The Impact of Blockchain Technology on Aviation




Most people associate blockchain technology with cryptocurrencies, such as Bitcoin and XRP. Many think that Bitcoin is a big lie since it was born in 2009, however, during the pandemic period, on Feb 8, 2021, Bitcoin surged above $46,000 to a new record after Elon Musk’s Tesla bought $1.5 billion worth. This seems like digital cryptocurrencies could be real. In the IATA study “Future of the Airline Industry 2035”, Blockchain has been identified as one of the technologies that may have a major impact on the future of aviation and the reality comes closer and closer. This world has been hugely changed by COVID-19, so we should believe everything could be possible. Let’s see how this technology could create another innovation in the aviation industry.


The relevant technologies used in the blockchain have been used more than ten years ago and its technical characteristics ensure the stability of data storage, the accuracy of data records, and the tamper-proof modification of data content in a decentralised environment.


Lots of leading airlines are already experimenting with new digital technologies, such as advanced analytics, robotics, and artificial intelligence. There are a number of ways to use blockchain technology. It can be used for tracking of baggage and cargo since this allows for the reliable and immutable tracking of the location and status of passengers’ bags and cargo; It can be used for identity verification. The use of blockchain can improve the efficiency of verifying the identity of passengers; It can be used for ticket overbooking, in the past ticket overbooking has been a problem for airlines which could be mitigated through the use of blockchain; It can be used for automated payments, the use of smart contracts can be adopted in airline transactions such as the billing among airlines; It can be also used for loyalty programs, the use of blockchain can streamline, the earning, spending, accounting and reconciliation of the points which are gained through the use of smart contracts in order to minimise risk of errors and improve customer satisfaction.


As saving cost is one of essential topics in the aviation market today during the pandemic. Let’s take a look at the example of GE aviation.


GE Aviation uses the supply chain tracking system of blockchain technology to monitor and collect data related to the manufacturing and life cycle of key parts of aircraft engines. Although the system is still in the development stage, MTU Aero Engine Maintenance said that GE Aviation’s blockchain technology has helped it release $10 million in unsettled cash from shared revenue reconciliation.


According to estimates by Price Waterhouse Coopers (PwC), blockchain technology can help reduce maintenance costs by approximately US$3.5 billion each year, mainly through the introduction of digital technology into data analysis, predictive maintenance, and certain engine OEMs and other large maintenance companies.


However, we must admit that everything has two sides, companies who participate in shared business activities must invest a lot of human resources and time to check whether the data they use in their internal databases are the same. If there are any differences found, they must check the data items.




This may cause airlines to insist on using MRO or OEM services, although GE Aviation’s distributed ledger may be the most advanced ledger on the market today, it is still in its infancy.


Therefore, we have to say that before blockchain is widely performed, many obstacles still need to be overcome. Moreover, the development of blockchain technology must start from somewhere. For example, an airplane may have more than 500,000 parts, but it may only count 5,000 of them.


Although the technology is still fairly young, airlines are already exploring applications that improve overall performance.



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