There has only been quiet speculation about why Malaysia Airlines Flight 370 presumably crashed into the Indian Ocean on March 8. And we may never know the truth if the black box isn’t recovered.
The chatter about how the world could actually lose track of a jet, though, is growing louder by the day. So are rumblings from media and investors about a certain company claiming that if the aircraft had been equipped with its technology, the plane’s fate and destination would have been known much sooner.
Q. If AFIRS was onboard, how and what would we know about the fate of the plane versus what is known as of today?
If it was, and if it was enabled for triggered data transmission, we would know where the aircraft was when it last had electrical power and we would know the behavior of the aircraft at all times leading up to that point, including altitude, attitude, airspeed, direction/heading, engine state, doors open/closed, and many other parameters.
Q. If AFIRS was installed on the plane would we know exactly where in flight the plane had either crashed or started to experience problems?
Yes. As long as there is electrical power to the AFIRS unit and the antenna is intact, it will keep transmitting.
Q. Is it approved for installations on Boeing 777s?
Here's how it works.
During a flight, this unique Automated Flight Information Reporting System (AFIRS) relays data on demand about things like efficiency of regular operations, fuel savings, dispatch timeliness and much more.
And if the airplane encounters an emergency, the system automatically triggers a real-time streaming of vital data -- normally secured in the black box -- to designated sites on the ground. So the same information officials are now hoping to get their hands on in the case of Flight 370 would have already been relayed -- altogether eliminating the need to recover the black box.
You have to understand that the overwhelming majority of jets in the air still work off of out-dated radar systems that tend to fade over vast expanses of ocean. Conversely, AFIRS provides voice and data communications from any aircraft anywhere in the world to any location with an Internet connection.
The AFIRS works in conjunction with Iridium’s (NASDAQ: IRDM), far-reaching global satellite network, meaning it can send signals over much broader areas, including large bodies of water. Iridium's satellite network was, as a matter of fact, used to detect the final blips from the Malaysian flight.
The problem is that most airlines have yet to deploy the one-of-a-kind AFIRS system.
From an investor's perspective, that bodes well for the small Canadian aerospace company, Flyht Aerospace Solutions (OTC: AMSLF), that owns the patents on and manufactures AFIRS.
Mind you, this isn’t some Next Gen aircraft system waiting for blessings from the Federal Aviation Administration with implementation decades off.
Started in 1998 in Calgary, Alberta, Flyht has more than 40 customers with its product installed on 400 aircraft around the world. The company has already generated about $15 million of hardware sales (rather inexpensive at $100,000 per unit) between 2007 and 2014, from just $1.2 million on R&D spending.
Flyht is currently under contract to provide Airbus with its product on the A320 aircraft family straight out of the factory. And the company received final certification to operate AFIRS on Boeing's (NYSE: BA) 747 and 777 models -- of which there are more than 500 on the planet today.
In addition, Flyht has cracked the huge Chinese market. It has already installed AFIRS in 30 aircrafts and six airlines in China and recently received an order for another 218 units -- representing just 10% of the potential market.
China also recently mandated satellite communications for its nearly 2,000 aircraft by the end of 2017. Sales there are expected to seriously ramp up in 2014.
As important to Flyht's business model as hardware sales are, the company also collects a long-term, recurring revenue stream every month from each unit in operation. President and CEO Bill Tempany expects between $75 and $100 million in revenue from the units currently in operation by the time they all come out of service 15-20 years from now.
It's no wonder the company experienced a 42% increase in year-over-year revenue (or $6 million) for third-quarter 2013. I fully expect that future demand will keep that trend intact, and I suspect Flyht won’t be flying under the radar of many investors for very much longer.
Risks to consider: Shares of Flyht recently plunged 6% in one day, but that’s not surprising considering it trades for only $0.56 with average daily volume around 40,000 -- and that it’s up 100% in the past six months. I’d take some profits and run, too, if I were fortunate to buy that long ago. Expect volatility in any stock trading for pennies.
Action to Take --> This company has everything going for it: solid revenue growth, a recurring revenue model with an 80% gross margin, partnerships with Iridium and future customers in Boeing and China. The notoriety springing up from the Malaysia Airline disaster is going to pique investors’ interest. I think shares have plenty of upside, especially from its current price of $0.56.