S7 Airlines and Alfa-Bank organized the first-ever sales of air tickets through a blockchain

2017

S7 Airlines and Alfa-Bank organized the first-ever sales of air tickets through a blockchain

On July 26, 2017 S7 Airlines and Alfa-Bank announced start of a blockchain platform for automation of trade operations. A system is created based on the Ethereum protocol in which by means of smart contracts information exchange of partners when carrying out payments is provided.

In a case S7 Airlines and Alfa-Bank partners makes the project airline and its agents selling tickets. The bank makes payments and obtains information on the performed operations from the node of network included in a private blockchain. All cycle of transactions, including formation of the request for payment, check of sufficiency of means on the account, write-off of means and updating of the status, is executed by a system automatically. According to the new scheme by the end of July, 2017 more than 100 air tickets are issued.

S7 Airlines in partnership with Alfa-Bank started a new solution selling air tickets based on Ethereum

Affirms that it is the first project in which infrastructure for carrying out payments in a constant duty is created, – from a booking system of tickets to the system of carrying out payments of bank. S7 Airlines calls itself the first-ever airline which issued the air ticket by means of connection to a banking system through a blockchain platform.

Thanks to implementation of Ethereum business processes both for airline, and for her partners were optimized. Speed of calculations grew from 14 days to 23 seconds. The airline does not grant the agent a delay in payment and receives revenue right after execution of the air ticket.

The blockchain platform allows to optimize business processes significantly. It automates any scheme of settlement, even very difficult – for example, warehouse deliveries. At such mechanism participation of the person is practically not required: it is not necessary to make out bills, to carry out reconciliations, to write acts. Potentially suppliers of an onboard power supply, fuel, airport services – all those companies with whom S7 Airlines constantly works can be connected to the platform and not only", – the deputy CEO for information technologies of S7 Group Pavel Voronin reported.

Alfa-Bank and S7 Airlines create a blockchain platform for trade operations

On June 7, 2017 the S7 Airlines and Alfa-Bank provided the joint blockchain platform intended for automation of trade operations.

At the first stage the solution is going to be used for settlement with agency network S7 Airlines. Later the circle of partners (suppliers of an onboard power supply, the fuel, airport services, etc.) involved in the new project will increase. S7 Airlines is going to implement a new blockchain platform in July, 2017.

S7 Airlines will use a blockchain platform for settlement with agency network

Settlings with agents for execution of tickets for runs, as a rule, assume a payment deferral for up to 14 days. Bank guarantees which only large players of the market can provide are applied to reduction of risk of non-payments. The blockchain system, the announced S7 Airlines and Alfa-Bank, provides receipt of sales proceeds less the commission of the agent right after execution of the air ticket. Implementation of the new platform will allow to reduce process of settlement from two weeks to five minutes that will allow small agents to sell tickets without need to obtain bank guarantees.

After sending by the agent a request for execution of the ticket to S7 Smart Ticketing, a system sends data on the planned payment to the smart contract from which these data are obtained by bank. In turn, after internal checks the bank returns in the smart contract information on sufficiency of means on the checking account of the agent. The system of the statement of tickets sees updating of information in the smart contract and makes execution of the ticket then again sends information to the smart contract. The bank obtains information on successful execution of the ticket and makes write-off of funds from the account of the agent into the account  of S7 Airlines then sends the final status to the smart contract.

The blockchain platform will allow to optimize significantly business processes for  S7 Airlines and its partners. It automates any scheme of settlement, even very difficult - for example, warehouse deliveries. At such mechanism participation of the person is practically not required: it is not necessary to make out bills, to carry out reconciliations, to write acts — the deputy director general on IT of S7 Group Pavel Voronin noted.

2016: Alfa-Bank and the Central Bank announced start of the MasterChain platform

In December, 2016 it became known that Alfa-Bank within half a year works on a number of projects with use of blockchain technology. The bank is a part of the working group created at the Central Bank. In October, 2016 Alfa-Bank together with the Central Bank announced start of the MasterChain platform.

S7 company became the first partner in implementation of blockchain technologies in large corporate business. Under the agreement of PJSC Siberia Airline with one of partners calculations using the paid letter of credit were carried out.

Concerning application of blockchain technology Alfa-Bank was advised by Igor Barinov, the expert on a blockchain, the founder of Block Notary company. Specialists of Deloitte & Touche CIS company performed legal support of the project on the party of S7.

Alfa-Bank gave to participants of the transaction additional opportunities in the system of electronic interaction "Alpha and Business Online": the customer of works could submit the application for opening of the letter of credit, and the contractor – to provide to bank documents on execution of works and rendering services. Money was charged off a customer account into the special account of a covering at the time of application for the letter of credit, and at the time of providing documents – arrived into the account of the contractor.

The main stages of the transaction – opening and execution of the letter of credit – are issued also in a transaction type on the basis of smart contracts in the Ethereum system and were fixed in the distributed register (blockchain). Record contains a hash (result of cryptographic conversion) of the following data in a blockchain: TIN of the customer and contractor, work type, amount of the letter of credit, date of opening and closing of the transaction. Having this information, any participant of business process can independently check the status of the letter of credit.

Feature of the transaction is use of two smart contracts at once: one was used only for opening of the letter of credit, and the second – for closing. Existence of two smart contracts interacting with each other is intended to reduce the probability of emergence of errors in the code, having protected thereby the interests of participants of the transaction and having increased its transparency.

The blockchain technology allows to solve two very important issues: question of trust and question of speed. Both of these aspects are extremely important for the sphere of trade financing therefore we believe that the blockchain will significantly change our products in the future" — the Managing director for trade financing of Alfa-Bank Dina Merkulova emphasized.

Using a blockchain, the bank builds the platform allowing to carry out the most transparent transactions between clients. The technology provides protection against non-execution of conditions by participants of process. The blockchain is the ideal solution for business which makes transactions with a large number of participants and also if in the transaction new participants who do not trust each other yet. In the future, the more market participants (banks, large partners, individuals) transactions through the platform of the guaranteed transactions on a blockchain will make, the is more transparent, quicker and cheaper there will be a financial interaction" — the director of the Center of innovations of Electronic Business of Alfa-Bank Nadezhda Avdanina noted.