take a look at what those pain points are, how blockchains can help and what
decentralizing entrepreneurs have achieved to date.
travelers learn the hard way that a plane ticket for a given flight doesn’t
necessarily entitle them to board that flight. Airlines commonly and
deliberately overbook flights, betting that some passengers
won’t show up. When more passengers show up for a flight than there are seats
available, and not enough passengers volunteer to switch to different flights,
some passengers get bumped to a later flight against their will.
technology and smart contracts could alleviate this risk. Instead of issuing
manual calls at the gate for volunteers to give up their seats during an
overbooking situation, airlines could offer passengers the option of booking
e-tickets with built-in smart contracts that bump passengers and modify
ticketing information voluntarily. This would make the process of finding
volunteers less ad hoc and opportunistic. The airlines would know ahead of time
who is willing to be bumped, and passengers who want to take a bump would be
able to do so without having to be present at the gate prior to boarding.
your flight is overbooked or another type of delay occurs and you want to
cancel your trip entirely? Traditionally, passengers have had few good options
in this type of scenario. Airlines rarely issue ticket refunds except in
extreme circumstances. And while you could buy travel insurance to provide a
refund in the event of a flight delay or cancellation, obtaining the refund
usually requires collecting documentation of the problem, submitting a claim
and waiting for a refund to arrive. This process adds inconvenience to
passengers who have already been inconvenienced.
one travel insurance company, Fizzy, believes that smart contracts
can provide a better solution. By tracking public flight records and using
smart contracts to issue refunds, Fizzy delivers automatic compensation to
customers in the event of flight delays.
incidence of misplaced luggage is another frequent woe for air travelers whose
impact could be reduced with the help of a blockchain.
solution here is simple to envision: If passengers registered each piece of
luggage on a blockchain when they dropped it off, and registered it again when
they picked it up, it would become much easier to find a misplaced bag or
suitcase in the event that it ends up on the wrong flight, the wrong passenger
picks it up and so on.
records would be immutable, providing an unalterable record for tracking
luggage as it moves around the world. They could also be shared easily between
airlines in the event that an item ends up not just on the wrong flight, but in
the hands of an entirely different airline than the one that is supposed to be
responsible for it.
Airline Record Keeping
collect vast amounts of data related to passengers and flights. While a portion
of this data has to be reported to authorities like the Federal Aviation
Administration for compliance purposes, most of it is not stored in a
blockchain is an obvious solution for this challenge. It is already being put
to use by Aeron,
which encourages pilots to log flight data on a blockchain. Aeron’s major focus
is on combating fraudulent record keeping as a way to improve safety, but it is
easy to imagine how blockchain-based storage for other types of data, such as
ticketing information and even data as mundane as the layout of a plane’s
cabin, could add transparency and efficiency to the industry.
flyer programs have significant drawbacks. Passengers can typically redeem
rewards in exchange for a very limited set of goods and services, which means
that the rewards have virtually no real-world value. Airlines also usually
require passengers to accumulate a certain quantity of rewards before they can
redeem any of them, with the result that passengers who earn only small amounts
of rewards within a given time period often cannot use them at all.
process of redeeming rewards is usually complicated, especially if you use them
to purchase something other than flights. You can’t just browse an online
retailer who partners with your airline to redeem your rewards; you have to go
through a complex process to use the rewards to buy something from the
retailer, if this is allowed at all. This issue can be even more daunting if —
as many travelers do — you live in one country but want to use your rewards to
buy something in a different country with a different currency.
flyer rewards as cryptocurrency would mitigate these problems. Cryptocurrency
would be easier to use for purchases without a complicated redemption process.
Cryptocurrency-based rewards would be easy to use in any country, regardless of
the local currency. And if airlines released rewards as a cryptocurrency that
could be traded on public exchanges, the rewards would have real-world value.
Airlines has already announced plans to tokenize one of its flyer
rewards programs in order to streamline the redemption process. The company
will be using a private blockchain, which limits the functionality of its
tokens in some ways. Still, the innovation represents a significant
proof-of-concept experiment that could push other airlines to make similar
only a handful of blockchain-based solutions for the air travel industry have
been developed so far, the potential for further innovation in this vein is
significant. Blockchains may not make flying totally pleasant, but they
can help to reduce many of the problems and inconveniences associated with air