Blockchain technology adoption is gradually gaining global momentum as companies, governments, multinationals and business alliances seek to seal existential loopholes in the management of goods and services across borders.
And now, key global aviation industry players have announced the launch of the Maintenance, Repair and Overhaul (MRO) Blockchain Alliance, the first industry-wide investigation into the use of blockchain to track, trace and record aircraft parts.
The new alliance comprises leading organizations covering every aspect of the MRO chain, from part manufacture and repairs to logistics and smart contracts.
A smart contract is a digital pact containing the terms of agreement between a buyer and a seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralized blockchain network. The code controls the execution, and transactions are trackable and irreversible.
Members currently include Bolloré Logistics, Cathay Pacific, FLYdocs, HAECO Group, Ramco Systems, Société Internationale de Télécommunications Aéronautiques (SITA), and Willis Lease Finance Corporation, supported by Clyde & Co.
The alliance, first mooted in 2019 at a HAECO Group event, aims to bring the various stakeholders together to set a global standard around the use of blockchain to trace parts.
“In the coming months, our alliance will launch a proof of concept to demonstrate the use of blockchain to digitally track and record the movements and maintenance history of parts across a wide number of players,” reads a statement seen by Business Daily.
A proof of concept is meant to determine the feasibility of the idea or to verify that the idea will function as envisioned.
These include airlines, lessors, original equipment manufacturers (OEMs) such as engine producers, logistics suppliers, and maintenance providers.
This tracking information will be vital to managing a complex logistics value chain that can span several stakeholders over the lifetime of each individual part.
“This initiative is part of SITA’s ongoing exploration of blockchain, a technology that we believe promises tremendous opportunity for streamlining the sharing and recording of information across the air transport industry,” says Matthys Serfontein, President of Air Travel Solutions for SITA.
Currently, there is no global database, there is incomplete data sharing, and only partial digitalization.
“The alliance believes that the use of blockchain will simplify and speed up parts tracking while enabling the secure sharing of information between industry stakeholders.”
For the African market, making technologies such as blockchain available on a wide scale will be vital to support the growth and development of the aviation industry.
Africa is predicted by the International Air Transport Association (IATA) to become one of the fastest growing aviation regions in the next 20 years with an annual expansion rate of nearly 5%, yet there are numerous challenges standing in the way of this growth, including inefficient infrastructure and systems.
Technology could enable governments and aviation industry stakeholders in Africa address many of the existing infrastructure challenges.
Most notably, blockchain’s ability to securely store and share information on a digital ledger offers the opportunity for greater industry collaboration throughout the continent and facilitate more efficient decision making.
Statistics multinational PwC estimates that the use of blockchain could increase aerospace industry revenue by as much as 4 per cent, or Sh4 trillion, while cutting MRO costs globally by around 5 per cent.
Savings will be derived from secure document storage, ensuring confidentiality and data privacy, improved insights on repair time and inventory, automated workflows and more efficient record reconciliation.
“The alliance will use blockchain to record and track two separate strands of information for each aircraft part: a digital thread and a digital passport,” reads the statement.
The digital thread provides the real-time status, chain of custody and back-to-birth track and trace of the part over time.
The digital passport – like a human passport – provides the indisputable identity of a part and contains other vital data such as certification of airworthiness to prove ownership.
SITA’s role, as the air transport community’s IT provider, is to manage governance for the global alliance, support the working groups, deliver all required blockchain technology components compliant with SPEC2000 and SPEC42 standards and ensure proper alignment and validation with regulators and international standardization bodies.