Beyond the Hype: Blockchain and Its Applications in Business Aviation

 - February 4, 2018, 12:20 AM

On January 3, Israel Aerospace Industries (IAI) and Poalim Bank announced a strategic collaboration on the use of blockchain for securing information within the business aviation lifecycle. With this announcement, IAI joins Air France KLM, Boeing, and many other aviation corporations looking to blockchain to solve aviation problems.

Often confused with bitcoin, blockchain is the technology upon which bitcoin rests. It is essentially a widely accessible database. Participants within a blockchain can submit information. In the case of bitcoin, users submit financial transactions to the blockchain. With aviation, users could submit flight hours, traveler information, safety records, and much more. This information is then confirmed via a mechanism established by the community using that blockchain.

Once an action or submission to a blockchain is confirmed, it is added to a “block.” Each block can contain thousands to millions of distinct points of data. These blocks are then sealed upon completion. Once in the chain of blocks, information cannot be changed. Each piece of information and each block is confirmed using cryptography. This allows each blockchain user to confirm that the information remains unchanged.

A key component of a blockchain is that it is decentralized. Therefore, because no one entity owns the blockchain, all stakeholders within business aviation can use it to share records. Similarly, because every entity can access the information within the blockchain, there is no need for multiple record-keeping systems.

The cryptography used in the blockchain offers improved security over traditional web-based and internal record-keeping systems. Additionally, cryptographic timestamps on each point of data reduce the opportunities for fraud. Finally, data within the blockchain is more transparent and accessible than that maintained in current record-keeping systems due to the “ledger” system.

Blockchain data is recorded in ledgers that are on the servers of each participating organization. These ledgers are updated simultaneously with each new addition of a block. This means every participating organization has full access to the data without relying on someone else’s server.

Commerical Applications

Air France KLM began researching realistic aviation blockchain use cases in its MRO Lab in mid-2017. In an October 2017 webinar with Microsoft and Ramco Aviation, James Kornberg, Air France KLM’s director of innovation, identified four features of blockchain: “resilience, traceability, integrity, and disintermediation" and characterized them as "well suited to the aviation supply chain.”

Most proposed aviation blockchain applications currently seek to resolve problems in operations, as well as maintenance, repair, and overhaul (MRO). In November 2017, General Electric (GE) filed a series of five patents with the United States Patent and Trademark Office. These five patents create a theoretical system for tracking aircraft maintenance records, parts acquisition, flight records, and any additional information pertaining to the life of an aircraft.

Boeing is examining both the use of blockchain for securing the supply chain process and resolving current aviation cybersecurity concerns. A December 2017 Boeing patent application reveals the company's intention to use blockchain to prevent GPS spoofing events.

Accenture Consulting, a major technology consulting company, proposes the blockchain for e-ticketing and airline loyalty programs. Meanwhile, IATA is evaluatingusing blockchain for a payment system. It hopes to create a payment network for aviation that will return an estimated $7.7 billion to airlines.