Yesterday Airlines Reporting Corp (ARC) announced that United Airlines has completed a proof of concept (PoC) for the reporting and settlement of airline ticket sales. ARC is one of the main US payment and settlement service providers, connecting airlines with travel agencies. It settles more than $86 billion in transactions between airlines and travel agencies per year.
The PoC involved an end-to-end test using ARC’s private blockchain to track the transaction life cycle of a ticket sale from issuance to settlement, using smart contracts for transaction modifications.
“In the case of direct or indirect ticket sales, we believe blockchain has the potential to provide a secure, distributed and immutable transaction record that will improve upon business processes that exist today,” said Dickie Oliver, ARC’s VP and CIO.
ARC is a logical user of blockchain because it acts as a bridge between airlines and travel agencies. While some expect blockchain to disintermediate companies like ARC, often those very companies are likely to be the ones to deploy it. ARC also provides data about 60% of the world’s airline transactions as well as servicing corporate travel departments, which is the blockchain focus.
Blockchain aids travel expense reporting
The next step is a pilot with one of United’s corporate customers. If that succeeds, then ARC will roll out the capability to other airlines.
Jeff Christensen from United Airlines explained that the PoC enabled it “to simplify the payment and booking process for the corporate travelers and their employers. Time-consuming processes such as receipt collection for expense reports can be greatly improved.”
For the proof of concept, the company partnered with Blockskye a dedicated travel platform which uses a private, permissioned version of Ethereum.
Brook Armstrong, CEO and co-founder of Blockskye, explained that any transformative technology change in the industry needs to engage ARC “because ARC leads the way at the epicenter of the U.S. settlement system.”
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.