Blockchain-based distribution provider TravelX this week is putting up for sale what it's calling the "world's first non-fungible token flight ticket series," which the company said is a first step in a protocol that will reshape airline distribution and perhaps the way corporate travel teams work with airline partners.
The project is the latest foray in building a blockchain-based distribution platform, following some efforts that have been underway for several years. Winding Tree, for example, was among the first to launch in the space, aiming to develop a "new economy" across the travel supply chain and has since been adding supplier partners. Blockskye also has been building a platform to connect buyers and suppliers via blockchain technology, attracting an investment from ARC in 2019.
TravelX is a newer entrant, having launched in 2021 and boosted by a $10 million seed funding round announced last month. Its CEO and cofounder, Juan Pablo Lafosse, also founded Latin American travel company Almundo and before that was chief commercial officer of Aerolineas Argentinas. Former CEO of Orbitz Worldwide Barney Harford also is acting as an advisor to the company.
The focus now is "converting tickets into an NFT," chief commercial officer Francisco Vigo said. For the uninitiated, NFTs are a unit of data on a blockchain that can be traded but, as "non-fungible" would indicate, are unique and not interchangeable—compared with currency, for example. Those with a passing knowledge of NFTs likely associate them with pricey images of cats and apes and other celebrity tie-ins that sell for obscene sums, but they've already been making some appearances the travel world. Marriott, for one, in December partnered with digital artists to create NFTs that it gave away as part of a Bonvoy promotion at a Miami contemporary art fair.
TravelX is debuting its NFTs in no less splashy a way, launching a limited set of "NFTickets" for an Air Europa flight to Miami later this year at an event at the Eiffel Tower on Monday and combining them with artworks, but the aim is to "add real-world application and experience" to the traditional NFT, according to TravelX co-founder Facundo Diaz.
Following the event, TravelX's next step is to build a platform where NFTickets are available, with plans to "start going more massive to the public" later in the year, Vigo said. At the same time, TravelX is building protocols "for an NFT to be identical to an e-ticket," meaning it is constantly updated for schedule changes and bound by rules, via smart contracts, setting parameters around, for example, for how much or when it can be sold, he said.
The protocol could lead to NFT airline distribution innovation outside of the TravelX platform.
"We are doing a lot of alliances and partnerships, not just with airlines but other suppliers," Vigo said. "We are intending to be a community here, as we know that a company might not want to implement a particular platform."
For airlines, one of the aims is to reduce distribution costs, cutting out intermediaries and making it easier to work across borders. From a corporate travel perspective, however, one of the biggest impacts of NFT-based air tickets is that the tokens are exchangeable, allowing for different buying strategies, according to Vigo.
"The NFT can be exchanged as many times as necessary until 48 hours before a flight departure," he said. "A corporation, for example, would be able to buy 100 tickets from Miami to Madrid, making an agreement, and start exchanging those NFTs."
Beyond air tickets, Vigo said NFTs could have other use cases in the travel industry, including packages with hotels or in loyalty program management.
In the last few weeks, Lufthansa-led research group TNMT released a report noting that while NFT hype has fizzled a bit this year compared with last year, "2022 will likely be a good year for NFT startups," and they are poised for growth in the travel industry as well. Other potential uses include creation of "NFT passports" for travelers to use throughout their journey. San Marino, for example, last year began issuing Covid-19 vaccination passports with their validity linked to an NFT on a public blockchain, according to TNMT.