Web3 and the Technology Transformation
We’ve entered the next phase of the internet known as Web 3.0. It's reconnecting the world through blockchain networks where internet communities now have the ability to own digital tokens and exchange them globally in the most efficient way ever.
Blockchain technology has been undergoing continuous transformation. Capabilities like NFTs, Smart Contracts, Stablecoins and new Carbon Neutral blockchains have led this technology to a maturity point, making it suitable for almost any industry. Travel is not the exception.
- What NFTs and the Metaverse Mean for Airline Loyalty Programs
- What Have Airlines Been Doing with NFTs and the Metaverse?
The Importance of the NFT
Non Fungible Tokens (NFTs) represent unique assets. They can only have one owner at a time and they are secured by the blockchain network.
These unique tokens can also contain intelligent and automated rules known as Smart Contracts.
There are several benefits for airlines in using NFTs to further evolve their distribution and retailing strategies. But before we get into that, let’s first illustrate how it works.
How NFTickets Work
Here’s a step-by-step process :
- When a customer acquires a ticket on the airline website, TravelX is able to Tokenize that ticket/PNR and create an NFTicket. The NFTicket and the PNR are constantly synchronized and contain the same fare rules.
- NFTickets are globally transferable tokens and Smart Contracts are the set of rules that regulate its transactions.
- Every time a transaction occurs, the airline collects both a transfer fee and a portion of the potential upside generated by any upsell activity. This occurs automatically.
- Incremental Revenue is impacted as an Ancillary in the PNR. Generating data points for future analysis by the airline.
- The parameters of the smart contracts are defined by the airline.
- Anywhere between 72hrs. to 48hrs. before departure, the NFTicket is converted into a digital QR coupon. An E-Ticket is once again generated guaranteeing all security protocols for the airline are fulfilled.
Below is a graphical representation of the process:
Some important attributes to understand are:
- NFTicket transactions are fully traceable, becoming a data feed for an airline’s Revenue Management on the behavior of the open secondary market.
- Airlines can interact with NFTickets holders globally and in an immediate way, potentially creating new loyalty and customer care opportunities.
- New promotions such as installment plans issued by the airline using NFTicket as collateral became available.
- Ease of use makes it accessible to all travelers but blockchain technology stimulates new traveler behavior and purchasing dynamics.
- Financial risk and fraud are eliminated.
- Enablement of other payment options such as crypto.
- Cancellations are fully automated without airline intervention or reach out to call centers.
- Enhanced loyalty mechanisms like cancel credits issued in “Airline Coins” deposited in the customer's wallet, which are transferable to the traveler’s Credit Card, Bank Account or kept for new purchases.
- Endless business rules can be defined by airlines for Credit Coins.
- A whole new world of distribution options emerged, enabling transactions to occur in social media, marketplaces, peer to peer transactions, crypto exchanges, etc.
- New use cases surge in direct and indirect sale distribution with a strong efficiency for the airline (allotments, corporate travel, revenue over fully sold planes, loyalty programs, etc).
To sum it up, NFTicket is a better and more flexible product for the traveler while airlines are given expanded product options, additional revenue streams and a controlled immersion into a previously unfeasible secondary market; all of this while generating strong efficiencies in cost and with a fully post-sale automation.
The history of airfare ticketing can be broken down into four eras, shown below:
Now it's just a matter of time to see how Blockchain technology and NFTickets enable the next shift of travel distribution into a bigger and much more efficient travel market.
Technology has finally enabled our Travel Ecosystem to bring the future into the present.