|Once considered a luxury, transponders and encoders are now a requirement. Back in the 70's, the average cost of a transponder was around $2,500. Today a new transponder costs around $1,800. A good transponder will probably last you about ten years, and the new ones are pretty bulletproof.
Why do we need a transponders? Before transponders, pilots had to fly their aircraft in a box-shaped pattern in order for ATC to locate them on radar. Now the transponder helps ATC locate and identify transponder equipped aircraft with ease. No more fancy flying; it's a virtually automatic process.
Primary and secondary targets are tracked by ground stations. When a ground station tracks a primary target, it is tracking anything in the air that does not have a transponder. When it tracks a secondary target, ATC sees an aircraft with an operational transponder.
One of the most important rules of transponder operation is this: Know Your Modes.
Transponders can have a several different modes: A, B, C, D and S. Modes A and C are commonplace in the United States. Modes B and D are most commonly used in other countries. Mode S is the newest mode for civilian use (the military has been using it for sometime now).
When Mode A is used, it transmits a group of coded pulses. These codes consist of four digit identification numbers that have been assigned by ATC. ATC will announce that code to you and you will enter it in to your transponder. Once you enter it in, it is sent back to ATC as a Mode A reply. ATC can then identify each aircraft that has an operational transponder by its distinct, coded number.
Mode C takes it one step further. If the aircraft is equipped with an encoder and altimeter, ATC will actually see the flight level altitude. So, if you have a Mode A/C, transponder, which most of you do, ATC will be able to see your coded number and altitude information.
With Mode S, ATC gets even more information. If you have a transponder like the King KT 70, it will allow the ground station to identify you by your aircraft address. Your aircraft address is the information about your aircraft assigned to you by the FAA. The KT 70 is a Mode A, C and S transponder, therefore, ATC is able to get all of the aforementioned information about aircraft.
Another important bit of information about your transponder is knowing whether or not it complies with TSO (Technical Standard Orders) C74b or C74c. The Aircraft Electronics Association has created a long list stating which transponders are TSO compliant and which transpondersif not compliantcan be modified to meet the TSO requirements. Some of the older Narco AT-50's and the King KXP 750's require such modification. If in doubt about your transponder, call your local avionics shop. They should be able to tell you if it is legal or not.
Just a little side note. With the sophistication of transponders, some pilots might think ATC is always watching out for them. That is not always the case. There are some aircraft ATC cannot see at all. For example, if a composite aircraft does not have a transponder, it might not reflect on the radar.
Also, in busy areas, ATC has the ability to select only certain aircraft. The ground station may by concerned only with Mode C or S transponders. This might eliminate some aircraft from their view. So, whether you are flying VFR or IFR, it is always important to watch for other aircraft in your vicinity.