Smart contracts could, too, be used to standardise and automate leasing contracts of entire aircraft, another popular trend in the aviation industry.

In the longer term, it’s easy to imagine that blockchain could offer a smarter way in many different areas of the industry. Just think of revenue sharing with other airlines, in case of delays or offering customers expanded route options.

Settling accounts with other airlines is complex and heavily regulated by IATA, and it’s only getting more complex as revenue sources evolve with seat selection, baggage and priority packages being offered by many airlines at additional cost.

Airlines could, together with IATA, define a common rule set and use smart contracts to execute and track payments on a blockchain network. This would allow airlines to trust and recognise their share of the revenue more easily.

Blockchain in aviation is taking off

The aviation industry, ruled by safety concerns and heavy regulation, isn’t exactly known for leading the way when it comes to adopting new technologies. For this reason, the bar is set pretty high for proof of concept, with regard to blockchain.

Among the companies studying the potential of blockchain are Airbus and Rolls-Royce. The former even created a special unit in the company responsible for exploring how blockchain could address current and future business challenges in the supply chain.

A number of airlines have also expressed their interest in blockchain technology. Lufthansa, Air New Zealand and British Airways are already working with various blockchain startups on some ambitious projects, while Air France, last year, announced that the company is looking toward blockchain technology to improve its maintenance activities.

The testing continues on the other side of the table, the providers of blockchain solutions are also making progress.

Parts Pedigree is one such provider and a firm believer in the prospects of blockchain technology. The company is building a platform that promises to make digitising part records easy, ultimately granting all the necessary stakeholders a complete overview of an asset’s entire lifecycle. Parts Pedigree is currently piloting their project in the real world with a major aerospace part distributor.

We had a talk with the CEO of Parts Pedigree about their exciting blockchain project:

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Blockchain in the aviation industry - why it’s not just a buzzword