Unless you’ve lived under a rock for the last few years then you have heard about bitcoin, blockchain technology and cryptocurrencies. Whether you understand what those terms mean or what they represent is a completely different matter.
According to Don and Alex Tapscott, the authors of the book ‘Blockchain Revolution’, “The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
Basically, blockchain is a database that holds all kinds of information. This database guarantees that whatever is inputted into it (money, a graduation certificate, a home deed etc..) is real and anything written onto it cannot be amended or deleted. Cryptocurrency is basically the fuel that powers this database.
In May 2018 I submitted my Masters Thesis titled; ‘An initial Evaluation of the potential implementation of Blockchain Technology in the Accreditation of Aircraft Maintenance Stakeholders’. I was genuinely interested in this subject and, at first glance, I saw the potential for the implementation of such a technology in aviation.
After months of Redbull fuelled research, interviews and 20,000 words later, I still hadn’t wrapped my head around the technicalities of blockchain technology. Having said that, I had come to a theoretical conclusion based on the fundamentals of this new technology:
Blockchain would undoubtedly add value to the aircraft maintenance industry. The complete digitization of aircraft technical documentation and the battle against certificate fraud could both be solved by this technology.
Blockchain technology would ensure that fake aircraft engineers/pilot licenses and counterfeit parts would become a thing of the past. Such examples may have a significant impact on safety so they are subjects that should be taken seriously.
While the whole world has been working on digitizing their documentation and processes, there has been very little innovation in the evolution of aircraft documentation (possibly the single most valuable item of an aircraft is its documentation).
Without a shadow of a doubt, blockchain technology opens the door to a vast array of improvement opportunities for the aviation industry.
There are an infinite amount of internet articles that claim that the aviation industry would save millions of dollars by introducing blockchain technology. Airlines such as Lufthansa and Singapore Airlines have been working on developing their own blockchain ecosystem.
Stakeholders have no choice but to continue to invest in technology to facilitate the advancement of the industry. Unfortunately, currently there are certain external and internal factors that are putting a lot of pressure on the industry.
Let’s begin with the obvious, the increasing costs on airlines are making it harder for airlines to end the year in the green. Aviation regulators and certain manufacturers are experts at creating unnecessary costs for the already financially constrained stakeholders within the aviation sector.
The latest craze in our sphere is climate change/environmental/fuel tax – call it what you want. Aviation is already doing more than most industries to reduce its impact on climate change – fuel efficient aircraft engines, lighter aircraft bodies and the use of biofuel are just some examples. Governments should look at helping airlines by, for example, bringing the price down for biofuel so more airlines could afford to use it.
Increasing taxes on passengers and/or aircraft operators is not the solution to “sustainable aviation”. Increasing taxes would just dig a bigger hole in companies’ pockets: it would increase workloads on staff and reduce investment on actual safety/process improvement projects – such as the introduction of blockchain.
The second major hurdle the industry must get over is the lack of human and supply chain resources. The post-covid world is a very different world to how we left it in 2020. Most industries have a lot of catching up to do to get to late 2019/early 2020 service levels. The aviation industry is no different – stakeholders are utilizing a lot of resources to rebuild their organizations and to replenish their supply chains. These, therefore, take priority over continued technological development.
Lastly, the lack of communication and the lack of standardization between stakeholders in the aviation sphere is a masterpiece. The marvelous thing about aviation is, given the everyday challenges, men and women go to work to make the seemingly impossible a reality. A Blockchain eco-system would work best if implemented across multiple organizations, in different jurisdictions. Implementing a blockchain environment within one organization would create even more disparity within the industry.
At the end of the day, blockchain is a database that should be accessed by as many people and/or organizations as possible to have a centralized point of “truth”. Understanding when blockchain technology is actually needed is vital as standard technology would be able to carry out the vast majority of functions of, lets say, a private blockchain, at a fraction of the initial and operating cost.
Developing blockchain ‘silos’ continues to fuel the division between aviation stakeholders. States such as EASA (Europe) and FAA (USA) are in a far better position to champion the introduction and transition to the ‘new world’.Cooperation between major industry stakeholders to work together on a unified approach on unlocking the potential of this new technology would be the industry’s best chance of success.
Blockchain Technology has the potential to be a game-changer in our industry. It is incredible that such a powerful technology now exists. It is in reach but, yet, it is so far away.
This technology is still in its infancy. As time goes by, the development in this space will undoubtedly continue to strengthen the need for mass implementation within the industry. The challenge will be to correctly identify where this technology should be deployed. The hype is real – getting blinded by blockchain salesmen will be a hurdle that decision makers will have to overcome.