Siberian Airlines (S7), one of Russia’s largest airline operators, and Gazprom Neft, a state-owned energy company, announced a successful development in a press release. The partnership had developed blockchain-based smart contracts for aircraft fuelling.
Gazpromneft-Aero, the refueling subsidiary of Gazprom Neft, and Alfa-Bank, Russia’s largest private bank, had participated in the first pilot test of the application on a domestic flight based out of the Tolmachevo International Airport.
According to the information released to the media, the Aviation Fuel Smart Contract (AFSC) system will enable aviation and airline companies to effect instant payment removing the need for bank guarantees or pre-payment. This will result in reduced financial risk to both the fuel supplier and airline company.
The blockchain-powered system will automate the whole refueling process. The new process will replace the existing more complex process. It’ll eliminate a number of manual transactions and speed up the transaction, increase efficiency, and save costs.
The process will start with the pilot requesting a specific fuel volume using the system. It will then be sent to the bank which will present the required amount on account. After the immediate confirmation, the refueling process will start, and the payment settled hereafter.
Pavel Voronin, S7 Airline’s Deputy Head for Information Technology, explained that the automated trading operation would affect three parties; the bank, airline, and fuel supplier. Vladimir Egorov, CEO of Gazpromneft-Aero, stated that integrating the blockchain technology gives a new motivation to develop the entire aviation industry. Deputy CEO for Logistics, Refining, and Sales of Gazprom Neft Anatoly Cherner added that the implementation and development of digital transformation projects will greatly help the firm to reach a new level of technological and operational efficiency.
This blockchain technology move is considered as a first in the Russian market. While it is not the first time for the travel industry to utilize the distributed ledger, S7 is sure following the steps of others.