Use of blockchain to track aircraft parts could save the air transport industry an estimated US$3.5bn.

SITA and key industry partners have announced the launch of the  Maintenance, Repair and Overhaul (MRO) Blockchain Alliance, the air transport’s first industry-wide study on using blockchain to track, trace and record aircraft parts.

Members currently include Bolloré Logistics, Cathay Pacific, FLYdocs, HAECO Group, Ramco Systems, SITA, and Willis Lease Finance Corporation, supported by Clyde & Co. The alliance was first discussed in 2019 at a HAECO Group event with the aim of bringing the various stakeholders together to set a global standard around the use of blockchain to trace parts.

The alliance will launch a proof of concept to demonstrate the use of blockchain to digitally track and record the movements and maintenance history of parts transferred between airlines, lessors, original equipment manufacturers (OEMs) such as engine producers, logistics suppliers, and maintenance providers. 

This tracking information will help manage the complex logistics value chain that can span several stakeholders over the lifetime of each individual part. Currently, there is no global database, incomplete data sharing, and only partial digitalization. 

The alliance believes that the use of blockchain will simplify and speed up parts tracking while enabling the secure sharing of information between industry stakeholders.  

Each year, the MRO industry processes 25 billion parts, while adding three billion new parts. There are 20,000 suppliers, covering 144,000 flights every day for an overall industry market representing around $100 billion every year.

As PwC published in the 2019 report Data for the life of the aircraft, blockchain could increase aerospace industry revenue by as much as 4%, or US$40 billion, while cutting MRO costs globally by around 5% or US$3.5 billion. 

Savings through the use of blockchain will be derived from secure document storage, ensuring confidentiality and data privacy, improved insights on repair time and inventory, automated workflows and more efficient record reconciliation.

Parts tracking is also essential to safety, confirming conformance to regulations, the performance of routine maintenance, and the authenticity and origin of after-market parts re-introduced into the supply chain.

The alliance will use blockchain to record and track two separate strands of information for each aircraft part: a digital thread and a digital passport. The digital thread provides the real-time status, chain of custody and back-to-birth track and trace of the part over time. The digital passport – like a human passport – provides the indisputable identity of a part and contains other vital data such as certification of airworthiness to prove ownership. 

SITA’s role, as the air transport community’s IT provider, is to manage governance for the global alliance, support the working groups, deliver all required blockchain technology components compliant with SPEC2000 and SPEC42 standards and ensure proper alignment and validation with regulators and international standardization bodies.

Matthys Serfontein, President of Air Travel Solutions for SITA said: “This initiative is part of SITA’s ongoing exploration of blockchain, a technology that we believe promises tremendous opportunity for streamlining the sharing and recording of information across the air transport industry. In an industry as interconnected as ours, the ability to share and record common data in a secure way without giving up control of that data is fundamental to driving new efficiencies in air travel. This is particularly true for the MRO sector.” 

The alliance will spend the next few months in the planning phase and aims to go live with the first proof of concept in the second quarter of 2020. 

The MRO Blockchain Alliance is a key element of SITA’s Global Blockchain Alliance, a wider SITA-led forum that is focused on the development of key blockchain-based applications for potential use in the air transport industry, including MRO, passenger identity and flight data.