By now, most of us are familiar with the events surrounding Malaysia Airlines flight 370 and Air Asia flight 8501. The Air Asia flight crashed into the ocean, and the Malaysia Airlines flight is thought to have done so as well.
The Air Asia black boxes have been recovered; however, those of the Malaysia flight remain missing. Now, recent reports suggest that Airbus (NASDAQOTH:EADSY) is working on a technology that could make finding black boxes far easier than it is now. What could this mean for the company, its largest rival, and its investors?
Hunting in darkness
In the case of the Air Asia plane, the black boxes onboard the aircraft sank to the sea floor.
Despite pings sent off by the black boxes and the fact that they are actually orange in color, finding and recovering these devices at the bottom of the ocean can be extremely difficult. Weather delayed the recovery of the Air Asia black boxes, and the vast expanse of ocean where the Malaysia Airlines flight likely disappeared hinders the ability to dive and find them.
There have been troubles with black box recovery in the past as well. In 2009, Air France flight 447 crashed into the ocean during a flight from Rio de Janeiro to Paris, but it wasn't until 2011 that the black boxes were recovered.
Since much of the difficulty in recovering the black boxes stems from them being hundreds, if not thousands, of feet underwater, Airbus is developing technology to make black boxes eject from the aircraft and float.
The Economic Times reports that Airbus is working on the necessary certification with the European Aviation Safety Agency to put the devices onboard the A350 and A380, two of the company's largest aircraft.
While the technology may sound somewhat futuristic, it's been around since the 1960s and has been commonly used on military aircraft. As of now, it remains untested on commercial aircraft, but the recent crash incidents have renewed the push for these types of devices.
Some of the arguments opposing with these ejectables have to do with cost. Reuters notes that the cost difference can be significant in percentage terms, with ejectable black boxes running about $30,000, compared with standard models in the $13,000 to $16,000 range.
With ejectable black boxes already onboard military aircraft, if Airbus really wanted to push for these devices, it seems well within the realm of possibility that the aerospace manufacturer could make them workable.
Because of the higher cost of these devices and the extremely remote possibility that they will ever actually be used, persuading airlines to shell out extra cash for them could be a tough sell.
However, new regulations may not make the decision optional for carriers. The International Civil Aviation Organization, or ICAO, has been looking at ways to better track commercial aircraft for years, and the recent incidents have heightened the push.
Reuters reported comments from an ICAO representative who chose to remain anonymous, saying, "The time has come that deployable recorders are going to get a serious look."
Clearly, ejectable black boxes are getting more attention now, and Airbus may be trying to get ahead of the curve. If ICAO does come out with a requirement for certain commercial aircraft to have ejectable black boxes, Airbus wants to be ready to serve the market.
By choosing the Airbus A350 and A380 as the first aircraft for ejectables, the aerospace manufacturer is making a very reasonable assumption. If any aircraft are going to see an ejectable black box requirement, it would make sense that they would be aircraft that usually fly over water. The A350 and A380 are its largest two aircraft and therefore most likely to be operated on long-distance routes over water. Airbus appears to be taking a long-term outlook here both to prepare itself for potential regulations and to gain knowledge of what happens if an A350 or A380 were to crash into the ocean.
For its own part, Boeing (NYSE:BA) rejected the idea of ejectable black boxes last October, citing them as being too risky. The Seattle Times noted that Boeing accident investigator Mark Smith has concerns over unintended ejections, comparing the low rate of missing aircraft incidents with the potentially higher rate of errant ejections. In explaining his position, Smith said, "We need to beware of introducing unintended consequences into the large commercial fleet that is flying."
Airbus has not commented on how long it would be before these black boxes could be available for use other than implying that it will be soon. While Airbus may be forced to absorb the cost of these devices for airlines that don't value them, this cost would be relatively minor compared to the other expenses of manufacturing large commercial aircraft. With the cost difference between current ejectable and conventional black boxes being roughly $15,000, it's not likely to be a significant factor in the purchase of aircraft that cost tens, if not hundreds, of millions of dollars.
Having these ejectables on board also increases the chances of Airbus being able to more quickly learn from future aviation accidents involving its aircraft.
At this point, it seems there is a sharp divide between Boeing and Airbus over whether or not to implement the devices. If no new regulations force manufacturers to add ejectable black boxes, the difference between the black boxes may just become another difference between Boeing and Airbus.
Currently, Airbus and Boeing aircraft retain a few brand-based differences, including the types of controls, extent to which pilots can push a plane before on-board systems intervene, and slight differences in nose shape. There is no widespread agreement on which characteristics are better, so both types continue to exist. If ejectable black boxes remain optional under regulations, then they may also fall into this category.
However, if action is taken to mandate ejectable black boxes, Boeing will have to begin incorporating these devices into its aircraft. In this situation, Airbus would be ahead in the race but, seeing as ejectable black boxes currently exist on military aircraft, a company with the resources of Boeing should be capable of developing the technology. Boeing would incur some expenses here, so investors who take Boeing's position should see new black box regulations as a negative.
Since black boxes don't directly contribute to an airline's bottom line in the same way lower operating costs or a better passenger experience do, this feature is less likely to make or break a significant number of aircraft orders. Instead, it's likely to remain one of many differences between Boeing and Airbus aircraft as each manufacturer looks to set itself apart from the other.
Alexander MacLennan has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.