Introduction to Blockchain and Airport Operations in a COVID-19 Environment (2020)

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15 SESSION 3  Blockchain in Use at Airports: Operations‐Facing  Applications  Maurice Jenkins, Miami‐Dade County Aviation Department, Moderator Presenters  Christophe Ancolio, Amadeus Stephen Leng, EquiNordic Group Amar More, Kale Info Solutions USA Sherry Stein, SITA Maurice Jenkins stated that it is important to think about the role of airports in the safe and efficient movement of people and cargo, and how blockchain can help meet those industry demands in the current environment. This session included discussions on operations-facing blockchain applications at airports, such as cargo and baggage handling and provenance tracking. Christophe Ancolio stated that blockchain is more complex than a simple distributed ledger technology solution. It also involves cryptography (secure communications techniques) and consensus. Ancolio noted that the goal is trust and having a solution that facilitates trust between actors around the value that will be shared. Ancolio noted that the project he is presenting came out of an interest in using blockchain technology to address particular challenges within the travel industry, including customer experience, the cost of inefficient legacy systems, the issue of monopolies and centralized actors, loyalty, asset tracking, and manual processes. Amadeus developed a list of potential use cases, including asset tracking, loyalty, and settlement, and ultimately devised the Bagchain project, linked to bag tracking. Ancolio noted that there is a need for a better solution for sharing data and messages around bags. Additionally, International Air Transport Association (IATA) Resolution 753 requires that airports and airlines improve bag traceability. Ancolio stated that the goal was to involve partners and customers in an iterative and collaborative approach to developing, learning from, and assessing the project; establishing metrics; and identifying what decisions would come out of the effort. Ancolio noted that blockchain was a promising technology platform for the use case, allowing the testing of a new technology, increasing collaboration, and providing for efficiency gains.

16 The effort began in 2019 and started with bringing on airline partners (though Amadeus was unable to involve any airport partners in the project). Ancolio stated that the first step was to define objectives, including defining the use case and key performance indicators. The next step was to select the technology (Hyperledger Fabric, a private blockchain system developed by IBM), after which Amadeus developed the prototype. Ancolio noted that the prototype was developed in approximately 3 months, and the delivered platform was a ready-to-install solution with all monitoring tools included. Testing occurred in three phases. In Phase 0, Amadeus hosted the airline nodes and simulated bag messages. In Phase 1, airlines began hosting their own nodes and simulated bag messages. In Phase 2, the airlines hosted the nodes, and bag messages were sent from the airline systems. The final step was to evaluate the benefits and limitations of the prototype and consider next steps and other potential pilots. Ancolio stated that the network was very simple. The airlines and airports connected with a node, and Amadeus managed a node for supervision and to simulate the role of an airport in the network. The test of the experimentation was linked to a functional test, storage (size of the ledger), and network (impact of nodes). The most important aspect of testing was performance. Ancolio stated that Amadeus estimated that, to track all bag messages, the system would need to manage 1,000 transactions per second. Ancolio noted lessons learned from the experience to date, including usability of Hyperledger Fabric and documentation, community, and support for the platform. Hyperledger Fabric is a powerful blockchain system that was specifically designed for enterprise use. It uses different protocols and validation methods compared with other enterprise or public blockchain systems. As with all software systems, more complex and multifunctional systems increase the implementation burden. Furthermore, as a proprietary product, there is also a smaller community devoted to Hyperledger Fabric. Ancolio also noted the significant amount of time needed to set up the test network, though storage scalability was not a concern as long as data were not shared on the blockchain. Ancolio added that network bandwidth requirements are shared across participants, rather than having one system require full bandwidth. Ancolio also noted the following key desirability and feasibility insights:  Customers rely on technology providers to develop blockchain solutions (desirability/feasibility),  Blockchain technology is progressing quickly but is not enterprise ready (feasibility),  Customers like decentralization (desirability/feasibility),

17  Blockchain can be compliant with the General Data Protection Regulation (GDPR), a European Union and European Economic Area data protection and privacy regulation (feasibility),  There is potential for an airline–airport data-sharing platform (desirability), and  Participant scaling is key (feasibility). Stephen Leng stated that his organization, EquiNordic Group, is focused on technology to create innovative solutions. One of the company’s first products for the aviation industry after September 11, 2001, was to support advance notice on the contents of incoming airplane cargo holds. That application has since been expanded to multiple countries. The company has also worked on applications to support efficient movement of goods away from airports once they clear customs and to track products at the asset, pallet, and temperature levels, among other examples. Leng noted that the goal is to solve the last mile problem of getting goods from a hub to a final destination. Blockchain facilitates the creation of a digital copy of an event or physical asset that serves as the identification of that product or a transaction, rather than a human recording of the information that can be corrupted or incomplete. Leng noted that these applications encourage the health of the supply chain. The more information one has via sensors, signals, and other means, the greater the opportunity to improve supply chain health. Leng stated that he views blockchain as a general-purpose technology that has applications across many different industries, use cases, and functional processes. He noted the importance of considering context and the peculiar challenges of the airport industry, including its mission-critical operations, its complexity and competitiveness, the high fixed- cost base, and the high level of regulation. Leng stated that it is also important to start by looking at the problem that needs to be solved and the value that can be brought to the solution that is not there today. Blockchain requires a very formal structure and significant commitment by parties to the importance of the effort and the desire to work and share data in a formal arrangement with business rules, agreements, and governance. Leng noted that people and organizations are often happy to share data in principle but have a very different perspective when it comes to the reality of sharing data and setting rules for sharing data within a blockchain consortium. Leng noted several factors in successful industry-led blockchains, including the following:  A strong and committed leadership (industry influencers),  A solution that addresses an industrywide issue (e.g., food safety),  A clear opportunity to interrupt the status quo,

18  A focus on the consumer, and  Shared distribution of value. Leng stated that it is also vital that a network has broad benefits that do not just provide capabilities to the few. Leng noted opportunities for blockchain applications in the air cargo space. This requires decisions around the type of blockchain to use (e.g., consortium, enterprise). Leng stated that many start-ups and businesses are looking to blockchain as a growth area and that there are many blockchain-based applications. Opportunity areas for blockchain applications and air cargo include automated usage and financial processes through smart contracts; enriched customs clearance and paperless trade; assured asset maintenance; shared use of physical assets; identification and certification of management; greater transparency to activities, costs, and ownership; and invoice dispute resolution. Leng stated that it is important for airports to remember the broader supply chain context, that is, where they sit within the supply chain and how they can align with that position. Consumers are also interested in knowing and being able to track the provenance of products. Leng noted that blockchain is essentially just shared infrastructure for digitization and needs to be put in the context of IoT, AI, and so forth to create applications that make sense and predict future scenarios. Amar More noted that, at airports, a large amount of space is consumed by air cargo and that the importance and role of cargo have become clearer during the pandemic. He stated that the logistics industry has played an important role in saving lives. However, the air cargo industry is very paper intensive. More noted that blockchain has the potential to smooth transactional issues in trade and improve efficiency. More noted issues in logistics that blockchain has the potential to address, including lack of visibility in the supply chain, long processing times, data discontinuities and antiquated systems, regulations and certification requirements, a proliferation of players and handoffs, extensive manual inputs, and significant paper-based processes. More stated that blockchain solutions for air cargo challenges include certifications, elimination of paper, tracking, and financing. He added that many participants in air cargo shipments depend on certificates of origin. A blockchain-based e-certificate or digital passport could replace the current system.

19 More noted that there are still significant commercial, legal, and technical barriers to the widespread adoption of blockchain. Sherry Stein stated that SITA is a cooperative organization owned by the airline industry and representing airports and airlines, border management, and aircraft. SITA is focused on several core pillars: the seamless travel journey, operational excellence, and automation and digitization. The seamless travel journey relates to safety and a low/no contact experience as well as to removing friction in disparate, paper-laden processes and creating a more streamlined and touchless or low-touch experience. Operational excellence is concerned with data and access to timely data to support decision-making, including how to do more with less given current economic pressures, as well as accelerating sustainability goals on the basis of reduced traffic. SITA is also focused on improving connected solutions and helping airlines, airports, and travelers be more informed by the data available to them. This involves looking at automation, self-service technologies, and digitization and leveraging mobile devices, cloud-based services, and infrastructure to improve decision-making. Stein noted that in 2015, SITA began working with IATA on the seamless travel journey, establishing a framework for the One ID program and FlightChain, which was focused on sharing flight status information more effectively across partners in a given network. Stein stated that identity is a major focus, but there are smaller areas of interest around operational intelligence for which public information is available, but not at a level that facilitates decision-making. Stein stated that the FlightChain project involved working with Heathrow Airport, Miami International Airport, British Airways, and Geneva Airport to look at the nuances of public information blockchains and associated business rules and a framework for a governance model. This led to the development of the Aviation Blockchain Sandbox, through which SITA created a GitLab project that has been made available to the industry. (GitLab is a software development and IT operations platform.) SITA hosts the infrastructure, opened up the project, and hosted weekly sessions to bring together airlines and airports so they could expand their learning and develop FlightChain projects of their own within their ecosystems and networks to take advantage of blockchain. More than 50 airports and airlines have participated in that project. Stein stated that these efforts led to the creation of the Global Blockchain Alliance, which extends beyond technology to look at business case and business value and other potential use cases. The goal was to improve standardization and envision standards and principles of a governance model that would allow for scalable projects that support the industry at

20 large, beyond individual implementation. Stein noted that SITA has also looked at the potential to combine IoT and blockchain to provide information around shipments and management of perishables, for which a certain temperature has to be maintained, or items that are subject to breakage. Blockchain would be applied to ensure traceability and chain of custody and to ensure that the shipment was delivered within the right time frame and constraints. Stein stated that SITA is currently undertaking a broader project with unit load devices care and looking at how to extend that scope to the shipping and cargo industry at large. The goal is to identify how to facilitate trade more efficiently to reduce paperwork and associated delays in delivery. Slowdowns owing to paperwork currently cost the industry more than $400 million. Stein stated that the Maintenance, Repair, and Overhaul (MRO) Blockchain Alliance also emerged from the Global Blockchain Alliance, focused on aircraft parts and maintenance. High-value parts are often subject to black market sales, and there may be slowdowns in the traceability of the history of part maintenance when an aircraft is put up for sale. That entire process is currently paper based, and SITA is looking to digitize it and link it to blockchain. Stein noted that SITA also joined the Sovrin Foundation as a founding steward, focusing on bringing a streamlined process into the digital identification ecosystem. A digital travel credential could eliminate the manual process of document checking and avoid passengers having to turn around when they get to their destination because they did not have the right number of blank pages in their passport, the correct visa or health credentials, etc. Stein stated that SITA is also ensuring that this approach will be compliant with the International Civil Aviation Organization’s (ICAO’s) emerging Digital Travel Credential (DTC), which is expected to be published within the next 1 to 2 years. The DTC has two components: a physical, secure identifier that can communicate (e.g., ePassport or mobile phone) and a virtual component (i.e., data that can be accessed by authorities as needed). SITA is also looking to the potential for a mobile driver’s license that will demonstrate that holders are who they say they are and allow them to move through the airport or across borders without having to exchange physical documents. Stein noted several key takeaways, including that blockchain makes sense where there is a complex supply chain and a need to prove the source of data, provide chain of custody, and track and trace. She noted that it is also important to consider where decision-making is key and how access to data drives decisions and to ensure that processes and participants are ready for digitization.

21 Stein stated that the building blocks for blockchain applications include  Stakeholder collaboration and buy-in;  Standards for operational practices and buy-in;  Consensus on how blockchain will be used to create more integrated and efficient processes;  A framework for trusted data exchange; and  Privacy and data protection principles around what will be shared, who has rights to write and share data, and what data stay. Stein noted that above all, governance is key. Additionally, if there are gaps in the data today, blockchain cannot solve that problem. It is important to conduct business process mapping to understand what problem the organization is trying to solve and what data and systems are already in place. Stein stated that, at the outset, discussions around blockchain focused on tokenization and monetization. Now, use cases are focused on supply chain management and streamlining existing processes. Stein noted that, looking ahead, cloud-based, online blockchain is the future. The key issues for the airport community will be how blockchain can be leveraged to allow users to move to a more connected infrastructure and do more with less. Jenkins noted that blockchain holds promise for airports if participants are open to collaboration. Cargo will be an important focus for blockchain efforts at airports moving forward, particularly within the current environment.