Like this post?
get more like it as soon as they are published
Back to blog

Blockchain & IoT: a dream team

Published on  11 October by Arnaud Brolly , Portfolio Manager - Airline Operations, Air Travel Solutions, SITA
0 comment(s)
 

Blockchain, a form of distributed ledger technology, has been garnering much interest outside crypto currency, where it made its name. A fact upheld by the latest SITA Air Transport IT Insights which shows that 59% of airlines will have blockchain pilots or research programs in place in 2018 while 34% of airports are planning blockchain R&D programs by 2021. (You can read more about the various use cases in the report.)

New technologies offering strategic and operational benefits: Blockchain

Blockchain is a powerful technology on its own, but combine it with the Internet of Things (IoT) and you have a formidable team. IoT is by its very nature a distributed technology, while blockchain provides a foolproof ledger that can track devices, how they interact with each other and their transactions. Blockchain also supports self-executing or so called “smart contracts”.

Changing the way we work

At SITA we’re excited about the potential of blockchain and IoT to change the way we work in the air transport industry. The potent combination of these two technologies is triggering exciting new applications that will build trust, reduce costs, improve transparency and provide critical security. It can also streamline and facilitate the many processes and industry actors in the air transport industry’s ecosystem.

IoT will strongly benefit from blockchain’s capabilities, including security enforcement by design, cost reduction, removing non-necessary intermediaries involved in business processes and building trust among main stakeholders, by providing full transparency of various transactions. This so-called ‘network effect’ gives actors joining clear visibility over the different processes which everyone in the chain can see.

In brief, Blockchain allows organizations to leverage their IoT data and automate business processes between partners without having to set up expensive, complex IT infrastructures. Its big bonuses are that it doesn’t require hardware maintenance and it is almost impossible for it to go down. Bitcoin’s network has been live since 2008!

Enormous potential

Blockchain and IoT have enormous potential in the air transport industry. Cargo, for example, faces several challenges, including a large number of industry actors, time-consuming paper certification across the supply chain and difficulty in tracking assets, provenance, history and real-time monitoring.

Blockchain and IoT can help to overcome these challenges. A permanent, shared secure ledger of transactions streamlines and improves transparency at every step of the process from origin to destination. A reduced number of intermediaries and better visibility enables bottlenecks to be identified and processes accelerated, whilst reducing errors and fraud.

Sensor data, for example, can be exploited to automatically alert customers and shippers to launch a new production set if a unit load device (ULD) goes over a certain temperature. Or it can automatically calculate penalties if a ULD has been sitting in an airport too long i.e. demurrage fees (or if a ULD agent took too long to give the ULD back to Air Cargo, i.e. detention fees). This saves not only on administration costs but also on time and resources by avoiding sending people to physically check the ULDs.

Exciting applications

We’re seeing blockchain and IoT already spawning exciting applications in air travel. Several start-ups and large multinationals are working on solutions. One use case, for example, is developing a solution for the aircraft spare parts market that will link existing enterprise resource management (ERM) systems.

Trusted partners within the network can view the status (log record) and full provenance of an aircraft part, securing and streamlining supply chain flows. Smart contracts can automate processes and digitize invoices and receipts in near real time, which will dramatically save time in fulfillment and payment cycles.

Brussels Airport is another great example, having launched a blockchain-based application that will help track cargo movement between ground handlers and freight forwarders. The application runs in conjunction with BRUcloud, the airport’s open data management platform hosted in the cloud, eliminating the need for physical paperwork to sign off a shipment’s handover from cargo handlers to forwarder. The move is in line with the International Air Transport Association (IATA) push for air cargo to go paperless wherever/whenever possible.

Teaming to work on great ideas

Blockchain and IOT   are perfect examples of disruptive innovation leading the way. This is why the industry needs collaboration and co-innovation (see Blockchain Sandbox, below). Airport and airline CIOs are establishing various partnerships to develop their capacities in new technologies such as blockchain and IOT, as reported in SITA’s Air Transport IT Insights 2018

Airlines and airports seek partnership for innovation: Blockchain & IoT

Here at SITA we are working with a strategic partner on a use case for cargo solution that tracks ULD containers and writes down the data into a blockchain. The solution improves process efficiency and cuts down on handling costs and lost cargo by giving stakeholders visibility of ULDs status and location. Smart contracts will be integrated into the solution enabling payment to be triggered once a ULD is delivered, optimizing the shipping journey.

The biggest benefits blockchain will provide is in process efficiency by breaking down silos and providing more transparency. The “flight data problem” is a well-known issue in the industry - namely, there’s no single source of the truth and the data that does exist, is not easily accessed by all parties.

SITA Lab in partnership with British Airways, Heathrow, Geneva Airport and Miami International Airport have developed a proof-of-concept, dubbed FlightChain, that uses blockchain technology to provide a single version of the truth on flight information (departure and arrival time of aircraft) for different airlines and airports. Using ‘smart contracts’ for shared control of data by airlines and airports is one which promises real benefits.

A transformational future

The air travel industry is a complex one with so many interlinked, interdependent services that impact each other. This complexity isn’t going away.Together blockchain and IoT have the potential to streamline this integration and pave the way for some truly exciting applications that will become real game changers for our industry.

Look out for our next two blogs on blockchain and the IoT. 

For more

Leave your Comment

You must be logged in to post comments

Comments

    There are currently no comments, be the first to post one!
Connect with us