The Blockchain Future of Air Travel
What I will be pitching is an idea for a flexible and scalable blockchain network intertwined with traditional technologies for the airline industry. I will dive into the current problem with airlines, airports, government agencies. Afterwards, I will dive into my value proposition and network to solve some of these issues.
Most of the information from this post can be found and interacted within the demo itself. https://blockchain.sapnait.com:40101/ the demo offers connectivity to all the networks described below.
We will be talking about a connected IT infrastructure fostering the sharing of information in a secure and meaningful way to take the entire industry into the future. This is advantageous because we will be cutting down wait times for passengers, decreasing tarmac wait time, and cut total waste while improving efficiency for parties involved for a better customer experience. In order for blockchain and interconnected infrastructures to have value, that value has to be seen by all parties involved. Otherwise the question becomes “why should I invest in this system?”
Building the Interstate Highway System was not sexy nor easy, but by doing so we can provide two day shipping or same day shipping services and there is value in that. Blockchain will provide the same value efficiency increases for IT infrastructure.
Flying today is not the Luxury that it once was marketed to be because flying is just as stressful as it always has been. There are constant gate keepers to get through prior to boarding your flight. An interconnected system offers benefits to the airport to more quickly move flyers through those gates with increased efficiency, but also increased security.
Through traditional channels, London Heathrow Airport generates $13.32 dollar per passenger per flight. From an airports perspective the longer a passenger spends in the security line the less time they will have to shop. Retail and restaurants bring in nearly 45% of airport passenger revenue, the goal to get a passenger through the security line should be 10 – 20 minutes so they are not rushed to their flight gate.
Imagine if you could drop your bag off at hotel reception and pick it up at your destination. This is a service passengers are willing to pay for that can be split amongst airports, airlines and hotels for offering the service.
Improving and Automating the Security Line
Most of the time spent in airports is getting from your drop off point and through the security line. This security line process should not take more than 10 minutes on a normal day and 20 minutes during busy times. We should be moving/thinking toward automated security lines.
What is really cool about airline boarding passes is that they contain a lot of information. Above is a boarding pass of a trip I recently boarded. These are called PDF417 barcodes and reading them is fairly simple, they are industry standards.
When you go through security, you hand the agent your ID and boarding pass. They scan the boarding pass, check your ID and you are done What i have not been able to find the answer to is, are these systems connected? Is the Agents scanner device connected to an airlines database to sniff out a fraudulent boarding pass? If not, this is a huge security concern and there is no way we can even begin to think about automated security system without connecting these two systems.
This is a simple blockchain use case solution where both the airport and airline benefit. Below is an example of a HyperLedger blockchain infrastructure. We will only focus on the Airlines and airports. With the set up below we can quickly and easily connect Airports to various Airline partners to self service kiosks where passengers can scan IDs and boarding passes. Connecting the airline infrastructure with the airport infrastructure allows for added benefit to both parties.
Through the system above both parties can track various data points on their passengers. The airport can increase revenue by getting passengers to shops quicker, increase security and begin to implement self service security lines. The airline has the added benefit of knowing when each passengers on their flight crosses security and can retrieve more information.
Second Half of the Story
Knowing the location of your passengers at any given point of time can allow all parties to be more efficient in their day to day operations. On average the airport will make $9,500 for each plane landing. Having the connected infrastructure to land, load and take planes off at an improved rate will directly increase revenue and tarmac times.
Flying on a plane today is not the luxury that it was once marketed to be either. Services which once were complimentary are now being charged and consumers are very aware of this. Services offered have to be valuable to the consumer.
Looking into the economic breakdown of air travel. The majority of revenue comes from any other class aside from economy class. The flyers in the back half of the plane bring in a total of $550k and these are are also likely to be the airlines frequently flyers. They will normally and traditionally spend regularly on the airline. New business models need to be made and created to provide value and revenue from the greater populace on the airplane. That is the economy class.
Airline Reward Programs currently primarily cater to the back half of the plane, the loyal customer who will fly a particular airline because they have tons of airlines points. This is a dependable returning customer, you have his business increasing revenue in the economy class seems like a natural step forward.
This is 70% of the Flying population. Having these customers be returning customers make economic sense over the long term especially if they are more likely to purchase value add offerings. Generally these passengers pick an airline blindly and purchase a ticket primarily based on price. We need to provide value to this customer for them to return.
Bringing these customers into the airlines reward program ecosystem makes sense, but the reward program ecosystem at the same time also needs to be more robust and inclusive. Most airline reward programs are built on top of outdated and traditional infrastructures. Blockchain reward program solution is a natural step to upgrade these outdated systems. The benefits of blockchain is the ease of use, the ability to spread the spend-ability of a reward to increase partnerships with airport shops and even shops outside of the airport such as hotel partners.
Next Generation Travel Scenario
Let’s paint a picture. Sara is excited to fly to Germany (CGN) next week. She signed up for her Airlines reward program and it was a breeze to do so. She doesn’t fly much but she has 1,000 airCoins to spend for her flight. Thanks to the wonderful offerings in her Airline Reward Program app she has no trouble finding things to purchase.
She needs a neck pillow for her long flight from JFK Airport and her app has a listing of stores which accept airCoins at the airport but she is most interested in Neck Pillows Depot which is next to her gate. A new neck pillow costs 500 airCoins and she is happy to pay it now and pick up while she is shopping at her gate.
Browsing all the information her Reward Program App provides she notices there is a listing of all the drink service times as well as food service times. She notices drinks will be disbursed a total of 10 times throughout her flight. She likes drinking water during the day and tea before bed, she inputs her choices into the app and decides to spend an extra 100 airCoins for a mixed drink before bed to make sure she sleeps well on her flight.
At this time Sara also chooses her dinner. She will be driving from out of town and she knows she will be tired and hungry when she boards. She chooses to pick the Steak dinner for 400 airCoins as her first meal and chooses the Bacon Egg and Cheese for 300 airCoins with an espresso for 100 airCoins for breakfast. She is thrilled and excited for her trip and surprised how easy it was to personalize to her needs.
Sara arrives at the airport and realizes there is an offer for real-time luggage tracking for 100 airCoins she wants to make sure her luggage gets to her when she arrives and this information is valuable to her. She checks her bag at the Kiosk dispensing an RFID tag which will track her luggage as it is relocated and is credited 100 airCoins.
Sara makes her way to the Automated Security Screening Area and scans her ID and mobile boarding pass. Everything goes well and she is through in under 20 minutes.
Sara has just enough time to explore the airport shops and pick up her neck pillow. She naturally goes to her gate first with her carry on luggage. She notices the airport offers a locker for 50 airCoins to store her carry on luggage so she can shop freely. Putting her bags in the locker she goes to Neck Pillow Depot, picks up her chosen neck pillow and buys a pair of ear plugs and sleep mask for the flight for and additional 150 airCoins.
Sara continues to window shop, losing track of time, her phone rings and she notices that her time to board is in 10 minutes. She walks back to her gate, picks up her luggage at her locker, says hello to the stewardess and shows her boarding pass. Thrilled that there are no lines Sara makes it to her seat in no time and no hassle.
In this scenario Sara spends a total of 1,300 airCoins on her trip, remember that she only had 1,000 to spend from the Airline Points. She was credited an additional 300 airCoins for her spending.
When Sara’s plane arrives, it is now tomorrow. After some time she receives a notification from her credit card company that she was charged by her Airline for her credited airCoin purchases throughout her travels.
She arrives well rested, well fed and very happy about her personalized flying experience.
We have a couple of advantages in this system, by knowing what Sara will need prior to her boarding we can bring only what we need on board. Knowing what Sara ordered this flight, we can further personalize her future flights and other customers experiences.
We can create a new way of connecting and interacting with both flyers and our business partners. Currently, there is a lot of rigidity in the way flying occurs. The main goal is to put in place a system that makes flying safe, enjoyable and as quick as taking a train to your destination without sacrifices.
Airlines already provide mobile apps, but besides the current flights departure, looking up future flights, our flights gate, and electronic boarding passes these apps do not offer much utility past that and end up becoming yet another icon on a users phone. This information needs to be open and accessible by anyone. By making this information open airlines need not worry about the development just that the passenger receives the information that they need.
Two weeks ago I signed up for a reward program and I’ve already lost access to my account. I have forgotten my AIrline ID and Reward Number and I am not positive what my password is. If a customer is on your next flight, they should feel the necessity to have your app because of the utility and insight it provides to them.
Building a network that offers this utility and usefulness doesn’t have to be difficult. Let’s dive into the network infrastructure on how how this can become a reality.
AWS Cognito offers a crucial key piece of of connectivity to the passengers Social Media profile. I can assure you, a passengers Facebook Account & Password is more secure then their Airline reward program account and they remember this password. What is more crucial is that a passengers information is already here and we just retrieve for them. We can use this to remove the hurdle of creating and signing up for yet another account that the passenger will lose access to. Flying should be a social experience, not a sit and wait experience.
Let’s dive into this network. For this demo I have chosen to the use the Node JS runtime environment. Node offers a robust set of libraries and code making development quick, reliable and secure for blockchain as well as the Token Economy.
For Tokenization here we have chosen to work with the Stellar network. Stellar also provides a robust community of developers coupled with both industry as well as public investment. Stellar most importantly offers an extremely flexible ledger system coupled with simple and effective to consume APIs.
Through this we can create a Token while maintaining a secure ledger with very little overhead on our end. As a proof of concept, i have created a coin called airCoin. Currently, there are 1 million airCoins in circulation and anyone can purchase these coins.
The 1 million airCoin was a choice made by me. These rules are flexible. It is beyond the scope of this video to get into Token Economics but this certainly is a conversation to have. We can have a token with, lets say, 2% annual inflation rate. We can also have unlimited Tokens.
We are in full control of these tokens but everyone using these tokens is aware of the rules, and that is very important for pricing. There are no surprises. airCoin cryptocurrency that we control.
For this demo, I have chosen Mongodb as the database of choice but can easily be substituted for HANA. Common misconception is once you have blockchain everything is saved on the blockchain. This is a misunderstanding of the technology. Application Database are still desirable for traditional data structures, this is also proven technology and cheaper to host.
What makes this system more advantageous than traditional reward programs is the flexibility and how easy we can move value around. It is easier to trade and provide value on these tokens. The market knows and understands that there are 1 million airCoins in circulation so there is limited supply. The networks and APIs are easier for business partners to consume, the transaction flow is easier to follow. Simply put, it is just easier to transact with a system like this than a traditional reward program. It was built for this.
Having a central repository in hyper-ledger for boarding where airlines and airport security can access relevant information we can transform air travel. We can implement this system and start thinking about an automated airport security system vastly improving air travel efficiency. We can eliminate the two hour prior to boarding requirement.
Our main blockchain of choice is hyper-ledger. Hyper-ledger offers a robust community of developers and is the industry standard for business blockchains.
Hyper-ledger provides a great central repository for any industry, but especially air travel. We have multiple partners communicating and working together needing to share information. Hyper-ledger can facilitate that information flow while still providing security. Providing real time notification services if you belong to a channel. For example when a ticket is purchased naturally the Airline is aware, but we can notify the AirPort of this purchase as well our business partners and vendors which provide services.
Channels are literally blockchain ledgers, so if you notice the red ledger, despite having other parties in this network, since the Airline and Airport belong to the red ledger only they will receive information relevant to that ledger. Belonging to a channel means you maintain a copy of that blockchain.
If you notice the green channel, all parties belong to this channel. This is information that all parties need to consume and act upon, so they all are notified in real time of any transaction that happens on this channel.
On top of a channel sit Smart Contracts or applications. For the green channel we can write a smart contract which interacts with all the parties involved current systems.
For the red channel we can write apps that interact with the Airlines and Airports current system and not notify other parties. Offering a robust, secure and connected IT infrastructure.
We are not seeking to uproot, rewrite and recode existing IT infrastructure. We are talking about connecting the existing infrastructure to facilitate the sharing of information across multiple interested business partners. Reducing lead times, increasing efficiency and making faster and more accurate business decisions.
The network diagram is put in practice through a simple demo. The only missing piece is AWS services. The hyper-ledger node exists with a boarding pass smart contract application, we are connected to the Stellar Test Network for token exchanges and we have a Mongodb instance for data store.
You can go to the demo above and create a new passenger, and by doing so you can see which networks we are interacting with. You will be receiving from the stellar network as well as save our user in our database. In this example every new passenger is given 10,000 coins Now we can purchase a ticket through this network with reward points.
In the demo you can purchase a ticket. Purchasing a ticket requires more steps. We will pull the passengers data from the database. Create the boarding pass in Hyper-ledger system and finally interact with the stellar network to exchange airCoins for a ticket and finally save relevant information on our database.
In the demo you can also purchase food for your flight. Buying food and beverages is cumbersome on an airplane. You are in tight quarters and your wallet may even be in the overhead compartment. Through this system it is simple. We can do everything through a mobile app and be charged at a later date. Giving the passenger the decision to tell us what they want prior gives the Airline the ability to bring on board only what is needed.
Check In Luggage
Checking in luggage is always cumbersome. We can build a process which is not. We can have drop off stations and secure luggage check in dispersed through the airport. The most natural place for luggage check in is in a parking garage. It is the closest location from your car and the airport. This can be a service provided for a fee possibly. These are small value propositions that are valuable to passengers.
The current fee structure of charging for luggage, charging for overhead space or charging for what once were complimentary is price gouging. Even if your Airline does not partake in these practices it hurts the image of the industry as a whole and it does not have to.
In the demo you can also view all the data from the various networks. Create a user and interact with the demo to take a look at the raw data. In our app we are keeping track of the reward program information, a unique ID and the travelers trips. Drilling deeper we can see the travelers food and drink orders. We can also see the travelers luggage as well.
In stellar we have much more information, but what we are concerned about is our balance. We are also concerned about our Transactions. We can drill down into our purchases and information. We can see when we spent our coins and who the recipient was. For complex transactions we can dive deeper. We can take a look and see which accounts was debited and which accounts were credited. Tracing information throughout the entire purchase and further.
In Hyper-ledger we have the travelers boarding pass data which is accessible to the security agent as well as the Airline and anyone else who may have an interest for this boarding pass information. We are also keeping track of the travelers luggage. This is because both the Airline and the Airport have a vested interest in sharing information on where the passengers luggage is throughout the trip.
We have covered a lot and I thank you for taking the time to view the presentation. I hope I have provided an educational experience as well as a foundation on blockchain technology and how it may affect your business and your industry. This technology is about fostering business relationships and information sharing. We can improve the efficiency of checking in passengers to cut down on security lines.