On Tuesday, S7 Airlines announced that it has managed payments totalling over $1 million in July through its blockchain platform. The system was built with Alfa Bank to settle transactions between travel agencies and S7 using distributed ledger technology (DLT).
With its decentralized platform, the airline claims that payments are faster, require less paperwork, and are more secure. S7 and Alfa Bank built the system on a private blockchain using the Ethereum protocol. It mentions it is now also using the Hyperledger Fabric framework.
Nikolai Mukhanov, S7’s Techlab Executive Director, said: “The number of operations is growing every month. Since January, the amount of payments made on the blockchain platform has grown tenfold.”
“In addition to the number of transactions, the number of other processes that we try to automate on our platform is also growing. This was largely made possible by the Hyperledger Fabric platform, which not only provides stable network performance, but also allows us to safely and privately store data of different members,” he continued.
Alfa Bank, too, praises the technology: “The good results of our project with S7 Airlines shows that the blockchain technology creates value and is largely decisive for the B2B market,” said Pavel Ryazanov, the bank’s Director of Transaction Business.
“Agents left behind the guarantees and deposits, reduced transaction costs and now can make payments 24/7. We see great potential in the use of smart contracts and external business logic in accounting and paperwork in various sectors of the economy,” Ryazanov explained.
In the future, S7 plans to launch the blockchain network online and comply with new data standards, as revealed by the airline’s Sales Director Ekaterina Dmitruk. The NDC Standard, launched by the IATA, aims to make communication between aviation firms and agencies smoother by using standard data types.
S7 was the first to sell a plane ticket on a blockchain-based platform back in 2017. Last year, it was again the first airline to refuel a plane using smart contracts. The firm’s refueling project, with Alfa Bank and Gazpromneft Aero, uses blockchain to manage the agreement between the fuel supplier, airline, and pilot. S7 additionally utilizes smart contracts for letters of credit.
There are many other initiatives in aviation, including startup Blockskye’s project for airline transactions. Meanwhile, Winding Tree runs a blockchain travel network on Ethereum, which boasts Air Canada and Air France-KLM as members.
Alfa Bank is also active in several blockchain initiatives. It’s a member of the Marco Polo trade finance consortium. Three months ago it participated in the Voltron Letters of Credit trial. And it’s also one of the banks in the JP Morgan Interbank Information Network (IIN).