It seems that blockchain has finally took off for its long-awaited flight in the Russian market. Russian state-owned oil enterprise Gazprom Neft has joined forces with the Moscow based S7 Airlines to make use of blockchain-powered smart contracts. These smart contracts will be used for aircraft refueling, per a press release on August 24, 2018.
The aim of this venture is to better the speed and efficiency in aircraft refueling process and automate the planning in fuel supplies.
Blockchain Invades Moscow
The two parties claim that this is the first instance that DLT is being used in a major industry in the Russian market. Perhaps, it is even the first use-case of blockchain in aviation fueling process.
It is speculated that integration of blockchain will vastly accentuate the process of making payments to aircraft fuel vendors. The enhancement will virtually wipe out usual impediments such as vendor pre-payment, bank guarantees, collateral, labor costs, and the like.
How does the Process Work?
To kick start the smart contract, S7 Airlines will have a planned volume and price of the fuel it wishes to refill. This data will then be sent to a fuel tanker driver present at the airport. On the day of refueling, the airline pilot responsible will place the order for fuel with the operator, specifying the exact volume required.
Once the order is confirmed, a notification will be triggered to the airline’s bank confirming sufficient funds to pay for the fuel. Refueling process will commence the moment bank does the confirmation of funds.
Blockchain will guarantee that refueling transaction data is stored securely in the AFSC system. As the smart contract will work only after being approved by the participating parties, scope for breach of contractual terms will be nil.
Great Feat for the Companies
Anatoly Cherner, Deputy CEO for Logistics, Refining and Sales, Gazprom Neft firmly believes that implementation of emerging technologies such as the blockchain will streamline complex processes involved in supply chain management at Gazprom Neft.
“Implementing digital transformation projects in cooperation with major partners will enable the company to reach a new level in technological and operational efficiency, right now.”
It is also worth noting that this is not the first stint of S7 airlines with blockchain. Back in 2016, S7 entered into a coalition with the native Alfa Bank to utilize smart contracts for business-to-business payments.