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Gazprom And Russian Airline S7 Put Aircraft Fuelling on Blockchain in Domestic First

Russian air carrier S7 Airlines has partnered with state-owned oil giant Gazprom Neft to use blockchain-based smart contracts for aircraft fuelling, a press release confirmed Friday, August 24.

S7, which has developed several blockchain use cases in the past two years, will now use the technology to increase efficiency of fuel delivery and payment, as well as in the refuelling process at airports.

The partnership features Gazprom Neft’s dedicated aviation refuelling subsidiary Gazpromneft-Aero.

“Using blockchain technologies in reciprocal accounting and settlements between aviation companies and fuel operators gives new impetus to the development of the entire aviation industry,” Gazpromneft-Aero CEO Vladimir Egorov commented.

According to the parties involved, the move marks the first use of such blockchain technologies on the Russian market.

Smart contracts will replace the current more complex process involving pre-payments, bank guarantees and “associated risks,” Gazprom explains, which will in turn engender reduced processing time and savings on labor costs.

“Under established procedures, once refuelling is complete, reconciliation takes place and settlement is made,” S7 Group CIO Pavel Voronin added:

“Technology means transparency in reciprocal settlements is improving, meaning we can abandon a range of manual operations, and speed-up processes.”

In late 2016, S7 partnered with local bank Alfa Bank on using smart contracts for B2B payments, while last year, ticket sales began in what Voronin described at the time as “world’s first flight ticket purchase through an open API blockchain to a bank.”

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Russia's Largest Airline Tests Blockchain in Bid to Track Fuel Payments

S7, the largest airline operator in Russia, has tested a blockchain-based application that tracks data and paperwork connected to the process for refueling planes.

The airline said in a release on Monday that it trialed the application with its fuel supplier, Gazpromneft-Aero, and Alfa-Bank, Russia’s largest private bank, on a domestic flight based out of the Tolmachevo International Airport.

According to S7, the application shares data about fuel demand on a shared ledger, a copy of which is managed by each of the three parties. Further, payments for the fuel can be conducted on the network, with digital invoices created via smart contract during each tranasction.

The goal is to speed up the speed of transactions “without requiring advance payments and bank guarantees,” the airline said in the statement. It added that as the technology has eliminated “a number of manual operations,” the whole process took “60 seconds.”

“This is an automated trading operation between three parties: a bank, an airline and a fuel supplier. Upon the fact of fueling the aircraft according to the pre-established rules, reconciliation and write-offs are carried out,” Pavel Voronin, S7’s deputy head for information technology, said in a statement.

The trial represents S7’s latest effort to test blockchain for possible applications to its airline business.

As CoinDesk reported in July 2017, S7 looked at started issuing passenger tickets via the ethereum blockchain as part of its partnership with Alfa-Bank.

Aircraft image via Shutterstock

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Security, Loyalty Programs and the End of Overbooking: How Blockchain Could Help Airlines

Airlines and airports are functioning on outdated methods of information collection and distribution, using many isolated operating systems where data exchange can be timely and unsecure — despite a reported 170 percent increase in the past 20 years of U.S. outbound trips abroad.

Major competitors have recognized how the characteristics of the aviation industry align with blockchain, which has the potential to streamline data sharing among information silos in airports — and with ancillary travel enterprises more broadly — to create a seamless and secure travel experience.

Lufthansa Industry Solutions, a subsidiary of the largest airline in Europe, launched the initiative Blockchain for Aviation (BC4A) in an effort to compile potential applications of the technology and create industry standards for its use. Air New Zealand, Lufthansa, Eurowings, Austrian Airlines and Brussels Airlines have partnered with the Swiss-based non-profit Winding Tree, which is using blockchain to power a decentralized travel distribution network to make travel more cost effective and profitable for customers and providers.

The world’s airlines carry over three billion passengers annually and contribute $664.4 billion to the global GDP. Airlines must be flexible — yet systematic — to compete in the aviation industry, where the efficiency of their chain of operations determines their bottom line.

Smart contracts to improve customer experiences

Airports are microcosms of data storage. From the moment a traveler arrives at an airport to the time they depart, an enormous amount of secure data must be collected and shared among internal and external airport operations. The biggest obstacle for airlines lies in the decision making processes when travels plans change on a moments notice.

Each task within an airport may operate using different software, so the data reconciliation process is often timely and frustrating for both flight agents and travelers. Smart contracts can improve the customer experience and cost effectiveness of service by automating time consuming tasks.

Commonplace mishaps like flight delays and overbooked flights are costly to airlines when data is not shared quickly between decision makers. Currently, there is little cohesion among the mixed data and multitude of systems used at different checkpoints in airports.

The world’s leading airport communications and information technology specialist, SITA, has tackled the simple and prevalent issue of corresponding flight delay information in airports. SITA used the Ethereum protocol and smart contracts to create a blockchain platform that reconciles conflicting information about flight delays and communicates “a single source of truth for flight data.”

Smart contracts to improve customer experiences

SITA Lab designed a private permissioned blockchain — named Flightchain — to conduct trials and track over two million flight changes between British Airways, Geneva Airport, Heathrow and Miami Airport. Their findings suggest that smart contracts could be effective at mediating conflicting data and communicating industry standards, but they require governance and operational oversight. So as of now, cloud-based data sharing services are easier to arbitrate and manage.

A French insurance company, AXA, is utilizing smart contracts to automate compensation to passengers whose flights are delayed. When a customer subscribes to coverage on their flight-delay insurance platform, Fizzy,  a smart contract is created and connected to global air traffic databases. If a delay over two hours is registered on the ledger, compensation is automatically transferred to the customer, which eliminates the need to file a claim or dispute any discrepancies with the insurer.

Russia’s biggest domestic airline, S7, partnered with Alfa Bank to launch a blockchain platform to issue tickets. The private blockchain, built using the Ethereum protocol, uses smart contracts to exchange data between contracting parties and will reduce the settlement time between the airline and agents selling the tickets from 14 days to 23 seconds.

In a news release from S7, the airline stated that the technology “gives agents the ability to work directly with the airline without providing additional financial guarantees, reduces volumes of circulation of documents and guarantees the safety of operations.”

An Atlanta-based airline software company, Volantio, piloted a new program for United Airlines in lieu of an overbooking debacle that resulted in a passenger being forcibly removed from a flight. The “Flex-Schedule” platform uses AI to identify flexible passengers and target them with flight options to help airlines fix miscalculations in their booking processes.

The fully automated service compensates passengers and reassigns them to new flights, while maximizing profits for airlines by allowing them to sell open seats to “high-yielding,” last minute passengers. Volantio is also partnered with Emirates, Alaska Airlines, Ethiopia Airlines and Jetstar, among others — and its innovation may prove to be essential in eliminating last-minute negotiations at the gate, which inevitably delay flights and are costly to airlines.

Monetization of frequent flier loyalty points with digital currencies

Delta Air Lines is reportedly the first major global carrier to be replacing their passenger loyalty program, Skymiles, with digital currency. The airline will reward frequent fliers with Ethereum tokens dubbed “SkyMirage” tokens, which will cut out American Express as the middleman, enhance the security of the exchange and allow passengers to see their loyalty points accrue instantaneously.

Similarly, Singapore Airlines announced it will launch a blockchain-based passenger loyalty app that will allow customers to digitize their frequent flier awards and spend them at Singapore Airline-based merchant partners.

Transparency in luggage tracking

In partnership with Winding Tree, Air New Zealand is researching how blockchain may improve cargo and baggage tracking.

While still in the developmental phase, the application of blockchain could potentially allow passengers to track their own baggage in order to provide full transparency throughout the transfer process. Further, smart contracts could be deployed to automate insurance claims on lost baggage and instantaneously compensate customers.

Under-wing efficiency for the maintenance of aircrafts

Air France-KLM’s engineering and maintenance division is experimenting with potential uses for blockchain to record aircraft maintenance and service processes. Much of the data that is routinely collected on aircraft maintenance exists non-digitally, like service records, aircraft components and systems. A spokesperson for the airlines admitted a fully digital system would not be an easy transition but that blockchain could drastically improve “maintenance processes and workflows.”

Avoid airport queues with ‘gateless’ passport checks

The Safety and security of passengers and flight operations is above all else in the aviation industry, but creating a more effortless airport experience for travelers is another major goal of airlines. A United Kingdom-based tech firm, ObjectTech, signed an agreement with Dubai’s Immigration and Visa Department to test its ‘gate-less’ border program that uses biometric verification and blockchain technology to skip the passport process altogether. The pilot program will use facial recognition technology to identify travellers arriving in Dubai and verify their identities against a digital passports. Using blockchain, the digital passport is created as a ‘self-sovereign identity,’ ensuring the owner has singular control of their own data.

Paperless identification for effortless travel

Similarly, SITA Lab is experimenting with its own digital identity card built on a blockchain platform called the SITA Digital Identity Traveler app. In partnership with ShoCard, SITA plans to improve how travellers are identified at various points within airports by creating a mobile token that stores biometric and personal information. SITA has also begun other projects to enable mobile phone self-service of visa verification and border control.

Paperlesss identification for effortless travel

Safety in small airports and accountability of private pilots

A blockchain startup named Aeron reported that 57 percent of aviation accidents are due to human error. Aeron created a mobile app designed to record and verify a pilot’s qualifications in an effort to reduce accidents due to poor record keeping. The app, which operates using blockchain, stores all necessary pilot data in digital form — data which largely exists in traditional, paper pilot logbooks. The company is further developing a global database for the storage of aircraft information, pilots and flight schools. Aeron’s developments are geared toward private flights and accounting for private pilots, and it launched an online marketplace for booking private charters.

The need for further development

The capacity of blockchain to quickly reconcile conflicting data and verify consistency of information among various stakeholders in airports is a promising innovation for the aviation industry. The immutable and transparent nature of distributed ledger technology can provide greater security of flight operations, but many data collection processes still remain undigitized and isolated from one another. Smart contracts could drastically improve customer experience and replace timely and costly services, but would require central governance by an accredited organization, along with a lot of maintenance and oversight.

Blockchain has an application in a multitude of airport information niches, but further development by industry leaders is needed to create viable and cost effective uses of the technology.

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Singapore Airlines' Blockchain-Based Loyalty Program Takes Off

Singapore Airlines has officially launched its blockchain-based loyalty program for frequent customers.

KrisPay, a digital wallet developed in partnership with KPMG and Microsoft, allows Singapore Airlines customers to turn travel miles into units of payment, which can be used with partner merchants in Singapore. Most notably, however, the newly dubbed KrisFlyer program utilizes a blockchain to underpin its clients’ loyalty wallets, according to a press release.

Customers who sign up with the program will be able to download an app to a mobile phone. These customers will then be able to convert their miles into KrisPay units and pay with them by scanning a QR code at partner merchants.

The company announced 18 partners in Singapore, including eateries, beauty parlors, gas stations and some retailers,including the nation’s LEGO store outlets. More partners are expected to sign up soon, and the airline says it will offer discounts for early users.

The airline first announced its new blockchain service in February, after conducting a successful proof-of-concept trial with KPMG and Microsoft. The announcement comes a week after the airline was dubbed  it was announced the best airline in the world, winning the World Airline Awards by Skytrax in London. This year, SIA outpaced Qatar Airlines, the 2017 winner.

Singapore Airlines A350 image via Fasttailwind / Shutterstock

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Singapore Airlines Launches Blockchain-Based Loyalty Wallet, Co-Developed by Microsoft

Singapore Airlines (SIA) has launched its own airline loyalty digital wallet that uses blockchain technology, it announced July 24. The software has been co-developed by Microsoft and KPMG Digital Village, according to the press release.

The new wallet — dubbed ‘KrisPay’ after SIA’s ‘KrisFlyer’ loyalty programme — converts frequent flyer miles into digitized ‘KrisPay miles’ that can be used to pay for retail purchases via a mobile app.

As minimum expenditure, users of the wallet can spend 15 KrisPay miles (equivalent to about  S$0.10, or US$0.73) to make or offset purchases at point-of-sale for food and drink, petrol, beauty treatments, and other products from selected retailers.

According to SIA, KrisPay miles are currently accepted at 18 merchants island-wide, with more merchants to reportedly be added to the platform in future.

As Cointelegraph reported, SIA first successfully tested the proof-of-concept for its blockchain-based loyalty wallet back in February.

U.S. tech giant Microsoft, meanwhile, has been steadily investing in blockchain technology, with early moves to implement an off-chain Ethereum-based protocol by its cloud computing arm, Microsoft Azure, in summer of last year.

This February, the firm announced plans to integrate blockchain-based decentralized IDs into its Microsoft Authenticator app, and Azure formally announced the release of a blockchain app creation service, Azure Blockchain Workbench, in May.

Most recently, Microsoft has been working to integrate blockchain and artificial intelligence (AI) for supply chain management solutions, as well as partnering with two major Asian tech companies on an enterprise blockchain platform.

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Japanese Airline Confirms Future BTC Payment Option In The Works

Peach Aviation, a low-cost airline in Japan, has confirmed that their plan to allow Bitcoin (BTC) as payment is only delayed, not cancelled.

Peach Aviation had initially announced in May 2017 that customers would be able to use Bitcoin as a payment method by the end of the year. However, in December 2017, the plan was postponed until March 2018.

The airline had partnered with crypto exchange BITpoint Japan for the new BTC payment system as well as for plans to open Bitcoin ATMs at airports around Japan. Japan has recognized Bitcoin as a legal payment method in the country since April 2017.

Japanese broadcasting corporation NHK World had published an article last week, which has since been removed, that cited Peach Aviation officials questioning the dependability of cryptocurrency after Japanese crypto exchange Coincheck was hacked for $534 mln in NEM, and in light of recent volatility in the markets.

In response to the rumors that Peach Aviation would not follow through with their BTC payment option after the NHK article, the airline denied such a cancellation on their website, stating:

“There have been some reports today on our company retracting its plan to enable airline tickets to be purchased with Bitcoins; however, this is not something that was announced by our company and is not a fact. We are currently considering our start period in aiming to introduce such a service.”

Peach Aviation is not the first to accept Bitcoin as payment for flights. In July 2017, AirBaltic added the option to purchase flights with BTC. Singapore Airlines as recently as today, Feb. 5, announced a Blockchain-based frequent flyer app to be released in August 2018.

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Singapore Airlines To Launch ‘First’ Blockchain Loyalty App Among Competitors

Singapore Airlines will release a “groundbreaking” Blockchain-based app for frequent flyers by August 2018.

In a press release issued Monday, Feb. 5, the airline announced a Blockchain-based app for its KrisFlyer program had passed a “successful proof-of-concept exercise” with Microsoft and KPMG Digital Village.

Now looking to sign up Singapore-based merchants, customers participating in the program will ultimately be able to spend frequent flyer miles at point-of-sale in exchange for goods and services.

“This groundbreaking development in which we will be using blockchain technology to ‘digitalise’ KrisFlyer miles is a demonstration of the investment we are making to significantly enhance the digital side of our business for the benefit of our customer,” CEO Goh Choon Phong commented.

Blockchain’s entry into civil aviation has accelerated considerably over the past year, with various airlines and airport authorities now studying its uses for increasing efficiency.

Last month, the Canadian government announced a pilot scheme with the Netherlands aimed at leveraging Blockchain to overhaul immigration procedures. Meanwhile, February saw Brisbane Airport become the first in the world to make itself ‘cryptocurrency friendly’.

Speaking at the Singapore Airshow Aviation Leadership Summit this week quoted by Reuters, Phong added he “thought” SIA Group’s project was the first of its kind in the world.

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Singapore Airlines to Launch Blockchain-Based Loyalty Wallet

Singapore’s largest airline operator is turning to blockchain technology to boost spending of its loyalty program miles.

In an announcement on Feb. 5, Singapore Airlines (SIA) said it will launch a digital wallet for its frequent-flyer KrisFlyer program in six months that will be powered by a private blockchain.

According to the airline, the blockchain-based wallet will enable members of the program to spend their air miles at retail partners for point-of-sale transactions.

The company said the initiative comes about after a successful proof-of-concept trial in partnership with KPMG and Microsoft, and is currently signing up retail merchants – initially in Singapore –  to join the blockchain-based service.

The new project is the latest instance where blockchain technology is being adopted by airline and airport operators to enhance their operations.

As reported previously, Australia’s Brisbane airport is rolling out bitcoin payments across some terminal shopping and dining facilities.

While U.S. airline Surf Air has announced plans to accept cryptocurrencies for ticket payments, and Russian airline S7 is reportedly exploring blockchain technology for the issuing of flight tickets.

Singapore Airlines image via Shutterstock

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Private Airline Surf Air Accepts Bitcoin and Ethereum

The “all-you-can-fly” regional airline Surf Air has started accepting the cryptocurrencies Bitcoin and Ethereum as payment for its monthly membership and charter services. Under its plan, the private airline will allow its customers to pay for their seats using either virtual currency through a mobile app.

According to the airline’s Chairman and Chief Executive Officer (CEO), Sudhin Shahani, the disruptive and progressive technologies like Bitcoin and Ethereum complement their vision of changing the way the world sources, purchases, and accesses air travel.

“Surf Air was built on the idea of disrupting and changing the way the world sources, purchases and accesses air travel so it only makes sense that we would also be on the cutting-edge of accepting disruptive and progressive forms of payment such as Bitcoin and Ethereum. Similarly, Bitcoin users are a tremendously motivated community of early adopters. By creating connective tissue between these forward-thinking business models, I believe we’re molding the future for consumer-first, experience-driven commerce.”

Additional information on Surf Air’s new strategy

Under the new scheme, Surf Air allows its members to pay a monthly fee for them to fly as many times as they want. The passengers enrolled in the service are already pre-screened through a government-licensed background check so they would not be required to wait in security.

The regional carrier is partnering with digital currency platform Coinbase in the implementation of its new scheme with Coinbase handling the payments side of the program.

The airline industry’s adoption of cryptocurrencies

Players in the airline industry, particularly the regional and smaller companies, have taken a positive approach on the virtual currencies.

Before Surf Air, several regional airlines have already accepted Bitcoin as a form of payment over the years. Other companies have also explored other possible applications of the cryptocurrencies’ underlying technology called Blockchain, including in ticket disbursement and maintenance tracking.

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'All-You-Can-Fly' Airline Begins Accepting Bitcoin and Ether

Regional airline carrier Surf Air announced late last week that it would support bitcoin and ethereum payments for its monthly membership and charter services.

The “all-you-can-fly” private airline will allow users to pay for their seats with either cryptocurrency through a mobile app. It serves several cities in California, Texas, and Europe, according to a press release.

The company allows members to pay a monthly fee in order to fly as many times as they want, according to the Independent. Passengers are also pre-screened through a government-approved background check. As a result, they do not have to wait in security.

The cryptocurrency acceptance is being conducted in partnership with Coinbase, which will handle the payments side. In statements, CEO Sudhin Shahani said that the move to accept bitcoin and ethereum forms part of their wider efforts to disrupt air services.

“Digital currency has been on our radar from the very beginning and we are excited to provide our members with another quick and seamless way to do business with Surf Air,” he said.

Airlines – particularly smaller, regional ones – are no strangers to the cryptocurrency world, with a number having begun accepting bitcoin over the years. Indeed, the airline industry has also moved to explore applications of blockchain, including in areas such as ticket disbursement and maintenance tracking.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase. 

Aircraft image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.