Irish startup Travacoin wants to use the blockchain to tackle one of the most irritating aspects of airline travel – delays and compensation. Travacoin hopes to encourage airlines to keep passengers more up to date and offer instant compensation in the form of a cryptocurrency. This would be instead of a lengthy compensation process that can take weeks or months when done through traditional means.
In the first half of 2018 alone, airlines faced compensation payments totaling $292 million for delays and cancellations, all of which carry additional fees and only gets processed after the event. The use of tokenized compensation could offer customers instant refunds, vastly reducing the costs incurred with sending such amounts through the traditional banking system. This could potentially have huge benefits for both the airline and the passenger in such a scenario.
Airport Ecosystem
Travacoin was founded by Brian Whelan, who spent ten years at the Irish aviation regulator before setting up airline repayments website Airtaxback. The company helps passengers with airline compensation claims. Whelan’s vision is for airlines to offer instant compensation through the Travacoin token, which passengers could use in and around the airport:
The result for passengers is that they don’t have to fight with airlines to get compensation. Furthermore, they could also be offered discounts by other partners to encourage them to spend those tokens in or around the airport.
While the principle of the token is sound, Whelan himself notes that it would require a full ecosystem in order to work at all – airlines, airports, and local establishments would all need to buy in together. This isn’t an impossible task, but it might be too early in the blockchain story to encourage such adoption at this point, as not many establishments are open to accepting cryptocurrency as a payment option.
Tokenizing Travel
Travacoin is one example of how startups are leveraging the blockchain to try and change the travel industry. Russian airline S7 already plans to use smart contracts to refuel its aircraft, while luggage tracking service Winding Tree has an agreement with Air Canada to use their service.
With identity services Civic and TheKey aiming to revolutionize cross-border transfers, it might not be long before blockchain does indeed begin to revolutionize the way we go on vacations… or get compensated for not getting there.
