Oneworld airlines alliance member S7 Airlines and Russian Alfa-Bank have collaborated and executed the first in Russia service payment through a letter of credit using blockchain technology.
The calculations with the usage of the letter of credit have been done under the agreement that was concluded between PJSC Siberia Airlines and one of the counterparts, and the details were conducted through Alfa-Bank, the release stated.
“S7 Airlines is the most technologically advanced airline on the Russian air transportation market. We traditionally use the newest solutions and technologies not only to develop our passenger service but also to develop business. By conducting the deal, we have tested the efficiency of smart contracts and realized how blockchain technology could help to optimize business processes and improve the effectiveness of document flow. We are planning to continue cooperation with Alfa-Bank in this respect”, Dmitry Kudelkin, Deputy Director General of S7 Group, said.
The members involved in the deal were provided with Alfa-Bank’s ‘Alfa-business online’ electronic system where they could apply for opening the letter of credit and the contractor provide the bank with the documents on the provision of services.
The deal’s distinctive feature is that it uses two smart-contracts simultaneously. One was used only to open the letter of credit and the other, to close it. The two interacting smart contracts are intended to lessen the potential for code errors and thus, protect interests of the parties of the deal and improve its transparency.
“Using blockchain, the Bank is building a platform, which will protect from non-performance of conditions of financial deals between customers. The more market players (banks, major counterparties, individuals) will carry out deals through the blockchain-based platform for secure deals, the more transparent, fast and cost-effective financial cooperation will be. Today, we are glad to have S7, strong and distinguished company, as our partner in the implementation of modern technologies,” Nadezhda Avdanina, the Director of Alfa-Bank Electronic Business Innovation Centre, noted.
Deloitte CIS provided advice to S7 on the usage of blockchain technology and the company’s specialists also provided legal support to the project.
