blockchain in aviation

The aviation industry is ripe for disruption. Two years after the start of the pandemic, the industry is quietly examining tools and technologies that can possibly assist its massive effort to become more efficient, cost-effective, customer-centric and eco-friendly. Much like artificial intelligence, blockchain’s unique traits place it in a special position to help set new industry standards for years to come. 


Blockchain technology is widely recognized for its potential to impact a wide range of business practices and methodologies. We are already witnessing blockchain’s impact on cryptocurrencies, and in the near future, virtually all industries will incorporate this decentralized and cryptography-based technology into their operations. In this respect, the aviation industry is no different. 


Let’s take blockchain’s full digital ledger transparency as an example. For decades, the aviation world has suffered from imperfect MRO (maintenance, repair and operations) transaction transparency. By creating a paperless system that can track all changes and alterations, blockchain technology can boost MRO efficiency, effectiveness and ultimately, profitability.


The transparency of blockchain technology can also enhance aviation safety. Despite being one of the safest forms of transportation, countless aviation accidents occur every year – the vast majority of which are caused by human error. Full digital process documentation and distribution will facilitate better safety regulation monitoring and supervision. 


In today’s world, safety also means cyber security. In the first article of this 2-part examination, we delved into the possible ways that blockchain can help reinforce aviation security in digital arenas. 


Blockchain is already making an impact


According to a detailed report by Deloitte, blockchain is already starting to impact certain aviation practices, which are primarily rooted in or related to financial operations. Deloitte identifies three key areas in which blockchain is already making an impact: parts tracking, customer loyalty programs, and engine and parts leasing. 


It is not surprising that these three areas are ushering in the blockchain revolution. Parts tracking and parts leasing involves much documentation by countless entities, and thus invites human error and inaccuracy through the front door. Blockchain’s fully transparent documentation records everything, and presents a clear picture of the entire operation – whether it is in-house part tracking or external lease transactions. Blockchain-enhanced loyalty programs allow airlines to use secure digital wallets, which can account for all customer transactions and build great token-based programs across multiple platforms. 


Deloitte also pinpoints two additional areas that are expected to be impacted: revenue recognition and airport slot management. In the case of complex interlining scenarios, Deloitte forecasts that blockchain-based platforms can assist airlines in following transactions trails and recognizing exactly how much of the revenue collected from customers belong to them. In the case of slot management, blockchain’s decentralized information sharing capabilities can allow airports to identify open slots quicker and more effectively, thus better utilizing their available infrastructures and improving passenger satisfaction. 


Calling all blockchain entrepreneurs


Blockchain technology is here to stay. As the aviation world begins to embrace cutting-edge technologies like artificial intelligence, it is just a matter of time before blockchain becomes the default platform for end-to-end aviation flow management.


Ido Biger, EL AL’s VP of Technology, is certain that blockchain is destined to penetrate the aviation industry. “When inspecting the technology aspect alone and thinking about the implications it might bring to the aviation world, I personally think it will be the standard as far as parts exchange, MRO, Cargo AWB opportunities, and independent initiatives that are currently halted by bureaucracy and over-administrative procedures.”


Despite its potential, the integration of blockchain into the aviation industry is likely to move at a cautious pace. How can the aviation industry accelerate the integration of blockchain technologies into its business ecosystem? For starters, it can actively pursue collaborations with startups. There are countless young and mature startups operating in the blockchain field that are searching for the optimal application for their technologies. In our opinion, the aviation ecosystem can be the ultimate breeding ground for groundbreaking blockchain-based products and services. 


If you are a blockchain entrepreneur and think your product can be a good fit for the aviation industry, please let us know. Together, we can explore potential synergies and collaborations. The worlds of blockchain and aviation will be better off for it.  




Deloitte, Using Blockchain to Streamline Airline Finance


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