The Trivial Cost of Certainty

Doing nothing, despite a clear need and available technology, is always an option if it can be demonstrated that the costs are prohibitive. This seems to be the emerging case regarding “streaming” of flight recorder to a ground station, as has been suggested in the wake of the mysterious disappearance of Malaysian Airlines Flight 370.

The wreckage of the airplane has not been pinpointed; whatever caused the crash is doubtless encoded in the recorders — both flight data and cockpit voice recordings — which are housed in the tail section of the airplane. They are ensconced there in the belief that the aft section is the most likely to be least damaged, as the forward sections of the airplane will impact first and absorb most of the destructive forces.

Flight data sitting at the bottom of the ocean is of no use

Flight data sitting at the bottom of the ocean is of no use

However, if as is widely believed, the airplane crashed into the Indian Ocean off the west coast of Australia, no wreckage has been found. The batteries powering the recorders’ locator beacon have long exceeded their 30-day time for providing essential power.

The frustration with the utter disappearance of the airliner has renewed interest in “streaming” the recorders’ information before the crash. In the event of an unexpected scenario, the recorders’ vital information would be transmitted from the stricken airplane to orbiting satellites overhead, for subsequent beaming back down to a ground station. The airplane’s location, its flight attitude, and other essential parameters captured on the flight recorders would be available almost instantly to those on the ground searching for answers.

The technology exists. Known as the Automated Flight Reporting System, or AFIRS, it beams flight recorder information to orbiting satellites when trouble with the aircraft is sensed. AFIRS was developed and is marketed by a small Canadian company, FLYHT Aerospace Solutions, Inc.; since the disappearance of Malaysia Airlines Flight MH370, the company has been busy marketing AFIRS.

FLYHT Chief Executive Bill Tempany told the Washington Post newspaper that AFIRS installation costs about $120,000 per airplane.

The cost for multiple installations adds up. Delta Air Lines operates a fleet of 764 airliners; equipping all airplanes with  AFIRS totals about $90 million.

For the whole U.S. fleet of approximately 4,000 airliners, the installation cost would be approximately $480,000,000.

The cost appears prohibitive. But let’s look closer. According to its website, Delta Air Lines reports it has $2.8 billion in “free cash flow” that it is using, in part, to reduce net debt levels by $2 billion. If 5% of this $2 billion — $90 million — were invested in the safety of all the company’s aircraft, that sum puts the investment into replacing 20-year old crash resistant recorder technology in perspective.

Actually, the price per year could be significantly lower. Let’s continue with the example of Delta. Assume the airline retires its aircraft after 20 years of service. In a steady state illustration, for simplicity of argument, the airline would have to buy 38 new replacement aircraft annually. At $120,000 per installation, adding 38 AFIRS would impose an annual added cost of $4.5 million to the annual purchase price (big jetliners now selling for $100 million to $150 million apiece, or more). $4.5 million is practically lost in the rounding when a company is spending approximately $3.8 billion a year on new airplanes.

And, surely, Delta can get a good deal from the manufacturer if it commits to buying many airplanes over the course of years, all built to a standard configuration. It is not unusual for Airbus or Boeing to offer discounts of 20% or more on bulk orders. As cost of a package deal, the price of AFIRS is trivial.

If a small operator like Canada’s First Air, which operates a half-dozen airliners in the Canadian Arctic, can afford AFIRS, large operators are better positioned to absorb costs. Qatar Airways, which operates a fleet of more than 130 airliners, recently announced its intention to “stream” flight data information. At $120,000 per installation, Qatar announced a commitment of $15.6 million, over multiple years.

Here is another way to put the $120,000 cost per AFIRS installation in perspective: seat-back entertainment systems. The video displays are expensive, because the electronics must be separated completely from the airplane’s avionics, and they must be fireproofed. One estimate places the cost if in-flight entertainment system displays at an astonishing $10,000 per seatback. Let us halve this price to $5,000 per seat. This means the cost of equipping a 200-seat jetliner with seat-back entertainment displays approximates $1 million, or roughly ten times the cost of AFIRS.

One would bet that equipping the fleet, deliberately over years, to an AFIRS-like configuration would play well with airline insurers. There are cost savings to the technology that go well beyond $120,000 per system.

It is estimated that the search for the missing Malaysian B777 has totaled some $240 million for the various governments that have committed ships and aircraft to the ongoing search. That sum is roughly 2,000 times the cost of a single AFIRS installation. The cost of AFIRS equipage would surely meet the most demanding government-imposed cost-benefit calculation. Again, given a U.S. airline fleet of about 4,000 jetliners, assuming a 20-year installation period, the annual installation cost would amount to $24 million. Given the cost, thus far, of the international search for the missing jetliner, the $24 million price of AFIRS data-certainty is one-tenth that of the we’ve-got-nothing search for the wreckage.

To say nothing of the next of kin, the airline, the regulators, the manufacturers, and the investigators — they are left with maximum uncertainty. For the next of kin, there is the incalculable sense of loss. For the regulators, manufacturers and airlines, the lack of data hobbles any corrective action to make sure another airplane isn’t lost under the same or similar circumstances.

The U.S. Federal Aviation Agency preaches the ethic of “data driven safety”. But when there is no data, safety cannot be assured. In the grand scheme of costs and benefit, the price of AFIRS, or a similarly capable system, seems worth more than a few rows of in-flight entertainment system screens. Seat-back television fills the bored mind with vacuous “entertainment”. AFIRS promises to fill enquiring and responsible minds with hard facts.