Is cryptocurrency a viable payment platform for aviation spare parts?
It’s been slow coming, but finally, blockchain technologies are beginning to disrupt the aviation spare parts and maintenance industries. The aviation and aerospace industries are well known for their traditional methods of doing things and their reluctance to change – with good reason in many cases, safety being one of them – however, the benefits of digitalisation are now being realised by aviation companies seeking to improve their operational efficiency, especially in the spare parts marketplace.
Cryptocurrencies, as one branch of blockchain technologies, is being widely touted as the future method of payment for aircraft spare parts and repairs. But is that just a pipe dream, a possibility, or an idea that will eventually become a reality?
Already, blockchain technologies are offering insights into one area that is haemorrhaging money for the aviation industry – the manual collection of big data. Two sectors of aviation already heavily reliant on the collection of big data are MRO and spare parts. At present much of the information critical to keeping aircraft in the air is collected manually, both expensive and time-consuming processes.
However, blockchain can record the movement of spare parts every time a part is installed or removed from an aircraft, along with other information such as time in service, last inspection date, location, and even the records associated with the technicians who may have worked on repairs. It is even envisaged by some that these evolving technologies could lead to virtual 3D, AI, or AR blueprints of every aircraft, where every part, and all of its associated information, can be stored and retrieved as needed.
Companies like Locatory.com – a family member of Avia Solutions Group, and the number one aviation marketplace in Europe and the eastern hemisphere for aircraft spare parts and repair capabilities – is already contemplating the future for cryptocurrency payments as an integral element of the spare parts marketplace.
Toma Matutyte, Director of Sales and Marketing at Locatory.com believes that cryptocurrencies can transform the digital spare parts marketplace, but also realises that many players are still cautious about its onboarding. “There can be little doubt that blockchain technology will influence how aviation, and especially the spare parts marketplace will gather information. With that in mind,” says Matutyte, “it seems logical that cryptocurrencies are predominantly suitable to work in tandem with these new technologies as a means of instant payment for parts or services anywhere in the world. Any technology that improves the flow of parts, increases buyer confidence, and reduces wasteful practices has to be taken seriously.”
Cryptocurrencies have many advantages; transactions are quick and easy, their place in the blockchain cuts out the need for banks or other financial institutions, every transaction is recorded in a public list (the blockchain itself), and probably most importantly, cryptocurrencies are gaining in popularity and are now widely used as an instant payment method for all kinds of goods and services.
It’s also true that cryptocurrencies have their disadvantages; the irretrievable loss of digital wallets and their contents, the fluctuating value of bitcoins and other cryptocurrencies, the marketplace remains unregulated, and they are vulnerable to cyber-crime and scams.
All new practices, not just in the aviation industry, come with certain amounts of trepidation. However, the growth of cryptocurrencies already seems to be an unstoppable train and destined to become an integral part of the future aircraft spare parts and maintenance sectors.