After successfully testing its blockchain smart fueling system on over 100 Smartavia Airlines flights, Gazprom Neft has announced that Smart Fuel has been approved for a full market launch. Using the enterprise blockchain Hyperledger Fabric, this instant digital aviation refueling software cuts the transaction time between a jet fuel supplier and an airline from five days to just 15 seconds.
The blockchain platform was tested at Murmansk International Airport by Gazpromeneft-Aero, the aircraft refueling operator of Gazprom Neft. Following its registration with the Russian Federation’s Ministry of Digital Development, Communications and Mass Media, Smart Fuel has now been cleared for wide distribution. Two banks – VTB and Raiffeisenbank – are partners in the project.
The key innovative feature of Smart Fuel lies with its ability to expedite the aircraft refueling process: the blockchain software can respond quickly to varying levels of fuel demand and fluctuating oil prices. According to Vladimir Yegorov, Gazpromeneft-Aero’s CEO, Smart Fuel “makes our partners’ work so much easier while increasing the security of financial transactions”. Using blockchain smart payments removes the requirement for advanced payment or a bank guarantee.
Through blockchain technology, Smart Fuel streamlines the refueling process. By placing agreed amounts on blockchains, the airline can handle refueling requests, payment and the exchange of accounting documents without involving administrative personnel. This avoids the potential for disputed amounts which are common with conventional manual transactions. Given the pandemic, some airlines might have stretched finances, so immediate payment reduces the risk for the fuel supplier.
Smart Fuel also eliminates direct contact between aircraft crew and ground staff. The pilot manages fuel demand through a tablet-based app, which sends initial payment transfer requests and authorizes final payments. Payment is digital and data is synchronized with an airline’s electronic flight bag and the digital aviation fuel accounting system of the fuel trucks.
Headquartered in St Petersburg, Gazpromeneft-Aero currently tops the Russian jet fuel market by volume of retail sales with a 26% market share. It serves over 260 domestic and international airlines, including Aeroflot, Ural Airlines and Volga-Dnepr. The company’s strategic goal is to become one of the ten10 largest aviation fuel providers worldwide by 2030.
A key space to watch with Smart Fuel is its prospective distribution throughout the global aviation industry. As Anatoly Cermer, Deputy CEO at Gazprom Neft has stated, “the system has a high potential for scaling up across the entire industry”. The company hopes to expand the Smart Fuel blockchain platform to other Russian airports by the end of 2021.
The aviation sector is embracing blockchain, not just for fuel, but also to trace the authenticity of aircraft parts. Numerous companies are exploring the possibility, including Honeywell, Lockheed Martin, Thales and the U.S. Air Force.
