Another of TAL's accomplishments was an extensive research project in 1955 which resulted in the development of a revolutionary system of aircraft collision avoidance equipment. Although the famed scientist and inventor, Harold Edgerton, had developed the strobe light, Transocean was the first airline to apply this technology.

One of Transocean's flight captains, Andrew Madsen, had thought of the idea for such a system when he viewed a strobe light demonstration in a display window of a photography shop in Frankfurt, Germany, during a layover on a military flight to that city. Upon his return home and over the following months, he began to draw plans for his system and acquired the equipment necessary for his first installation. Madsen's garage was turned into an assembly shop for his project.

Several months later, the first aircraft avoidance system was installed on TAL's 756 by Ray Babb and his crew at Hangar 28. It consisted of seven white strobe lights with a combined candlepower of four million. Each light was placed at a particular point along the top or bottom of the fuselage. Forty times a minute these lights would flash in sequence, one at a time, moving from the tail toward the nose of the plane. This would display the motion, direction, and attitude of the aircraft to any other aircraft within line of sight.

After extensive testing by Transocean, the Civil Air Administration ordered the Madsen Lights, as the system was referred to, so that it could be tested at its center in Indianapolis, Indiana. After an inspection and evaluation was completed in the laboratory, more tests were conducted on a CAA plane under flying conditions. The system was approved and immediately began to attract attention throughout civil and military aviation.