The blockchain-based tickets, known as HomaTick, are being developed to offer flexible tickets whereby passengers can book tickets with no set date or destination.
"Presently passengers cannot arrange flights for specific dates in the future. Moreover, it is difficult to buy tickets during peak seasons such as the Nowrouz (Persian new year) holidays. HomaTick is designed to address these issues," the airline said in a press release.
"HomaTick tokens are to be sold for economy-class without including two airports flown to and from. It does not list a specific time, date or flight code," the press release said.
"Travelers would use specific number of tokens for each trip, which will be calculated based on the distance between the two airports."
According to Iran Air, each HomaTick token can be used for an economy-class seat in 100 nautical miles of travel. "For example, the distance between Tehran and Mashhad airports is 410 nautical miles and passengers would need to use 4.1 tokens for a ticket between the two cities."
Blockchain is defined as a digital database containing information (such as records of financial transactions) that can be simultaneously used and shared within a large decentralized, publicly accessible network.
Blockchain technology got traction when cryptocurrencies became popular. Blockchain is the underlying technology of Bitcoin and other digital currencies such as Ethereum. While the cryptocurrencies have unlocked innovation in the digital currency space, Blockchain technology is capable of being employed in non-currency-related areas.
Tokenization is one of the most notable applications of blockchain technology. Tokenization is the process involving the conversion of physical and non-physical assets into the blockchain, which is being employed by industries across the globe.
Flexible tickets used to be common in the days when all tickets were paper, fares were flexible and permitted changes, and people traveled without fixed future dates. However, now that almost all tickets are electronic and fares are highly restricted, they are rare.
"People can purchase tokens gradually and use it whenever they want," says the airline, noting that the tokens are tradable.
The company hopes to reinvent the current ticketing system in Iran. The move can help alleviate the airline's deep financial problems from years of mismanagement, the US economic blockade plus battered demand for air travel due to the coronavirus pandemic.
Back in February, Alireza Barkhor, Iran Air CEO, said the company has $800 million in foreign debt and 30 trillion rials [$117 million] in domestic debt.
"The ministry [of roads and urban development] is unable to solve Iran Air’s problems. Policymakers should come up with workable solutions to the airline’s problems," he said.
High and rising forex rates have resulted in unaffordable airfares for the large majority of Iranians. Tokenizing air tickets would help the people save money for future trips.