Airline Group Adopts Blockchain To Circumvent Entrenched Distribution Systems

A new Blockchain experiment by Airlines Reporting Corps could lead to more efficient distribution alternatives to circumventing the global distribution systems.

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A potential bypass of distribution incumbents will happen soon to be very clear. The demise of global distribution systems like Amadeus, Sabre, and Travelport have been predicted prematurely for more than twenty years now. Also, they make up a large part of travel commerce online and offline and on a global basis. They are not going anywhere soon despite the intermittent disruptions.

The announcement

The Airlines Reporting Corp, ARC based in the United States announced that it fielded a private Blockchain proof of concept this week. They did so with Blockchain solutions provider Blockskye and United Airlines. Using Ethereum technology through Blockchain, United and ARC reported and settled ticket transactions of United Airlines.

ARC vice president and chief information officer, Dickie Oliver, says the organization makes use of relational databases, which tie into front-end applications to handle transactions such as ticket modifications. Next, ARC sends reports to customers and exchanges information through application programmable interfaces.

Blockchain to streamline and democratize the process

Oliver said,

We provide a ledger-based solution that ensures the highest level of data quality because nothing gets on the blockchain unless everyone participating on the chain agrees that a new transaction is legitimate… Our customers will have instant access to transactions on the blockchain and can work with those transactions through their own systems.”

He also said that the Blockchain could offer travel agencies corporate and leisure, easier access to better quality data where it is agreed that the airline and the agency are searching for the same data.

Managing director of distribution as well as ancillary piecing at United Airlines, Jeff Christensen, said the proof of concept, when implemented, could save business travelers some time when taking receipts for expense reports to make them more productive.

Oliver of ARC added that when providing travel agencies and airlines with access to high-quality data, “we believe that airlines will have access to more efficient and cost-effective distribution alternatives that will be advantageous to corporate customers, as well. The use of smart contracts on the blockchain will also drastically reduce the reconciliation efforts that exist today between all parties.”

Different travel industry sectors are adopting Blockchain to gain an edge on distribution. Airlines like Lufthansa, Travelport, global distribution systems and operator TUL group are planning to use Blockchain to streamline and make travel distribution for travel.

Fritz Joussen, the CEO of TUI group, made waves two years ago and he argued that Blockchain removes monopoly of some platforms.

Impact of this technology

This ARC Blockchain and other similar initiatives can impact the sector in so many ways. The American Society of Travel advisors said,

If ARC can successfully record and settle transactions using blockchain in the future, it would be faster, more secure and more efficient… This would apply across the board to agencies of all shapes and sizes using ARC’s settlement and payment products.

It does not matter whether it is a home based agent who sells luxury vacations or big names in travel management. The travel trade advisor group says agents are not going to be able to see the transaction being settled through traditional means of Blockchain.

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