Bit Lease An Ethereumbased Solution to Leased Aircraft
Bit. Lease An Ethereum-based Solution to Leased Aircraft Audits Team 8: Andres Florez, Paul Lee, Junaedy Liem & Lyanna Lim
Problem: Current leasing process is highly convoluted Multiple parties generate records in aircraft leasing Manufacturer Aircraft Lessor $ $ Airline Lease Compliance report External auditor Records Aircraft MRO Service $ MRO service MROs Record review is challenging due to a lack of organized and reliable database § Review of physical documents § Rebuild aircraft maintenance history § Verify signatures in maintenance documents of internal auditors vs. regulator’s database § Identify possible modifications to records Current leasing process generates multiple, independent records that mandate costly audits at the end of each lease 2
Solution: Bit. Lease will solve cumbersome aircraft lease audit process Bit. Leases record storage & auditing § Bit. Lease is an aircraft leasing implementation of Ethereum Manufacturer MROs Records Airline Records Bitlease Bit. Lease enables immutable record keeping that benefits lessors & lessees § Enables & enforces smart contracts between lessors, lessees and all other leasing parties § Immutable records on private, permissioned blockchain enables faster, cheaper audits Bit. Lease reduces the cost and time of aircraft leasing audits 3
Solution: High feasibility due to market structure and existing technology Requires only one lessor buy-in Simplifies processes for regulators & lessors Leverages existing Technology • • Once leading lessor adopts Bit. Lease, airlines will follow Lessors are few and concentrated: Top 10 lessors have 66% market share • • Lessors have significant information asymmetry once aircrafts are on lease Physical audit is mandated by international aviation agencies • • • Solution exists in already-established blockchains Airlines already use internal software for MRO purposes Guarantees privacy to all parties involved • • 5 -7 months to deployment Projected expansion to multiple lessess and airlines within one year $770 k investment in exchange for 30% share in Bit. Lease is valued at $2. 4 M 4
Future Work: Potential Upside for other Applications • Oil & Gas Equipment: ü Oil & gas companies which lease drilling rigs and crews from oil-field services companies can utilize blockchain to record equipment lease and equipment repair and maintenance. • Heavy Industrial Equipment: ü Lessors and lessees of land drilling and excavation equipment, heavy construction machinery etc can utilize blockchain to keep records. • Medical Equipment: ü Hospitals and clinics which rent medical devices for fixed-term use can keep records on the blockchain ledger. • Container Ships: ü Charter owners (lessors) and liner companies (lessees) can also utilize this blockchain technology to keep records of lease contract conditions and repair records 5
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