Blockchain Takes Off – How Distributed Ledger Technology Will Transform Airlines
By Chami Akmeemana
The airline industry is surely one of the toughest. Historically, incumbents have been plagued by razor thin proft margins, high risk, unpredictable fuel and labor prices, and new challengers with disruptive business models. It is also subject to exogenous events like terrorism, capricious government actions, or natural disasters such as the April 2010 closing of the European air space because of a volcanic eruption in Iceland. With social media, any mistake makes headlines or goes viral.
As a result, many airlines have failed or been acquired. The top three US survivors—American Airlines, Delta, and United—have all faced bankruptcy at some point. Perhaps because of these challenges, it is an industry driven to innovation. I remember collaborating with the legendary chief information offcer of American Airlines, Max Hopper, who pioneered the development of the semi-automated business research environment—SABRE, for short—a computerized reservation system. Since then, there have been numerous major advances in operations (e.g., yield management) and aircraft technology.
Chances are you’re like me and spend a lot of time on airplanes. So the prospect of deep improvement in the airline industry is a welcome one. It turns out that blockchain will enable a whole new set of possibilities for passenger services, business processes, new revenues, and industry-wide problem solving. It may well be that blockchain is the most signifcant development for airlines since the introduction of the computer. This is the frst of our industry-specifc whitepapers. We’re delighted that Chami Akmeemana has taken on this project. Chami is a founder and board member of the Blockchain Association of Australia. He focuses on several important areas.
First, he looks at innovation to improve the passenger experience in terms of ticketing effciencies, frequent ﬂyer rewards, and passenger compensation. Second, he examines how blockchain can bring airlines and their partners much closer together. Third, he explores areas where blockchain can revolutionize logistics—from crew ﬂight bookings, maintenance, and safety record keeping, to maximizing the capacity of charter ﬂight, and addressing ineffciencies in cargo, customs, and clearing. Finally, he makes a number of recommendations that airline executives and their industry partners will fnd valuable. As blockchain itself takes off, the airline industry should, too. Chami’s lucid work shows how.
Full research report found here