November 2018, Amsterdam
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Air Canada: not alone in the dark with blockchain
In October, Air Canada joined the growing gang of airlines that are working with Winding Tree on building a blockchain-powered decentralised infrastructure for travel. Pamela Whitby caught up with the two companies
Air Canada believes that two significant benefits could flow from industry-wide cooperation to build a public blockchain for travel. Says Keith Wallis, Director of Global Product Distribution, Air Canada: “Firstly, if we can build a lower cost network for distribution and pull costs out of the system, then that benefits everybody, including, absolutely, the end traveller”.
Secondly, it is a way to foster innovation and allow new entrants to come into the market. “There have probably been a lot of tech players, which have looked from the outside in at travel but haven’t really been able to break through the wall and get access to airlines and content,” he says.
The reason is, of course, that the three private global distribution systems - Amadeus, Sabre and Travelport – which currently control much airline inventory, can be expensive and onerous to access.
… a lot of tech players…have looked from the outside in at travel but haven’t really been able to break through the wall and get access to airlines and content
Keith Wallis, Director of Global Product Distribution, Air Canada
“If we can successfully build a network that allows tech players to get into this space easily, and brings down those barriers to entry, then a lot more competition and innovation can happen faster, which also benefits us,” he says.
Talks between Air Canada and Winding Tree began over a year ago. Despite initial apprehension, Air Canada’s due diligence revealed that there were numerous applications for blockchain technology that could benefit the airline industry.
At Winding Tree’s recent hackathon in Prague, which was attended by teams from, among others, Swissport, Air France-KLM, Lufthansa and Air Canada, everything from baggage handling to payments and settlement and loyalty emerged as potential opportunities.
Beyond the glitter
Pedro Renaud Anderson, co-founder and chief operating officer, Winding Tree, believes that for any solution to be effective, there needs to be a solid infrastructure in place to facilitate those “glittery tech solutions for loyalty or baggage tracking, and all the others we haven’t even thought about”.
So, while building a [private] blockchain just for the sake of tackling any one of those opportunities is certainly possible – and some are already doing so – Anderson wonders: “Is it really scalable or, in my words, interesting or serious or a long-term enough use case?”
He thinks not, which is why Winding Tree is taking a longer-term approach, and is currently focusing on the core issues around distribution and aggregation. However, he stresses that while blockchain is an important component of this, and without it the whole platform wouldn’t work, “it’s not magic and there is a whole lot of other technology that is needed to make it possible”.
Crucial also to this success is open collaboration. The Winding Tree project is, in Anderson’s words, “about openness, open source code and open collaboration throughout the industry”.
As one example of this, at the firm’s recent hackathon, the solution that Air France built used Lufthansa’s new distribution capability (NDC) API. NDC is an initiative of the International Air Traffic Association (IATA), which is working to develop and market the adoption of a new, XML-based data transmission standard, which will enhance communications between airlines and travel agents.
NDC is the standard for distribution of data and Winding Tree will hopefully build a network for us to get it out to the world
Wallis, who says NDC complements what Air Canada is working on with Winding Tree, sees it like this: “Hopefully Winding Tree can provide the industry with a public open network so that airlines can connect with sellers and find ways to move content back and forth and make bookings in a free and open way that is controlled and safe. NDC allows us to expose content to networks like the one Winding Tree can hopefully build, so that we can get a really rich informative, customised content into that blockchain and give it to the end seller in a highly efficient way. NDC is the standard for distribution of data and Winding Tree will hopefully build a network for us to get it out to the world.”
Aside from the partners that Winding Tree has already signed, Anderson says just about every major travel company has reached out to get involved in its decentralised travel ecosystem. However, he admits that the companies that are more inclined towards innovation, and more inclusive in their approach to doing business are definitely taking the plunge first. “There is a much longer learning curve for folks that are more happy with the status quo and not as hungry for innovation,” he says.
Air Canada first began engaging with Winding Tree over a year ago. At the time there was a lot of interest and a bit of apprehension but after completing due diligence, the team agreed this was a good opportunity to get in on the ground.
Wallis is quick to stress, however, that this is an industry effort. “Within the Star Alliance we have a group of around 20 like-minded airlines and over the years I have built relationships with most of my counterparts,” Wallis explains. In particular, the joint venture between United, Lufthansa and Air Canada means that ideas are shared almost daily between the three airlines.
This isn’t Air Canada alone in the dark trying to find its way through by any stretch of the imagination
“In general, we have overall similar strategies that allow us to coordinate ideas and discuss opportunities together. This isn’t Air Canada alone in the dark trying to find its way through by any stretch of the imagination. We understand that this is a much more powerful solution if there is industry-wide adoption. There are definitely discussions all the time about which opportunities are worth the investment and which are still too young, or probably won’t materialise”.
So how far is Winding Tree from completing its ambitious infrastructure project? Anderson can’t put a hard date on it. On the hotel side, however, the project is “quite advanced” and some elements are ahead of schedule. “We are just working on high-level APIs, but the foundation is all there, which is why we were able to hold a hackathon successfully. The code is publicly available for anybody on GitHub to look at,” he says.
I can’t put a date on it, but I can say the hotel side is almost ready
Pedro Renaud Anderson, co-founder and chief operating officer, Winding Tree
As far as the airline effort goes, where complex solutions are needed, Winding Tree is working to make the technology as simple as possible. “We are reusing a lot of infrastructure on the hotel side and adapting it. There is more complexity when it comes to airline standards but the actual infrastructure is very similar to the main blockchain and is very straightforward. We’re developing smart contracts and building open source APIs around it. I can’t put a date on it, but I can say hotel side is almost ready,” he says.
For Air Canada it is still very early days. “We are heads down donating time and resource to understand exactly what and how we want to build it, and considering how the network has to really address the intricacies of the airline business,” Wallis says.
That can never happen fast enough, and Air Canada is being realistic. “This is not five years away, but it is not that far off. “We are hopeful that this disrupts and innovates and brings about a different way for airlines to do business with their sellers,” he adds.
Iris Taguet, AirFrance-KLM’s head of blockchain programme will be sharing insights at EyeforTravel Amsterdam next week (November 28-29)