S7 Group was one of the first companies to introduce blocking

The remaining major Russian carriers do not want to deal with this technology yet.
In July 2017, S7 Group together with Alfa-Bank held the world's first sale of the air ticket through the block-platform platform. And S7 is one of the first airlines in the world to start implementing this technology, say the manager of a major European airline and an employee of the Russian office of the International Air Transport Association (IATA).

Blokchein allows you to significantly optimize business processes, automate the scheme of mutual settlement, said Deputy Director General of Information Technologies S7 Pavel Voronin.

Replacement of deposits and guarantees

One of the main applications of blockage in aviation is the distribution of tickets through an agent network. The company uses so-called smart contracts - they ensure the closing of the transaction when certain conditions are met. "Blocking makes it possible to simplify and make the most transparent work with agents selling S7 tickets," Voronin said. "The time from the sale of the segment (one-way ticket to one end." - "Vedomosti") by the agent until the funds are received by the airline is 23 seconds, according to standard procedures it takes 10 days - this time leaves for letters, reconciliation, transfer of funds. "

In addition, agents do not need to receive a bank guarantee or use a deposit to guarantee payment for purchased tickets when using the lock for S7 operation. Since the system at the ticket sale verifies the availability of funds from the agent in the accounts and immediately transfers them to the airlines, Voronin notes. That is, it is an advanced technological tool for direct interaction between an airline and an agent, bypassing intermediaries.

Previously, many agents could not work directly with S7, as they did not have the funds to deposit and could not get a bank guarantee, he continues. Thus, the block system allows to significantly expand the agent network and reduce the receivables of the airline. Total number of agents, including those working through the block, S7 does not disclose.

The block platform was developed by S7 together with Alfa Bank, now agents must have an account to connect to it, but other banks will be added to the platform, Voronin continues. Automate and simplify the processes with the help of this platform can companies that are not related to aviation and have no relations with S7, such applications are received a lot. While it is difficult to say whether this can become an independent business line in the future, now S7 takes payment from such companies for operations through the block.

"Blocking is effective for optimizing interaction in branched b2b-systems, where there are a large number of counterparties and buyers. The technology helps to link sales and mutual settlements with agents in real time, provides the transfer of funds in real bank accounts in 24/7 mode, "said the head of the Innovation Development Center of Alfa Bank Denis Dodon. Blocking, he said, helps reduce operating costs by eliminating unnecessary and duplicative processes.

Paper is not needed

Another direction for the use of a detachment is the maintenance of aircraft. "The history of service and confirmation of the authenticity of parts are critical to safety, the maintenance of the component of the ship is stored mostly in paper form, and there is a risk of their loss, and recovery is problematic and requires considerable work," continues Voronin. S7, he said, began to develop a special platform for tracking spare parts with the help of a blocker: the point is to connect to the platform all companies whose information is needed to track the origin of the details (manufacturers, airlines, maintenance providers) - this project is on the initial stage.

The biggest aviation group in Europe - Lufthansa Group - is also engaged in blocking. In October 2017, Lufthansa reported that it hired the Swiss company Winding Tree to develop a b2b platform for blocking technology: through it agents, even small and inexperienced in the tourism sector, will be able to directly access airline and hotel reservation systems, avoiding thus intermediaries.

"Within the framework of cooperation with Winding Tree, we expect to get the first results within a few months, but we assume that it may take more time," says Lufthansa spokeswoman Boris Ogursky.

Lufthansa is also developing a platform for aircraft maintenance. In 2016 the company launched Blockchain for Aviation (BC4A) initiative to accumulate experience and fix opportunities for using blockade technology in aviation, Ogursky continues. The main goal is to unite all possible participants and jointly explore the potential of this technology, these developments are of interest to aircraft manufacturers, ship repair and maintenance service providers, software developers, logistics companies, landlords and regulators.

Ogursky and Voronin do not say how much their companies are investing in the blockhouse. "The effectiveness of investment at an early stage in the development of innovation is measured not only in terms of the financial benefits of a particular project. We are firmly convinced that the blockage will be widespread in the long term, so we should develop approaches to its application, "Ogursky said.

Other leading Russian airlines are not engaged in blocking operations yet.

"Aeroflot" considers the technology of blockade to be promising, but not yet decisive for the aviation industry. For its practical use, a developed infrastructure is needed, which involves the participation of many counterparties, "says a representative of Aeroflot. "Technologies are still in the stage of formation and piloting, it is difficult to talk about significant benefits for airlines."

"Blocking is effective in distributed systems where transaction verification is necessary," the president of "Utair - passenger airlines" Pavel Permyakov told the press service. "And the distribution of verification is achieved due to large resources for processing, which sometimes even reduces the speed of transactions." But in aviation, "the speed of response and the minimization of resources is more important than the distribution of verification, so for the time being we do not see any significant advantages from this technology." "Ural Airlines" also do not use blockage, the company spokesman said.