Airlines and NFTs: looking beyond the crypto mayhem

Airlines and blockchain technology
Kozub Vasyl /

It is not every day that you get to sit down with the CEO of a major airline in order to mint some NFTs, but that was precisely what had brought me to airBaltic’s shiny, modern HQ next to Riga’s international airport, in Latvia.

During the last couple of years, NFTs (short for “non fungible tokens”), essentially digital assets whose proof of ownership resides in the blockchain, have achieved particular prominence and not just within the broader blockchain ecosystem, but also in the public imagination.

While some talk about them with a quasi-religious fervor, others dismiss them outright as little more than a scam. NFT markets have certainly attracted a fair number of speculators and haven’t been untouched by the recent implosion of several major crypto operators and markets.

But, just as today’s internet economy emerged from the ashes of the dotcom crash, could there be some fundamental value in the technology that underpins the blockchain craze?

As someone who is uninitiated in this area, I resolved to approach my meeting with Martin Gauss, airBaltic’s CEO, with an open mind.

I knew the Latvian airline had been a pioneer in blockchain experimentation, issuing its first NFTs back in 2021, a collection of digital artworks depicting Latvian cities. This was followed, last October, by a much larger and far-ranging NFT undertaking: the “Planies”, a collection of airplane-themed, colorful digital cartoons built on the Ethereum blockchain.

But let’s get back to airBaltic’s HQ, where Gauss, credit card in hand, was ready to show me how to mint a “Planie”.

The whole process was pretty quick and not unlike that of any other ecommerce website. We filled in an online form on airBaltic’s dedicated Planies website and exchanged 0.05 ETH (slightly more than $100 at the time) for a funny-looking digital airplane which, a few seconds later, popped up on the screen.

“If I now link it to my airBaltic frequent flyer program [an action called “staking” which can be completed on the same website where we had earlier acquired the Planie], I will collect 20 miles every single day, even if I don’t do anything else with it. In a year I will have accumulated 7,300 miles, which is enough to get you a free economy ticket with us to most of our European destinations”, he explained while pointing out one of the most obvious hooks of the Planies project.

Provided airBaltic continues to run its frequent flyer program more or less along the same lines, owning a Planie would guarantee you a free ticket every year in exchange for a one-off upfront payment of 0.05 ETH. So, you can do the math.

The Planies collection is technically capped at 10,000 units (of which some 3,600 have already been minted at the time of writing these lines), a purpose-built scarcity that aims to equate ownership of a Planie comparable to membership of a loyalty program super-tier, but with numerus clauses. Mr. Gauss also hinted that some additional benefits may be given out in the future to the Planie-owning community in order to boost their value.

The loyalty angle is one that other airlines are dabbling with too.

Etihad, for example, is granting automatic silver status of its Etihad Guest program to all those acquiring one of its NFTs. Each of the 1,600 NFTs in the EY-ZERO1 collection, as it is called, depicts a Boeing 787 adorned with one of Etihad’s 10 different special liveries.

Australian airline Qantas will also offer frequent flyer benefits to those buying into its NFT collection (which was announced March 2021 but hasn’t been publicly unveiled yet).

In the US, Kinectair, a startup which is building a decentralized on-demand air travel network, has made NFTs a central feature of its loyalty program, linking different tiers of benefits to the purchase of specific NFTs. And Flycoin, a startup linked to the owners of regional airline Ravn Alaska and yet-to-be-launched Northern Pacific Airways, is working on a blockchain-based loyalty program which it plans to open to multiple operators in the broader travel ecosystem.

Then, there is the, let’s say, more artsy and playful side of NFTs.

In the case of airBaltic’s Planies, since each is unique, created algorithmically through the combination of 180 pre-defined different visual traits, the expectation is that at some point there will be a collectibles market of sorts, in which specific Planies are sought after not just because of their utilitarian value, but also because of their aesthetics.

NFT technology makes it possible to also collect a creator’s fee in successive secondary market transactions. Think of it as the royalties that accrue from an artwork. In this particular case, the proceeds would go to the airline.

In this regard, it is no secret that the airline wants to turn the Planies into a brand in their own right. The creation of audiovisual content and merchandise are other avenues airBaltic is considering in order to increase the value of the Planies franchise.

Whether airBaltic succeeds or not in this attempt, Gauss sees the Planies project as a way for airBaltic to build expertise in a technology that has truly transformative potential in other areas of interest to the industry. NFTs are, after all, a form of smart contract and this could have applications in other sorts of transactions, from procurement to ticketing.

Earlier this year, Spanish airline Air Europa auctioned what it is claimed to be the first NFTicket ever, or to be more exact, 10 of them.

These NFTickets, designed and minted in partnership with blockchain technology firm TravelX, consist each in a work of art created by a recognized artist, which is, in turn, linked to a business class ticket for Air Europa’s 29th November Madrid-Miami flight. The choice of route is due to the opening of the Art Miami fair, where these NFTicket holders are expected to enjoy some additional perks as well.

In case you were wondering, those traveling on the NFTickets will still need to retrieve a “traditional” boarding pass to get on the plane.

Many in the industry, however, see NFT technology as a platform for a new generation of “smart tickets” which could, for example, become tradeable in the open market, bringing a whole new meaning to the concept of dynamic airline ticket pricing.

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