree is a direct challenge to online travel agencies. This blockchain app will allow passengers to book tickets directly from the airlines, saving them money on booking fees and increasing transparency in pricing.

5Streamline ground operations

One small error can lead to chaos in the airline industry. There are various manual processes and paperwork that cause delays and errors in daily ground operations at the airport. By implementing Blockchain in aviation, processes like refueling, baggage handling, and maintenance schedules can be streamlined. 

Another major problem of identity verification poses a significant challenge. Airlines can utilize blockchain for identity management to reduce the risk of unauthorized access. Beyond cryptocurrencies, blockchain has the potential to disrupt various industries. Just like the use cases of blockchain in education, we have discussed aviation blockchain use cases in the next segment.

Blockchain In Aviation

4 Blockchain Use Cases in Aviation 

The airline industry has four unique requirements that can be addressed with the integration of blockchain technology. Let’s explore use cases of blockchain in airlines one by one:

Use Cases of Blockchain in Airline Industry

  • Aircraft Maintenance 

Maintaining the safety of aircraft is of utmost importance to keep this industry airborne. Poor management can result in delayed flights and cost millions of dollars to airline companies. 

Blockchain can be used to track and manage the lifecycle of aircraft parts. By recording maintenance and repair information, airlines can streamline different processes which will in the end reduce the overall costs and enhance safety.

  • Loyalty Programs 

Blockchain and airlines can work hand in hand for loyalty programs that help to retain customers. It can offer a secure and transparent platform for managing customer rewards and incentives.

Blockchain technology can also help in the creation of new loyalty models, such as P2P rewards, dynamic pricing, or gamification. This could attract new customers and increase engagement.

  • Identity Management 

Airplane hijacks and other risks of terrorist activity in airlines are the result of identity forgery. Also, hackers and criminal organizations target airline databases and passenger information systems to steal personal data and create fake identities.

Blockchain technology can provide a secure and decentralized platform for managing passenger identities, crew information, and employee records. By leveraging blockchain, airlines can enhance security, reduce the risk of identity fraud, and streamline identity verification processes.

  • Baggage Tracking

Every year, around 25 million bags get lost or are wrongly transported to different locations. That’s enough to fill the Colosseum in Rome… twice!

By recording the movement of baggage and cargo on the blockchain, airlines can have real-time updates and reduce errors. This can help prevent lost or mishandled baggage and provide customers with real-time visibility into the location and status of their belongings.

Also Read: A Complete Guide on Blockchain App Development Cost in 2023

The Challenges Faced by the Aviation Industry

As the aviation industry moves towards a new digital era, it becomes important to explore the  challenges that need to be overcome. Here are a few challenges of blockchain in airlines. 

  • Supply Chain Management 

Aviation faces many supply chain management roadblocks that impact operational effectiveness. One major challenge is the complexity of the aviation supply chain. Aircraft assembly involves expensive components which are sourced from suppliers around the globe. Coordinating the production, transportation, and timely delivery of these components to meet strict aviation standards is a big logistical challenge.

Addressing this hurdle requires innovative and strategic solutions. This includes the proper use of advanced technologies like blockchain. It can help aviation businesses to cut costs and bring all the parties involved under one roof. 

  • Ticketing and Reservations

Traditional ticketing systems are susceptible to fraudulent activities. It might include ticket duplication and unauthorized reselling. And as we all know, airplane ticket prices are highly fluctuating which leads to customer dissatisfaction.

The smart ticketing concept is a good option that can solve these issues. The aviation sector can offer a bunch of facilities to passengers like paperless tickets, lounge access, and other premium perks. This not only mitigates existing challenges but also sets the stage for a more passenger-friendly ticketing system.

  • Information Maintenance

There are several cases of missing flights that are still unsolved. A huge amount of money was spent on the MH370 flight which disappeared on the rada in 2014.  It was the most expensive search in the history of aviation.  

Blockchain enables the recording of the location of valuable assets, providing real-time and reliable tracking. This extends to crucial aspects such as the flight path, baggage boarding, and the ability to trace lost entities, enhancing operational efficiency and responsiveness during unforeseen circumstances.

Blockchain Development

Integrate Blockchain In Aviation With Blocktunix 

Blockchain technology has transformed various industries like healthcare, finance, sports, and more. With the right guidance and cooperation, it can achieve great heights in the aviation industry as well. 

Aviation businesses and startups looking to tap into the industry must act now. Get in touch with a professional company that provides comprehensive blockchain development services that can fulfill your unique project requirements.  

Blocktunix is a leading Blockchain development company that specializes in providing innovative solutions to industries like Aviation and others. With extensive experience in blockchain and other emerging technologies, Blocktunix boosts profitability in business. 

Partner now and embark on the journey of innovation with us!

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