Cleared for take off: blockchain in aviation

What is blockchain?

Blockchain is a decentralised and distributed ledger technology that underlies various applications, such as cryptocurrencies like Bitcoin. It operates as a secure and transparent system for recording and verifying transactions across a network of computers.

Conceptually, a blockchain is like a giant digital notebook that everyone can write in and access, but no single entity owns or controls it. This is a way to keep track of transactions and information in a secure and transparent manner.

At its core, a blockchain is a chain of blocks and each block contains a list of transactions. What makes it unique is that once a block is filled with information, it is linked to the previous one in the chain, creating an unbroken and tamper-proof record. This chain is maintained by a network of computers, or nodes, across the world.

Every participant in this network possesses an identical copy of the entire chain. When a new transaction occurs, it is broadcast to the network. The computers then validate and agree that this transaction is legitimate before adding it to their copy of the chain. Since every operator has the same information and the blocks are linked, it becomes impossible for anyone to alter past transactions without everyone else noticing.

Another key feature of some blockchain networks (e.g. Ethereum) is the ability to deploy smart contracts. These are self-executing programmes, designed automatically to perform certain actions once certain conditions are met. This could include anything from releasing payment in a transaction to triggering specific events, all based on pre-defined rules written into the smart contract code. A smart contract essentially takes the "if-then" logic we use in everyday life and turns it into a digital, automated and tamper-proof process.

In summary, the key features of blockchain are:

• Decentralisation: no single entity controls the entire blockchain, ensuring that no single point of failure exists.
• Transparency: all participants in the network have access to the same information, making transactions visible and traceable.
• Immutability: once a block is added to the blockchain, altering its contents is impossible, ensuring the integrity of the recorded information.
• Smart contracts: contracts which execute themselves once a set of rules is met. They automate processes based on the fulfilment of conditions.

Why does this matter for the aviation sector?

Supply Chain Management

The supply chain for the manufacture of an aircraft is very complex. This process involves many parties and thousands of raw materials sourced from different countries that come together to create the final product. Traceability of components is key in the supply chain, especially when it comes to safety critical components. This is important at all stages, from the initial assembly of the aircraft to the continued maintenance over its long lifetime.

From the start of the process, each component can be assigned a unique digital identity which is recorded on the blockchain. This allows stakeholders to verify the authenticity and provenance of parts that originate from different suppliers across the world. This improves compliance with safety regulations and mitigates the risk of counterfeit components from entering the supply chain.

Streamlined Maintenance Processes

Maintenance activities are usually documented manually by technicians and engineers. These records are often stored in paper-based logbooks or electronic databases managed by individual stakeholders. This means that airlines, maintenance providers and regulatory authorities have limited visibility into each other's maintenance activity records.

Maintenance logs, repair records, part replacements and service reports can be securely stored on the blockchain. This ensures that airlines, maintenance providers and regulatory authorities have access to the same, accurate and up-to-date information. Automated smart contracts can also be programmed to trigger notifications for scheduled inspections or repairs, enhancing operational efficiency.

Flight Operations

While current flight operation processes are well-established, the use of blockchain technology can help mitigate challenges relating to transparency and efficiency. Airlines, airports and regulatory bodies can use a shared blockchain platform to store and retrieve information like flight logs, crew certifications, airworthiness certificates etc. This streamlines processes and also ensures the accuracy and reliability of data fundamental to flight operations.

By securely sharing flight data, weather information and airspace availability with airlines, airports and air traffic control authorities, blockchain can facilitate route adjustments and optimise fuel consumption. This can enhance communication and coordination among parties due to unforeseen events such as weather disruptions or airspace congestion.

Barriers to Adoption

Despite its potential benefits, blockchain adoption in aviation faces several challenges, such as:

• Regulatory uncertainty – the aviation industry is a highly regulated environment. Integrating blockchain technology would require compliance with existing regulations and industry standards. Given there are currently no regulations surrounding the use of blockchain technology in aviation, integration would be complex due to the uncertainty involved.
• Interoperability issues and costs – seamless integration with existing systems and compatibility with different blockchain platforms can be expensive and time-consuming. Companies would likely need to hire specialised developers and consultants to customise blockchain solutions to ensure they are compatible with legacy systems.
• Lack of knowledge – research suggests that one of the biggest challenges to blockchain adoption is a lack of knowledge. Blockchain technology is complex and requires specialised knowledge to be implemented effectively. Without appropriate investment in training, it is difficult for companies to realise the full benefits of this technology.

Striking a balance between embracing innovation and overcoming these challenges remains a delicate task in a landscape where blockchain remains unregulated and underutilised.

What's on the horizon?

While barriers to its adoption exist, blockchain technology holds immense potential to benefit the aviation sector by offering innovative solutions to some of the sector's longstanding challenges. By embracing and implementing blockchain technology solutions, airlines and key industry players can unlock new opportunities, whilst maximising efficiency, transparency and safety.

Our prediction is that in 2024 the industry will see growing adoption of blockchain technologies. You can see the rest of the aviation predictions for 2024 here.