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What are NFTs and How Do They Work?

NFT is an acronym for “Non-Fungible Tokens”, which means something unique that can’t be replaced. In contrast, fiat and cryptocurrencies are fungible, which signifies that they can be exchanged or traded for one another. Each NFT comprises of a digital signature that makes each one unique. NFTs refer to digital assets, such as videos, photos, audio files, or another digital format. NFT examples include sports collections, artwork, trading cards, comic books, and more. 

NFT as a cryptographic asset is stored on the Blockchain, a distributed public ledger that records transactions. Every NFT comprises of a unique identification code that distinguishes them from each other. This information allows easy transfer of tokens among owners and to verify ownership.

NFTs hold a value that is set by the market and could be traded in the same way as a physical asset. It allows for tokenizing real-world items, such as real estate and artwork. For example, brands like Taco Bell and Charmin have raised funds for charity by auctioning off themed NFT art. Also, Nyan Cat, which is a GIF of a pop-tart body cat was traded for nearly $600,000. Even celebrities, such as Amitabh Bachchan, Snoop Dogg, Salman Khan, and Lindsay Lohan have jumped over the NFT bandwagon, launching unique memories, moments, and artworks as securitized NFTs. 

Understanding the Benefits of NFTs for Airlines

The airline industry constantly strives for new methods to improve user experience and enhance business operations. There are many advantages of utilizing NFTs in the airline industry.

  • Streamlined Bookings – NFTs can assist in streamlining the booking process by enabling travelers to track and confirm availability easily. These NFTs can be stored on the blockchain, making them easily available and verifiable. This feature will help to eliminate the need for paper tickets and will simplify the check-in process. This can help to minimize the price and complexity of the booking process and protect against fraud. 
  • Customer Loyalty – The use of NFTs presents an opportunity to establish customer loyalty through a secure and transparent platform that enables the tracking and redemption of loyalty rewards. By leveraging this technology, travel companies can effectively retain users and foster repeat business.
  • Brand Building – NFTs can be a powerful tool for developing brand awareness and fostering a sense of community among travelers. By developing their own NFT marketplace, travel brands can enable users to communicate with and identify with the brand via NFTs.   

Exploring the Practical Use Cases & Implementation of NFTs in Airlines

NFT in the airline industry provides transparent and immutable transactions of airline-related assets. This highly contributes to enhancing the traceability and security of airline assets, minimizing the risk of fraud. The following are the potential use cases of NFTs in the airline industry:

  • NFT Tickets: One of the most prominent applications of NFTs is the Non-Fungible Token Tickets. NFTs are valued for their unshakeable record of ownership and uniqueness. The traditional digital tickets utilize QR codes and bar codes that can be copied and re-sold as fake tickets. However, by using NFT tickets, fraud, and scalping can be eliminated, enhancing the value of the ticket for users and improving user safety. 

    The working of the NFT tickets in the aviation industry is as follows: 

    Step 1: At the time when users are provided with a ticket on the airline website, the airline company or the third party converts the ticket into a Tokenized NFT ticket. 

    Step 2: The NFT tickets are globally transferable tokens linked with a smart contract with a set of rules that regulate the transactions. 

    Step 3: Each time a transaction is performed, the airline receives both a transfer fee and a portion of the potential upside produced by the upsell activity. This is performed automatically. 

    Step 4: Anywhere between 72 to 48 hours before departure, the NFT ticket is transformed into a digital QR coupon. The E-Ticket is once again produced guaranteeing all security protocols for the airline are completed.  
  • NFT Digital Collectibles: The companies are converting their assets into NFTs, such as airBaltic has launched “Planies”, which is an NFT of cartoon aircraft that provides owner access to a number of advantages linked to airBaltic Club, the Latvian airlines’ Loyalty program. Airlines can expand their membership base beyond frequent flyers by designing a loyalty program centered around NFT ownership, allowing anyone with the resources to purchase the Planie to participate.

  • Loyalty Fungibility: Loyalty programs enable companies in the airline industry to provide exclusive rewards tailored to their brand for frequent travelers. Airlines can utilize NFT tickets to offer unique experiences, such as exclusive flight destinations. To earn these rewards, users typically need to accumulate points and miles by completing additional tasks. Airlines can collaborate with other brands to customize the Airpot gift experience. Further, if passengers become frequent flyers, they can unlock more exclusive NFTs, providing further incentives to stay loyal.

    Furthermore, Blockchain is an algorithm that compiles every transaction into a rigid, time-stamped database. As a result, users have the ability to track every transaction easily, which, together with strict regulations, minimizes the likelihood of any form of fraud. 
  • Eliminating fraud and scalping: Black marketing of airline tickets has become common, where tickets are purchased at reduced prices from the source and are resold at a higher price. However, NFT ticketing can eliminate fraud and scalping in the following ways:

    Step 1: When the user purchases a ticket, it initiates the smart contract procedure. This generates and sends an NFT ticket to the user.

    Step 2: The ticket-supply mechanism will ask the user to upload their ticket to IPFS. This will record the ticket in the database and will transmit it to an appropriate NFT marketplace.  

    Step 3: The user can resell the NFT tickets, which will initiate a smart contract ensuring the transaction’s security. 

As the NFT utilizes blockchain technology, it will ensure ticket authentication and prevent fraudulent activities.

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What Are The Challenges Faced By Airlines When Implementing NFTs?

The future of NFTs and the airline industry looks promising as they promote unique opportunities for improving user experience. Adapting to new trends and technologies, such as blockchain and NFTs, is highly crucial to stay competitive and relevant. However, despite the benefits of NFTs, there are a few headwinds that hinder the widespread adoption of NFTs in the airline industry. It might be challenging at times for the industry, to keep up the pace with issues, such as legal uncertainties, high costs, and technology complexities. 

The key challenge is the high cost of the creation and maintenance of the NFT marketplace. Creating an NFT marketplace needs significant investment in blockchain technology, which could be costly for many airline companies. Further, the management of NFTs requires high technical expertise, which isn’t available in-house. This develops the need to rely on a third party adding additional costs to the overall expense. 

Another challenge offered is the legal and regulatory framework. NFTs remain ambiguous in a number of jurisdictions due to a lack of clarity regarding their legal status. Further, the lack of clarity poses a risk for airline companies that adopt NFTs, as they might be subject to legal regulatory challenges and actions. Hence, airline companies should be careful while assessing the regulatory and legal implementation of NFTs before embracing them. 

Top NFT-Based Airline Projects

  • Uptrip NFT Loyalty Program –
    All of the group’s airlines, such as Lufthansa, Swiss International Air Lines, Austrian Airlines, and more, are engaging in the Uptrip loyalty program. Passengers can earn digital trading cards on these airlines, themed around destinations, aircraft, and holidays. Collecting specific sets of cards unlocks perks like free Wi-Fi, lounge access, airline miles, and more. Uptrip also plans to introduce a trading feature for users to complete their collections.
  • Travala – 
    Travala, a blockchain-based online travel agency, offers a unique opportunity for crypto enthusiasts to utilize cryptocurrency payments when booking flights from a selection of over 600 airlines. The company made its entrance into the world of NFTs by introducing the Travel Tiger NFTs, which were built on the Ethereum network. This collection comprises 1,000 utility NFTs, each offering exclusive benefits such as access to a luxurious escape in the Maldives, a VIP experience at the Singapore Grand Prix, and a journey to Desroches Island in Seychelles, among other perks.

    In their recent Seychelles Travel Drop event, a fortunate smart diamond member won eight travel packages, featuring $3,000 flights for two adults, a Sunrise Yoga session, a Beach picnic, and more. As per an official report, this draw concluded on April 4, 2023, with the travel dates scheduled between May 10 and December 20, 2023.
  • Flybondi – 
    Flybondi, an Argentine budget airline, has embraced cutting-edge technology by introducing flight ticket NFTs. In a collaboration with TravelX in 2022, the airline unveiled its Ticket 3.0 program in March 2023. Ticket 3.0 represents an innovative NFT initiative where every flight ticket is transformed into an NFT for passengers. This forward-looking and versatile NFT initiative was established on the Algorand network, granting passengers the ability to sell or transfer their NFT tickets and even modify passenger names as needed.


NFT holds immense potential to revolutionize the aviation industry. From enhancing booking operations to improving flight information security, NFTs can transform the industry in multiple ways. By incorporating features, such as identity verification, aircraft maintenance, and luggage tracking, NFT has eliminated various crucial challenges encountered by the industry. 

NFTs are definitely not mainstream yet, but they deserve further analysis. Due to their uniqueness and blockchain-based trust, NFTs will be a hot topic in the airline industry in the near future.

Blockchain and NFT marketplace in the traveling sector is likely to become more widespread, not only because of the collectible components but also because NFTs are being utilized to manage customer loyalty programs, including exclusive memberships and the trading of travel services and products.

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