S7 Airlines – one of the largest and most respected airlines in Russia – is reaping a number of business rewards after developing its own blockchain platform for ticket sales.
In July 2017, S7 Airlines used the platform to sell the first airline ticket over blockchain technology to a client from Russia. The private blockchain was built based on the Ethereum protocol.
The introduction of the platform has enabled S7 Airlines to reduce its paper usage and increase the speed of its workflow processes while at the same time guaranteeing the reliability of operations.
S7 Airlines and blockchain
S7 Airlines is one of the first airlines in the world to use blockchain technology in order to increase profits and provide customers and partners with the best service.
The use of blockchain has been yielding amazing results for the company, and since the beginning of 2019, S7 Airlines has sold around £4 million worth of tickets using the platform.
S7 Airlines’ blockchain platform is not only used for settlements with agents and ticket sales. In 2018, S7 fueled the first aircraft using blockchain technology.
In just 60 seconds, documents were transferred and funds were debited between the fuel supplier and S7 Airlines without the need for any third parties.
Blockchain technology has enabled the company to significantly optimise business processes and automate mutual settlements schemes for customers and partners.
S7 now holds a leading position in the aviation market thanks to the help of blockchain and innovative technologies.
S7 Airlines and Alfa-Bank
The blockchain platform was developed by S7 in close collaboration with Alfa-Bank.
Alfa-Bank is one of the largest private commercial banks in Russia. It was the first Russian bank to join the R3 blockchain consortium.
R3 is a consortium of the world’s largest banks, financial institutions, national financial regulatory authorities, trade associations, and lenders. Its members are united in the goal of developing and driving the adoption of distributed ledger technology.
Alfa-Bank provided customers buying S7 tickets using the blockchain platform with additional benefits via its electronic banking system Alfa-Business Online.
“The high efficiency of our project with S7 Airlines shows that blockchain technology creates value and is largely decisive for the B2B settlement market,” said Pavel Ryazanov, head of the transaction business of Alfa-Bank.
“Alfa-Bank will continue to develop this area together with S7 Airlines.”
At the time of writing, all clients must have an account with Alfa-Bank in order to connect to the S7 Airlines blockchain platform. S7 claims that other banks will be added in the near future.
The future of aviation and blockchain
One of the main areas of application for blockchain technology in aviation is the distribution of tickets through a network of agents.
S7 Airlines uses smart contracts as they automate the closure of a transaction under certain conditions. The system works quickly and provides transparency for all participants in the transaction.
With smart contracts, it takes only 23 seconds from the time of sale for the funds to be received by S7. Standard procedures can take up to 10 days to fully transfer funds.
Agents are directly connected to the blockchain, meaning there are no intermediaries and money is transferred directly to S7.
Agents do not need to receive a bank guarantee or keep a deposit with the airline in order to guarantee payment for tickets – the system itself checks the availability of money from the buyer and transfers it to the carrier.
The number of transactions on the platform is growing monthly. Since January, the volume of payments through the blockchain platform has grown 1,000%.
In addition to the number of transactions, a growing number of different processes are being automated on the platform.
Previously, many agents could not work directly with S7 because they did not have the funds to make a deposit and could not get a bank guarantee.
The use of blockchain has significantly expanded the company’s agent network and the cost of tickets has become much lower, increasing the company’s sales.
According to experts, the annual turnover of the platform over the next two years could grow to £4 billion.
Read more about blockchain with Coin Rivet here.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.