How the aviation industry is turning to blockchain

Blockchain technology adoption is picking up speed across a diverse range of industries, with one of the most enthusiastic early adopters proving to be aviation.

by Jo Perks for CNR

Research from professional services business Accenture reveals aviation companies are buying into the concept of blockchain at a faster rate than previously thought. As per Aviation Week, 86% of aerospace and defence companies expect to be using the technology by 2021. The sector has the third highest level of expected blockchain adoption across the 18 industries polled, coming marginally behind the semiconductor and health payment industries.

Indeed, blockchain has been tipped by Accenture as a key emerging technology for the past two years running. John Schmidt, Accenture’s managing director of aerospace and defence, says: “It’s very rare that we talk about something two years in a row but this technology is taking off much faster than we thought it would.” He estimates that more than half of companies are already actively working with the technology and predicts it will soon become a a “game-changing innovation for this sector.”

Accenture is working with aerospace company Thales to develop a blockchain-based system to track aircraft parts and materials. “Blockchain technology offers a new, elegant and secure way for the industry to track and trace myriad components while deterring counterfeiting and improving maintenance capabilities,” explains Schmidt.

Rather than employing proof-of-work to validate transactions, as per the public blockchains used in cryptocurrencies, private blockchains sit on secure networks or servers. They function much like a regular database, but where the data can’t be altered or destroyed. This means a critical part, such as an aircraft engine, can be accurately tracked throughout its lifetime, helping to identify potential problems early on.

Blockchain is rapidly finding new applications in this industry beyond component tracking. Examples of it already in everyday use are numerous and diverse, ranging from flight operations and identity management to tokenised ticketing, fuel payment systems and even loyalty schemes.

Singapore Airlines has introduced a miles-based blockchain based digital wallet called KrisPay, developed with Microsoft and KPMG. Using KrisPay, travellers can convert air miles into cryptocurrency to pay for goods and services. Russian aviation refuelling company GazpromneftAero has teamed up with S7 Airlines and Siberia Airlines to launch a blockchain-based smartcontract system for fuel payments. Still in development, Dubai Airport is working on a gateless border using blockchain and biometric technology.

Despite blockchain being so new, there is an encouraging level of collaboration across the industry. Earlier this year SITA, a technology company owned by more than 400 airlines, launched the Aviation Blockchain Sandbox, to explore the potential applications of blockchain in aviation. This project follows on from its FlightChain initiative, working with selected major airports to demonstrate the safe use of blockchain technology for managing real time flight data.

At the current accelerated rate of development, Schmidt’s prediction of full scale adoption of blockchain across the industry within the next few years could become a reality.

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