Blockchain Applications in Airlines

Currently travelers are required to show their IDs at multiple checkpoints from entering the airport to luggage drop off to buying stuff from the duty free shops. Further, the long queues at security check-in and border control checkpoints are some of the other key pain points that travellers have to go through. Blockchain technology has the potential to simplify this process and eliminate the need to shuffle your bag repeatedly for taking out IDs and various other documents for verification.

Read More : Blockchain Use Cases in Hotel and Travel Industry

Now let us understand how will this work: With Blockchain based system,
a user will be able to create his own digital ID, completely controlled by him. In other words, he can decide who can view his information stored on the ID and he can even decide what part of the information should be shared with any specific viewer. First, the user will be required to download the blockchain based Digital ID creator app for uploading his personal verification documents like passport, visa etc and biometric data like fingerprints, eye scan and voice. This data will then be uploaded on the Blockchain and a unique hash will be generated for the user’s information.

Now, this data will be sent to a government agency for verification. This agency will check and verify the user’s data against the central database and will either approve it or disapprove it. The verification status of the uploaded documents and ID will get stored on the Blockchain. Now when a user needs to take a flight, after reaching the airport he can then simply go to a self-check-in security booth, where the user will be required to share his verified digital ID.

After this, the user’s biometrics like the fingerprint, or facial recognition will be captured by the booth and will be verified against the verified digital ID provided by the user. On verification, a QR code will be generated which can be scanned by the user through his mobile app and can be used in further rounds of verification done at the airport. Thus saving him a lot of precious time and unwanted hassle to take out his passport and other documents again and again to verify his credentials. In case of international travel the user can also share his verified digital ID with the border agencies well before his arrival dates. This will initiate the risk assessment in advance and the actual process will be much faster and smoother when the user actually arrives at the border site. As the digital ID is government verified the user can even be saved from the hassle of showing the passport.

Now we will look how blockchain can be used in baggage tracking. What comes to your mind when you think of travel. Packing your bags and leaving for that vacation you have been planning all month long. With your bags ready to leave for the airport, thinking about the wonderful beaches that you will hit or the unconquered mountains you will conquer. But as you leave your bags at the baggage drop in counter a slight sense of scepticism creeps in and you become slightly worried about your luggage carrying all your important stuff and gears. You just wish that it gets loaded on the right plane and in case you have a connecting flight, your concern reaches the next level. And all of this happens because you have no clear visibility of your own luggage.

In the current system, there is no way to track your luggage even at a single point during your whole journey. The main reason behind this is the lack of data exchange among the parties involved in the luggage transfer. The responsibility for every luggage item changes repeatedly during the journey. And when the baggage change hands, the relevant information is uploaded and stored in the respective local and private systems. This information stored in the local systems is not shared with other stakeholders. Thus making the backtracking of any luggage difficult and complicated. This is especially applicable to multi stop flights because an increased number of airports and authorities are involved in the luggage transfer which in turn makes the data sharing really difficult and confusing.

But worry not blockchain based system has a solution for this. In a blockchain based system, the data stored will be secure, immutable and accessible to all the stakeholders involved. Each bag will be marked with a unique code or number and each traveller would be given a corresponding unique number to track his luggage.

When the bag moves through a security scanner or tracking system, the data will be uploaded and recorded on the blockchain. Every stakeholder on the blockchain can track the entire journey of the baggage. Through this, every passenger can see the location of their bags in real time. This will give him a mental satisfaction that his bags have been loaded into the right plane even during multi-stop flights.

Further, it will also fasten the tracking of lost baggage as every stakeholder will have a clear picture of the luggage, its last trackingpoint and the authority responsible for it. Thus leading to a significant improvement in the customer experience for the flyers. Loyalty points and air miles are some of the very crucial ways through which airlines tap repeated customers.

But in the current system, customers have to wait until they have substantial loyalty points accrued in their account. Further usage of these points is limited to very specific places which leads to a lot of points left unused or getting expired.

But with blockchain based royalty points, the points can be redeemed at various other partner outlets. Thus increasing the usage and attractiveness of these points to the consumers. Very recently a blockchain based loyalty program has been launched by Singapore Airlines for its flyers. They have developed a digital wallet named Krispay, in partnership with Microsoft and KPMG where their flyers can convert their air miles into units of payment that can be used at partner outlets in Singapore. Customers are provided with a mobile app. Using this app, the customers can convert their miles into units of payment and use these units to pay at registered outlets by simply scanning a QR code.

Last but not the least blockchain can be used in Flight Insurance Payout using smart contracts. Many airline carriers and their travel partners sell flight delay insurance along with the flight tickets. But when the flights get delayed, we even don’t know whom to approach to get our insurance claim. The whole claim process is opaque and no one knows what are the steps involved or what is compensation that they will get if their flight gets delayed.

But with blockchain and smart contracts, the process will be simplified. This has been implemented by AXA where Flyers can buy flight delay insurance by paying a premium. Under this insurance scheme, if the flight gets delayed by more than 2 hours the smart contract gets executed and insurance claim amount gets automatically transferred in the accounts of the flyers.

For buying this smart contract based insurance, a person needs to first register their flight details on the service provider’s platform and fill their identity and account details. Then they can pay and buy the insurance plan. And if the flight gets delayed more than the stipulated time defined in the smart contract, an automatic payout is triggered by the smart contract in the flyer’s bank account. This payout is done without any manual intervention from any of the stakeholders involved. Thus making it swift and transparent.

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