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Captain's Log 05/05/17: MH370 bounty on the high (SIO) seas -  

Darren Chester: ?It is a tragic and sad reality that we may not find MH370?2:52

Minister for Infrastructure and Transport Darren Chester says the search for missing plane MH370 being called off is tragic, but says in years - or maybe months - to come there may be breakthroughs in technology that could find more 'credible' evidence. Courtesy: Sunrise

• January 18th 2017
  
• 4 months ago
  
• /video/video.news.com.au/News/
  

[img=0x0]https://i1.wp.com/pixel.tcog.cp1.news.com.au/track/news/content/v2/origin:video_integrator.k3dG15ODE6x_jp3dZz8sZp_jqO-EGadS?t_product=video&t_template=../video/player[/img]Darren Chester: ‘It is a tragic and sad reality that we may not find MH370’

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Economist’s solution to stalled MH370 search

Robyn Ironside, National Aviation Writer, News Corp Australia Network
May 4, 2017 4:07pm

A UNIVERSITY economics expert concerned by the suspension of the search for MH370 has come up with an innovative suggestion to help restart the campaign.

Professor Luke Connelly from the University of Queensland said a reward “upwards of $100 million” would be needed to act as an incentive for large companies to invest in a search.

He wrote in Aviation Week that one option for funding such a large sum would be getting the reward underwritten by an insurance company — to be paid out in the event the aircraft or black boxes were found.

“Prize insurance is not as uncommon as may be thought,” he said.

“It’s routinely used for ‘hole-in-one’ and other unlikely sports prizes.”

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media_cameraATSB diagram showing the area already searched in the Southern Indian Ocean and the zone where MH370 is now considered most likely to be. Picture: ATSB

The search for MH370 ended in January after contractor Fugro finished scouring a 120,000 square kilometre area of the Southern Indian Ocean, a process that took more than two years.

The zone was considered the most likely final resting place of the Malaysia Airlines’ flight, based on a series of satellite ‘handshakes’ with the Boeing 777.

But since then further analysis and drift modelling has identified another area to the north of the original search zone, as the most probable site of the missing plane.

Despite reports by the CSIRO and the Australian Transport Safety Bureau pointing to the new site, the governments of Malaysia, Australia and China have refused to fund another search.

Prof Connelly said another option was to provide a “menu of rewards” depending on the value of the discovery from MH370.

“If you had a menu of bounties people who found lower value parts of the aircraft would have more incentive to hand them over, and it would create more competition among people searching for the fuselage and the blackboxes,” he said.

media_cameraMH370 search ship Fugro Equator was unable to find the missing plane in the Southern Indian Ocean. Picture: News Corp Australia

Another advantage of a reward for the discovery of MH370, was inspiring a higher level of innovation and investment in search technologies.

“Some companies may be enticed to invest in equipment that enables them to conduct incidental searches, perhaps in joint ventures with specialist firms that supply underwater scanning equipment,” Prof Connelly said.

“For instance, new seagoing vessels may be fitted with more advanced underwater scanning and detection equipment than is generally required for navigation.

“Third-party suppliers of such technologies — which are highly specialised and have a limited market — may, for instance, engage with ship builders to extend their market … perhaps with profit-sharing arrangements.”

The disappearance of the Boeing 777 remains one of aviation’s greatest mysteries with no official explanation provided for its sudden change of course and apparent “ghost flight” towards the Southern Indian Ocean.

There were 239 people on board the flight from Kuala Lumpur to Beijing, including six Australians.

Federal Transport Minister Darren Chester has indicated the search would only be resumed if credible new evidence about the plane’s whereabouts becomes available.

Originally published as Bright idea for finding MH370

Rewarding idea for MH370 search
12:00amEAN HIGGINS
The southern Indian Ocean could see a rush of maritime bounty hunters probing the depths for the wreckage of MH370.

Rewarding idea to restart MH370 search

• Ean Higgins
  
• The Australian
  
• 12:00AM May 5, 2017
  

[img=0x0]https://i1.wp.com/pixel.tcog.cp1.news.com.au/track/component/author/0573acb566bb47c45e64e4c55a998aba/?esi=true&t_product=the-australian&t_template=s3/austemp-article_common/vertical/author/widget&td_bio=false[/img]
The southern Indian Ocean could see a rush of maritime bounty hunters probing the depths for the wreckage of Malaysia Airlines flight MH370.

Luke Connelly, an economist from the University of Queensland, has put forward the idea of a reward to encourage companies or even private adventurers to restart the hunt for the Boeing 777 which disappeared three years ago.

Writing in Aviation Week & Space Technology, Professor Connelly said it was understandable that the three governments involved in the underwater search had decided to suspend it after covering 120,000sq km without finding a trace of the aircraft.

“The MH370 search has cost Australia, China and Malaysia approximately $US150 million combined,” Professor Connelly wrote in the magazine. “The problem here arises because no entity is likely to benefit sufficiently from finding the aircraft to justify paying the entire cost of a renewed search, however there could be creative solutions.”

Professor Connelly said a large reward could encourage a higher level of innovation and investment in search technologies, and fishing vessels or cargo ships might be encouraged to search for MH370 on the side as they went about their normal business.

“Some companies may be enticed to invest in equipment that enables them to conduct incidental searches, perhaps in joint ventures with specialist firms that supply underwater scanning equipment,” he said.

“New vessels may be fitted with more advanced underwater scanning and detection equipment than is generally required for navigation.”

Professor Connelly said possible solutions included offering a range of bounties.

“An advantage to offering a menu of bounties, rather than a single bounty, is that it may encourage the production of information by finders of lower-value debris that encourages competition to find high-value components, such as the flight data recorder or fuselage,” Professor Connelly said.

MH370 disappeared on March 8, 2014, on a scheduled flight from Kuala Lumpur to Beijing, with 239 people on board. Automatic satellite tracking data showed the aircraft came down in the southern Indian Ocean.

The idea of a bounty for a private exploration to find MH370 was first raised by Malaysia’s Deputy Transport Minister Abdul Aziz Kaprawi.

“There will be cash rewards in the millions (of ringgit) for those who are able to find substantial information or evidence like the fuselage,” he said. One million ringgit is about $300,000.

But the more senior Malaysian Transport Minister Liow Tiong Lai quickly scotched the idea, telling reporters in Perth “it was the deputy minister’s personal view, not the government’s, we are not having any such decision”.

Here is the original article by Luke Connelly, via Aviation Week:

Opinion: How To Revive Search For MH370: Offer A Bounty
Apr 21, 2017 Luke Connelly | Aviation Week & Space Technology

Comments 63

How To Revive the Search for MH370

[/url]The search for [url=http://awin.aviationweek.com/OrganizationProfiles.aspx?orgId=18117]Malaysia Airlines Flight 370 (MH370) has been abandoned, and three years after the Boeing 777-200ER disappeared, it remains one of aviation’s biggest mysteries. So, what next?

I believe there are free-market incentives that might spur entrepreneurs to mount private searches. A market-based solution would entail a bounty to anyone who locates remains of the aircraft.

Locating the wreckage would undoubtedly help the world determine what happened to the Boeing 777. And that would produce benefits to society, globally. The problem is that no one entity may perceive sufficient benefits to finding the aircraft to fund a continued search.

Credit: Royal Australian Air Force

Over the course of almost three years, the MH370 search has cost Australia, China and Malaysia combined approximately $150 million. Understandably, after three fruitless years, they have reluctantly decided to stop searching.

We economists call this a “public-good” problem. Investments in public goods tend to be suboptimal because there is a tendency of those who are not paying for them to “free-ride” on the efforts. The free-rider problem here arises because no entity is likely to benefit sufficiently from finding the aircraft to justify paying the entire cost of a renewed search.

However, there may be a creative solution. A consortium—governments, aerospace companies, airlines and other organizations—could pool funds and offer a bounty to anyone who finds MH370 wreckage. A “menu” of bounties could be offered. Discovering the flight data recorder or fuselage would be of high value, obviously.

An advantage to offering a menu of bounties rather than a single bounty is that it may encourage the production of information by finders of lower-value debris that encourages competition to find high-value components. The risk of offering a single bounty is that locators of low-value parts may be inclined to treat their findings as high-value private information, since such discoveries (if kept private) may enhance their probability of claiming higher-value targets and bounties. Conversely, private information of this kind may enhance investment in finding high-value targets, and the trade-offs between the values of private and public information, and their effects on incentives and behaviour (e.g., investment) would need to be weighed carefully.

Suppose for argument’s sake that a single bounty, perhaps $100 million, were offered for the location of the aircraft’s fuselage or flight data recorder. One possibility is that dedicated bounty hunters would respond by investing to find the debris. Another is that some companies would be enticed to invest in equipment that enables them to conduct “incidental” searches, perhaps in joint ventures with specialist firms that supply underwater scanning equipment.

For instance, new seagoing vessels may be fitted with more advanced underwater scanning and detection equipment than is generally required for navigation. Third-party suppliers of such technologies—which are highly specialized and have a limited market—may, for instance, engage with ship builders to extend their market, perhaps with joint-venture and profit-sharing arrangements in the event of a discovery that gives rise to a bounty claim.

Whatever bounty options are optimal, at least two options exist for raising the bounty via public or private sources, or both. The capital for the bounty could be raised directly and invested until it becomes due. Another option may be to announce the bounty terms and conditions, with an insurance policy to cover its payment. In the latter instance, the consortium would need to raise the premium, which would be calculated based on the “risk” that someone is able to collect on the policy. 

Luke Connelly is a professor at the University of Queensland, Australia, and the acting director of its Center for The Business and Economics of Health.
 
The views expressed are not necessarily shared by Aviation Week.

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