Tracking the Costs of Aircraft Tracking

Another IATA Annual General Meeting has come and gone and the industry had plenty to talk about. The US3 v ME3 open skies/subsidies noise was everywhere, though little in the way of real discussion as opposed to cheap shots and innuendo. It was actually rather pathetic from both sides, to me. Passenger and aircraft safety was another popular topic with plenty of lively discussion. From an industry perspective action may have appeared a bit slow on the aircraft tracking efforts, with still no formal consensus on a plan, though we are inching ever closer. And several airlines indicated they are not waiting for a global standard to be established; they are tracking their planes today using metrics which they feel are best suited to their needs.

Alaska Airlines CEO Brad Tilden expressed some surprise at the slow pace of progress, drawing parallels to the single-engine planes he flies:

All we need to do is take that [ADS-B] technology and beam it up to satellites. I think we have a solution. …I don’t think the answer is that tough.

Of course, he also acknowledged that there is more to it than just that, but the overall tone of the point was not lost on the panel nor the crowd.

And, while it is rare to hear airline executives mention the costs of such efforts – after all, how do you put a price on passenger safety?? – that aspect of the discussion came up several times at this year’s event; it is clearly part of the discussion and the decision making process when airlines are making decisions. Lufthansa Group CEO Carsten Spohr claimed one of the most aggressive tracking regimens for the company’s planes. They are sending positional data every 5 minutes when outside of radar-controlled airspace. And he mentioned the cost concerns:

It is a costly thing which we are spending too much money on at this point. The industry needs a cheaper solution.

Spohr was not first to broach the subject, however. That honor fell on the shoulders of TAM CEO Claudia Sender who was not necessarily concerned with the specific dollar costs but more wondering what everyone plans to do with all the data being collected.

The key here, and what we’ve been discussing, is when we develop a worldwide system and it is a standard for everyone how do we manage the quantity versus the quality of the information to not get overloaded. Otherwise we may create very expensive systems which do not add the value that the industry needs.

And, of course, they’re all correct in one manner or another. Having the data is useful but there is nothing in the industry worth an unlimited price point. No one wants to talk about it but there is a very real price on safety and it is one which must be balanced against the returns it offers.

Random question of the day: If airlines charged a fee to use seatbelts, would you pay up or just risk it? #AvGeek

— Scott Mayerowitz (@GlobeTrotScott) June 8, 2015

We know the value of using seat belts versus not and so we accept that they are a requirement on board and part of the cost of doing business. But that is, in large part, because of the individual damage we’ve seen in accidents without them. And we can put a number on that care. Then again, Malaysia Airlines CEO Christoph Mueller chimed in later suggesting that perhaps part of the cost burden issue comes from other regulations, not just the tracking:

Those [tracking] devices are readily available to order from the internet for less than $1000 in comparison to a business class seat which costs $50,000 because it has to withstand 14Gs or something ridiculous like that. No one will survive 14Gs but the seat is still intact. The solutions we are talking about are cheaper than a business class seat.

Again, there is data to suggest that the 16G testing (not 14, as Mueller suggested) actually does provide demonstrable value and that’s why airlines and, ultimately, passengers pay for it.

No, seriously, Mr Müller, tell me more about how crash-testing is overrated. #paxex #IATAAGM pic.twitter.com/IeSRq4BNw8

— John Walton 🏳️‍🌈🇪🇺 (@thatjohn) June 8, 2015

It is hard to say that any one group is right or wrong on this, but at least the cost factor is now out in the open and part of the discussion. That’s a good thing for the industry.