Today Airlines Reporting Corp (ARC) announced its first venture investment in blockchain startup Blockskye. Last year ARC settled $94.8 billion in ticket transactions between airlines and travel agencies for 295 million trips.
The two companies worked together last year on a Proof of Concept for United Airlines. “Our recent collaboration with Blockskye, a major U.S. airline, and one of their largest corporate accounts makes us optimistic that there are near-term use cases for blockchain that drive strategic benefits and pull these already close relationships even closer,” said ARC President and CEO Mike Premo.
Blockskye aims to use blockchain technology to help to make transactions more efficient and hence increase airline margins. The Blockskye website highlights the significant operating margin differences between airline intermediaries and aggregators (20-30%) compared to the airlines themselves (10-15%).
“Blockskye is turning to ARC to provide marketplace leadership, carrier neutrality and trusted governance for new distribution strategies among ARC’s airline members and customers,” said Jerry Behrens, Blockskye’s chief relationship officer and co-founder.
The company says that “vendors should have full control over their own inventory — including how it’s booked, modified, updated, cancelled, bundled, and commissioned.”
Two of the co-founders, including president Michael Share, have worked for more than five years at travel agency Travel Leaders Corporate.
Share commented: “Valuable corporate customers are increasingly demanding new ways to book and account for travel. We are focused on doing better for corporate buyers — and our partnership with ARC is a big step forward in that direction. Corporate buyers, TMCs [travel management companies] and airlines all win.”
The company uses a private permissioned version of the Ethereum blockchain.
Blockskye’s co-founder and CTO is Kieren James-Lubin, President & CEO of BlockApps and son of ConsenSys founder Joseph Lubin.
Major travel blockchain projects
In October IBM announced a blockchain partnership with Travelport. The B2B travel marketplace processes $83 billion a year in travel spend. Their initial project is to use blockchain to integrate specialist travel excursions into booking platforms which might otherwise be too low volume to justify.
Winding Tree is another blockchain startup that’s making some progress with airlines. It’s signed up several European airlines such as Air France-KLM, Lufthansa and Swiss Air as well as Air New Zealand and more recently Air Canada.