First Published on 13th November, 2018
A flight disruption management solution based on blockchain has been worked out by TrustaBit to automate the notification and compensation process in the airline industry.
Blockchain technology isn’t having easy time establishing its use cases in certain disciplines, for instance, in the arena of loyalty. Specialists point out that blockchain paving way for a completely exchangeable currency within various loyalty programs might not be what program managers from the outset would be interested in or even doubt it’s exclusivity in doing certain tasks, for instance, interchanging a loyalty currency into cryptocurrency can be done by another technology. This sentiment came to the fore during the recently held Ai’s MegaEvent in Long Beach, California.
At the same time, blockchain is also being counted upon to sort out specific painpoints in the travel industry. One of them is data reconciliation service in the hotel distribution business, cutting down on losses associated with transaction disputes. Among the other areas, a flight disruption management solution has been worked out by TrustaBit to automate the notification and compensation process in the airline industry.
Saritta Hines, founder and CEO of TrustaBit, spoke to Ai’s Ritesh Gupta about the solution, why the company chose a private blockchain rather than a public blockchain, the status of the offering and lot more. Excerpts:
Can you explain what made you go ahead with the decision to start this venture?
Saritta Hines: One summer, I built an Ethereum mining rig with my daughter. That project piqued my interest the underlying technology of Ethereum, which is blockchain and smart contracts. I began looking for an industry that needed an upgrade and the airline industry came to mind. Travel is a trillion $ industry, yet it is also one of the most antiquated and archaic, so when the idea of using blockchain and smart contracts to automate the flight delay compensation process came about – I knew I was on to something!
What is the problem that your company is trying to sort out? What traditionally has been done to sort this problem?
Saritta Hines: Currently, when flight disruptions occur, there is no streamlined way to receive compensation. Passengers correspond with airline customer service agents, hold for long periods of time and never quite know when they can expect to be compensated. Competing solutions facilitate a back and forth conversation with the airline on behalf of passengers who initiate contact and pay a fee for their services. TrustaBit is different because our customer is the airline, not the traveller. Our solution will be white-labeled and integrated within the airline’s systems to automate and streamline their processes. The passenger does not need to initiate contact or download a new mobile app to receive compensation.
What's your observation around how pain points or even business use cases in travel are being served blockchain as of today?
Saritta Hines: Pain points in the travel industry run the gamut, affecting both airlines and travellers. Airlines have difficulty notifying passengers of flight disruptions in a timely manner and struggle to issue adequate compensation without employing manual processes. As a result, passengers are left frustrated and loyalty wavers. To top it off, airlines suffer losses of $60 billion per year due to flight disruptions.
Why do you think blockchain technology is the best solution to this problem?
Saritta Hines: Blockchain can benefit projects that: have multiple validation and control points within their systems, have multiple actors consuming the data, and if they need to track data quality and data lineage from day one our solution is an optimal use case for blockchain technology as it offers increased security and prevent fraud, which costs the airline industry an estimated $858 million per year.
Can you talk about the technology that is being used by Trustabit?
Saritta Hines: TrustaBit is powered by blockchain, which provides an immutable ledger with one source of truth. Rather than using a public blockchain for sensitive airline API data, we utilize Hyperledger Fabric, a permissioned blockchain. A private blockchain network requires an invitation to be sent out to all network participants so that the business knows who is performing the consensus protocol and who has a copy of the ledger. It establishes trust, transparency, accountability and it does not require mining or expensive computations to assure transactions.
Smart contracts code the business rules outlined by our clients and are written to the blockchain. Once a triggering event occurs, the smart contract executes.
What's the status of your offering, is it live or under pilot phase?
Saritta Hines: Our POC is live and can be accessed at app.trustabit.io. Currently, any combination of numbers can be used as sample data in order to test drive the POC. We are in search of a few pilot airline clients, and are speaking to a few prospects fitting specific criteria, to participate in beta testing.
What according to you are the major challenges for your solution to pick up in the industry?
Saritta Hines: One challenge is implementation. Some airline systems are still using legacy systems. Implementing our solution will not be a one size fits all approach as we will have to be sure our technology is compatible with systems that are currently in place. If this is not the case, we will have to take the necessary measures to make it so.
There have been use cases of blockchain technology, for instance, payment settlement that are active today. Why do you think blockchain is often criticized? Isn't there overestimation of what all blockchain can do?
Saritta Hines: As with any new technology, we will see phases of innovation and early adoption leading up to more widespread adoption of blockchain. The internet is an example. During the .com era, the internet was full of things like cat videos and perceived as a breeding ground for spam and scammers. Similarly, the perception of blockchain has been that it is largely used by criminals. This notion is beginning to fade as more fortune 500 companies begin to employ new use cases for the technology. I believe that as we learn more about the power of blockchain, the early critics will join us as blockchain enthusiasts! I am not sure there has been an overestimation of what blockchain to do. Quite to the contrary, I believe we are yet to see its true potential. This technology could very well change the way we live.
What are your expectations from blockchain technology going forward?
Saritta Hines: I believe the future of blockchain will bring some of the more antiquated industries into the digital age. I have seen the perception of blockchain grow tremendously. A few years ago, most people only associated blockchain with the “dark web” and criminal activity. Now, enterprises are curious about blockchain use cases and are looking for ways to incorporate the technology into their systems. I have also even seen companies implement low code methods to develop smart contracts that can be used on multiple blockchain platforms.
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