Investing in Black Box Recorders and Beacons

Yet another commercial flight has been lost in Southeast Asian seas.

First it was Malaysia Airlines Flight 370. Now it’s AirAsia flight QZ8501 — commuter jets swallowed up by the vast oceans.

The AirAsia flight was bound for Singapore from the Indonesian city of Surabaya on Sunday. After hitting a fierce patch of stormy skies, the flight lost contact with air traffic control and disappeared.

Search and rescue crews have been scanning the seas, but there is still no trace of the Airbus jet. Over 160 people are missing. Eighteen of them are children.

Tragedies like these remind us that the open water is the Earth’s ultimate communications wasteland. It’s so easy to disappear in the ocean.

About 71% of Earth’s surface is water, and practically ALL of that water is in the oceans. The Pacific basin, where these planes disappeared, spans more than 63 million square miles.

That’s bigger than all the dry land on Earth combined.

But travel and trade are not daunted by such size. Thousands of ships and jets cross the Pacific every day, and they need to be tracked.

In the event that the unthinkable happens, these craft need to deploy distress beacons so rescue teams can find them.

It’s tricky to deliver a solution that works. These missing flights should be evidence enough of that fact.

Yet there are companies working hard to provide search and rescue solutions that are robust enough to be found in the void. One such company is a small French outfit that has been pushing toward bigger things.

A Beacon Stock

France’s Orolia Group (EPA: ALORO) owns seven different brands of seaproof tracking solutions under the name The McMurdo Group.

This combines McMurdo, Boatracs, Kannad Aviation and Marine, and Techno-Sciences Inc (TSi) under a single umbrella and offers solutions such as beacons, satellite connectivity infrastructure and positioning software, and emergency response management systems.

McMurdo Group’s mission is to become the global leader in search and rescue products. It spent a significant amount of money to expand in 2014 and is pushing further into America.

In May, it completed its acquisition of TSi, a company that has been operating in the global search and rescue market for 32 years, with satellite ground stations in more than 20 countries. Its customers include NASA, NOAA, and the U.S. Navy, to name just a few.

McMurdo is engaging in an expansion program in the Americas, which includes the U.S., Canada, Latin America, and the Caribbean.

“McMurdo is poised to leverage its success and reputation as an industry leader into new revenue and growth opportunities across the Americas, a critical search and rescue region,” said Randal Maestre, the company’s new VP of Sales in the Americas. “We have all of the elements to be successful–a comprehensive collection of search and rescue technologies, a global customer list that rivals that of Fortune 500 companies, a customer-focused regional sales and marketing team and, very soon, an Americas wide distribution and dealer network.”

In the United States, McMurdo would compete with Drew Marine, another conglomerate focusing on aquatic solutions.

Like McMurdo, it controls a number of SAR brands, including ACR Artex, Alexander Ryan Marine and Safety, Comet, Oroquieta, Pains Wessex, and Aurora. Unlike McMurdo, Drew Marine doesn’t concentrate solely on search and rescue. It also provides chemical, equipment, and maintenance solutions to the marine industry.

A Black Box Stock

Even with the most current technology, it’s really hard to find a craft lost in the ocean.

Noncommercial aircraft and sea vessels can communicate their distress to the international satellite beacon system known as COSPAS-SARSAT (Search and Rescue Satellite Aided Tracking). It works on the 406 MHz radio frequency, and even a brief ping to the geostationary satellites can send an alert to local rescue terminals.

Since its launch in 1982, it’s been responsible for the rescue of more than 37,000 people worldwide and 7,300 in the United States alone.

Finding an already-downed commercial aircraft underwater is a slightly different affair. Commercial aircraft are outfitted with underwater locator beacons that operate at an acoustic frequency of 37.5 kHz. They send out an audible ping that is heard by underwater acoustic transponders.

The main problem with this system is that the maximum detection range is only between two and three kilometers, so it’s not really a distress call so much as the faint heartbeat of a fading onboard flight recorder.

Still, the FAA requires that all aircraft manufactured after 2010 have flight data and cockpit voice recorders. These are the machines that carry the underwater locator beacons.

One engineering company that makes the actual black box pingers is HEICO Corp (NYSE: HEI). It ended its fiscal year on October 31 with record net sales and profits for the year. Sales had increased 2% year over year, reaching $292 million. Profits increased to $32.1 million for the year, and the company forecast approximately 8% to 10% growth through 2015.

The company produces a wide range of products for the aerospace industry, and it makes flight recorders for commercial airliners and spacecraft.

It’s one of only a tiny handful of companies that can say it has its products on the surface of Mars and, as of recently, a member of the even rarer group of companies that have their products screaming through space on the surface of a comet.

If you’re investing in communications, consider the critical nature of emergency communications. These are the instances where even the most rudimentary blip could mean the difference between recovery and missing forever.

Good Investing,

Tim Conneally

 @TimConneally on Twitter

For the last seven years, Tim Conneally has covered the world of mobile and wireless technology, enterprise software, network hardware, and next generation consumer technology. Tim has previously written for long-running software news outlet Betanews and for financial media powerhouse Forbes.