Air France-KLM: blockchain is not buzz, it’s taking off

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When Iris Taguet first put the possibilities of blockchain technology on the table of senior IT people back in October last year, ears were certainly pricked.

But, says Taguet, who is now Air France-KLM’s head of blockhain programme and will be speaking at EyeforTravel Amsterdam, they were also worried that it might be a bit too early to move.

They had a point – at the time there were hardly any “official” announcements from airlines about blockchain projects. But Taguet, who has been with the group for 13 years, the past three years in its technology innovation arm, was convinced they should do something. “Admittedly, it was ‘a bit early’,” she says, but “I thought, for once it might be nice that we are early!”

Her perseverance paid off. By the end of 2017, she was called on to make a presentation on the potential for blockchain to a group of C-level executives, including (now former) Air-France KLM CEO Jean-Marc Janaillac.

Janaillac was convinced, and when you have the backing of the CEO things move quickly.

However, before officially launching a programme, and on request of the IT department, Air France-KLM first worked with Boston Consulting Group to get an external view on the potential for a still nascent technology.

By May, the ‘blockchain strategy programme’ was green lit and a ten-strong team is now working across the airline and all its subsidiary businesses to convince people of the use cases.

This is proving less difficult than expected.

Taguet, who will be speaking in Amsterdam, explains:

“The way we work is that we actually build a blockchain in our presentation so that we make it very easy and simple for people – especially non-technical people – to understand. Most of the time there are ideas, which is really cool. They go from knowing nothing about blockchain, aside from the fact that the price of bitcoin is going up, to coming up with [concrete] potential use cases.”

In Taguet’s view, there are multiple use cases for blockchain in the airline industry. The main reason, she argues, is that airlines do not work in isolation. Instead they operate in a world of multiple organisations – from the global distribution systems (GDSs) to IATA, travel agents, airport, government, suppliers and more. “Within that ecosystem there are some that are dominant, like the GDSs and this is where we believe that blockchain can be a leverage,” she says.

While Taguet acknowledges that the group is never going to get rid of GDSs “because they are completely embedded in all our processes,” there is no reason not to explore alternative distribution models. In this, she believes blockchain has a role to play. On this score, Winding Tree’s decentralised travel platform, which German airline Lufthansa is backing, remains a work in progress but one that Air France-KLM is watching closely.

Use cases

Air France-KLM has identified numerous use cases across all three of its main business units – namely passengers, cargo and engineering & maintenance. In all areas of the airline business, from passenger identity to cargo management and finance and settlement, one of the biggest issues is ‘trustability’.

Blockchain’s ability to deliver trust at scale is something that Taguet hears often at industry conferences like EyeforTravel Amsterdam. However, experimentation shows that this really is where blockchain has power to deliver. “What blockchain does is really changing the way we transact by removing the need for trust,” she says.

It is still very early days and AirFrance-KLM continues to explore viable use cases in two ways.

On the one hand, the ten-strong in-house team is working with external “blockchain tech partners” to experiment at the proof of concept level. By doing so, Taguet says they are building the in-house team’s expertise.

However, it is also looking at opportunities for industry wide collaboration. Through communication at various forums, such as EyeforTravel Amsterdam, by talking to SkyTeam Alliance partners, industry bodies such as IATA as well as other airlines and blockchain start-ups, Air France-KLM is proactively considering use cases for a still nascent technology.

So far, acknowledges Taguet, Lufthansa seems to be the most advanced. Aside from throwing its weight behind Winding Tree, Lufthansa’s Innovation Hub has recently announced an ‘aviation blockchain challenge’ with tech firm SAP to appeal for start-ups to come forward with big blockchain ideas.

While Air France-KLM and Lufthansa are not working together yet, the door is not closed. Taguet says Air France-KLM is open to conversations with other airlines if it comes across a blockchain use case that it thinks can benefit the wider industry.

So, the blockchain experiment continues. “At the experimentation level you need to find the right partners, the one’s you already trust, the ones you want to do business with,” says Taguet.

Ultimately, though, she hopes that blockchain will become a standard, and reduce the dependence on third parties that exist today.

Having said all that, it does not begin and end with blockchain. The team is working closely with the Air France-KLM artificial intelligence (AI) programme, as Taguet believes that one day there will be a project that combines AI, IoT and blockchain.

“We are not there yet, and it’s a bit complicated, but we do have some ideas. And we do have the technical knowledge, once we are ready for it,” she says.

The plot thickens.

  • Iris Taguet, Head of Blockchain Programme, Air France-KLM, will speaking at EyeforTravel Amsterdam (Nov 28-29)

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