How to use blockchain to improve passenger experience?
Blockchain is a fascinating, new and impactful technology that we started hearing about in recent years. What is it? People usually associate blockchain technology with cryptocurrencies like bitcoin, which provides a way of transferring money anonymously without an intermediary. At its core, blockchain is a ledger that securely records transactions across a network of participants (a decentralized database).
Google is the first company that pioneered distributed architecture when creating MapReduce in 2004. This algorithm enabled them to handle a large number of queries of large and complex data sets named Big Data.
This blockchain tech is quickly emerging as a key technology for future exploration among airports and airlines across the world, thus gaining the most research attention this year. This decentralized database can provide many benefits – passenger identification, billing, ticketing, asset tracking and managing frequent flyers programmes.
SITA Lab director Gustavo Pina said: “The biggest obstacles standing in the way of a seamless passenger journey and truly efficient air travel are the siloed processes across the many stakeholders, including airlines, airports, ground handlers and control authorities.”
According to the SITA report, almost 59% of airlines have planned pilot or research programmes related to blockchain for implementation by 2021, a 42% increase from last year. Airports are also focusing on experimenting with blockchain, with 34% planning research and development projects by 2021.
It is expected that blockchain will help both airlines and airports to modernize the passenger identification process, with 40% of airlines and 36% of airports saying this would be a major benefit.
Other important areas where blockchain could have a major impact include the launch of passenger tokens for frequent flyer programmes (34%) and e-tickets (31%). Airports believe that the technology can help in baggage tracking (28%) and operational efficiency (24%).
A few airlines have already started implementing blockchain technology into their daily operations. Air France–KLM, Air Canada, Lufthansa, and Air New Zealand have partnered with Winding Tree to develop a blockchain app that will allow consumers to access tickets directly from the airlines.
Airlines can improve speed, transparency, and responsiveness. This will save them substantial time and money and paves the way for new business models.
With blockchain, airlines can:
- Automate repetitive processes and payments.
- Improve the customer experience.
- Simplify revenue accounting and payment reconciliation.
- Reduce dependence on intermediaries and reallocate industry value.
- Track components, luggage, and shipments.
- Improve ground operations and on-time departures.