The poor quality of services of some airlines, their constant delays, loss of baggage, and improper booking have long become legend. Measures such as the reduction of legroom and the return of the ban on the transportation of pets have whipped up a flurry of sharp criticism aimed at carriers and their associations. Of course, blockchain cannot eliminate all of the inconveniences caused by the policies of some companies, but it can certainly aid in the simplification of automation of logistics and services. Read our article that discusses the main problems that blockchain can solve in the airline industry.
The aviation industry has been and remains a super competitive environment. Therefore, carriers try to attract customers with a wide variety of marketing tactics, using any means available to them. The measures include dumping prices for flights to certain destinations, introducing loyalty programs, and adding new services that other carriers do not offer. The tokenization of miles may very well help passengers get their loyalty bonuses instantly, which is an absolute advantage for any company that fights fiercely for new customers.
Many passengers have to wait for the accumulation of a large number of miles to be able to redeem their rewards. Moreover, the procedure of their accrual can be prolonged and not very convenient. To facilitate this process, on February 5, Singapore Airlines with their KrisFlyer rewards program announced the launch of a digital wallet application for their regular customers. Initially, the program will be launched in the Singapore market.
"This innovation has played a key role in the success of Singapore Airlines since the first day and we are very pleased with this initiative, which will bring even more benefits to members of our KrisFlyer program," said Singapore Airlines CEO Goh Choon Phong.
The Winding Tree decentralized platform, a joint venture between Lufthansa and Swiss Air, offers a minimization of transaction fees for both suppliers and travelers. The site will use the LIF token of the ERC20 standard.
Overbooking is another issue that any traveler is likely to encounter. Airlines often set the amount of booking under the assumption that a certain percentage of passengers will refuse to fly at the last moment. If the number of those wishing to use a specific flight exceeds the number of seats, however, the carrier can switch the "extra" people to a similar flight, but at another time. Needless to say, such a practice can cause people a lot of inconveniences, ruin their vacations, disrupt their travel routes, or even result in the cancellation of important meetings.
Blockchain and smart contracts can reduce the risk of getting into such unpleasant situations and resolve conflicts between the airlines and their customers. The carriers can offer passengers electronic tickets with built-in smart contracts. With their help, airlines will be able to learn about the passengers who have refused to fly in advance without asking the clients to contact a call center. The fizzy project proposes to solve this problem by hashing passenger information records on their blockchain.
But what if one decides to refuse to fly due to reasons unrelated to an insured event? Sometimes, the carrier accepts to abide by the customer’s demands and compensates the costs. But, in most cases, the traveler is left with nothing. Even if one buys the so called "no fly insurance," the passenger still has to collect a mountain of documentation and present it in court. And they are paid their due compensation only after the court’s decision.
Some blockchain startups have found a solution for such cases. With the help of access to public records of flights and smart contracts, they offer to automatically reimburse affected passengers. This is a simple scheme consisting of a phased introduction of the following data on the blockchain: the description of the details of the trip, personal data, and payment. In case of a flight delay of more than two hours, the system automatically generates and pays compensation to the passenger who had registered using this method.
Loss of baggage is another headache for travelers. But if passengers had the opportunity to register each of their bags separately on the blockchain and re-registered them with every connecting flight, the process of searching for lost things would be much easier because all of the information about their movements would be guaranteed to remain unchanged. In this case, airlines will be able to easily exchange data about a particular piece of baggage, which was mistakenly sent on a wrong flight.
Reliable Storage of Information
Carriers have to process, aggregate, and store huge amounts of data about their customers and flights. Despite the fact that this information is extremely important for transfer to the aviation authorities, the lion's share from it is lost.
The Aeron project aims to tackle this problem. It focuses on combating illegal ways of storing information and encourages pilots to store data on a blockchain. The same method, however, can be used for other types of information, among which are data on the sales of tickets, the status of passenger registration, and information about connecting flights.
Unfortunately, cyber attacks, which are a global problem, have not bypassed the airline industry. From year to year, the number of such incidents increases. For example, in 2015, there were several emergency situations. United Airlines had to suspend all of its flights in the United States after finding false flight plans in the system. The Polish LOT airline could not properly service its fleet because of cyber attacks, and Ryanair suffered losses of millions of pounds due to an attack on the company's accounts. The use of private blockchains can more reliably protect the confidential data of travelers and flight crews as well as information about flights. Looking at the trend of recent years and the desire of the vast majority of airlines to capture a large part of some markets, we will likely be able to witness the introduction of blockchain into many branches of the aviation industry.