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Airport Policy and Security News #82

Aviation Security Needs Rethinking, Says Rand Experts

Robert Poole
September 11, 2012

In this issue:

Aviation Security Needs Rethinking, Say RAND Experts

How much is enough? Do we get enough bang for the buck, when it comes to TSA’s approach to aviation security? These are questions I’ve been asking in this newsletter since the creation of the Transportation Security Administration. And now the homeland security experts at RAND Corporation have produced a thoughtful report addressing many of these issues in some depth. I strongly recommend “Efficient Aviation Security: Strengthening the Analytic Foundation for Making Air Transportation Security Decisions,” by Brian A. Jackson and five RAND colleagues. You can download this 183-page report from: www.rand.org/content/dam/rand/pubs/monographs/2012/RAND_MG1220.pdf.

The authors point out that the “cost” part of cost/benefit analysis needs to include not only the $6.5 billion that TSA spends on aviation security each year but also the costs to airlines, airports, and passengers, which they estimate at $7.4 billion, for a total of around $14 billion annually. “When the system being protected is as valuable economically as aviation, even a small reduction in its usefulness and value adds up quickly, making security potentially much more costly than might be assumed,” co-author Brian Jackson told Air Transport World.

The RAND authors raise good questions about the TSA’s much-touted “layers” of security, which can alternatively be viewed as simply piling on another program in response to each new threat, without ever considering whether some of the previous layers are now redundant. Continuing to add more layers can be “rewarded by less and less enhancement of overall system performance,” the report gingerly puts it. Thinking more critically about layers in a risk-based context, Jackson suggests that “the information and analytics that goes into making that risk decision” can be thought of as “the first layer which then informs what you do at the other layers.” As he told Aviation Daily, “You can’t just [reduce the argument to] ‘more layers is better.’”

The report acknowledges the analytical difficulty of defining the benefits of aviation security measures. It’s just about impossible to know how many terrorist incidents or deaths are prevented by various measures. But as the analytical work of John Mueller and Mark Stewart (cited in the bibliography) has shown, it is possible to do break-even analysis to calculate how much risk reduction a given security measure would have to achieve to be cost-effective. Chapter 6 of the report uses the example of the Federal Air Marshal program to illustrate this point, concluding that the FAMs would have to be stopping or deterring terrorist attacks on far more flights than they actually just fly on to justify that program’s cost.

Perhaps the most important contribution this report makes is drawing attention to the future of federal aviation security in an era in which all federal spending will be facing cutbacks. So let me close with a long quotation from the report that focuses on this point.

“For organizations and people charged with protecting citizens from harm, the potential for cuts in resources is always difficult to consider and implement, and there will always be an understandable trepidation to make cuts out of fear that imprudent action will undermine effective security efforts. . . . But if a sufficient analytical basis for assessing security measures and strategies is available, these trepidations might be reduced and resource constraints converted from a crisis into an opportunity. Constraints force choices, which in turn force evaluation to help ensure that we are not spending limited national resources in ways that are not achieving what they are intended to achieve. In aviation security, where the total cost of the national effort has expanded significantly since 9/11, such an evaluation could pay dividends not just in reduced national expenditures, but also by helping to identify ways to get better security for less cost—more efficient aviation security—that could make our homeland security efforts more sustainable and make the country better off in the long run.”

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Sequestration’s Overblown Threat to Airports

Don’t let that headline mislead you into thinking that I dismiss the threat of sequestration as of early next year. Congress has painted itself into a corner by enacting the Budget Control Act of 2011, mandating a $1 trillion cut in non-entitlement spending over 10 years unless the two houses could agree on some other deficit-reduction plan—which they have not done. That’s $100 billion per year, with 50% to come from the defense budget and the other 50% to come from non-entitlement, non-defense spending—i.e., everything else the federal government spends money on, including the FAA. The generally accepted estimate is that this would require an 8.5% cut in FAA’s nearly $16 billion budget for 2013—about $1.35 billion.

That’s not chicken feed, and a cut of that size would hurt. But what would its specific impacts be? First of all, the Budget Control Act specifically exempts certain user-tax-funded trust fund expenditures, including highway grants from FHWA and airport grants from FAA. So unless Congress votes to un-do the exemptions, the $3.35 billion Airport Improvement Program would continue, with the cuts having to come from the rest of FAA’s budget.

That brings us to a ridiculous report from the Center for American Progress by staffer Scott Lilly. He notes the exemption for AIP and arbitrarily assumes that the $2.75 billion Facilities & Equipment account would also be off-limits. So the $1.35 billion cut would all have to come from the $9.7 billion Operations account. Since that account is mostly salaries, and mostly for controllers, he goes on to crunch some numbers on how many controllers would have to be laid off. Since the largest airports handle the bulk of all passengers, his calculations find that the required cuts would do the least damage if “towers” were shut down at all airports with 600,000 or fewer annual enplanements. (He’s apparently never heard of TRACONs and Centers, where the majority of controllers work.) To attract attention, he posted a list of those airports on CAP’s website, anticipating this would create a lot of angst and political backlash in communities like Sarasota, Florida (which it did). To keep the pot stirred, 10 days later Lilly released a sequel, suggesting an alternative that would avoid layoffs: the FAA would simply furlough all controllers on every Friday in 2013, shutting down all air traffic on those days.

This is obvious nonsense. A far more sober assessment comes from Rich Efford, a former congressional budget staffer now at Aerospace Industries of America. He suggests, quite realistically, that neither the FAA nor Congress would countenance shut-downs of ATC facilities or smaller airports. The path of least resistance would be what it always is: sacrifice capital investment to preserve current operations. So the $1.35 billion in cuts would come, in all likelihood, from the $2.75 billion Facilities & Equipment account, thereby further delaying implementation of the NextGen air traffic modernization.

That’s a horrible outcome, and is yet another consequence of the cockamamie way in which we fund air traffic control in this country. (Nearly all other civilized countries use a fee-for-service system in which aircraft operators pay fees directly to the ATC provider, insulating it entirely from government budget constraints.) But there is essentially zero threat that airports will be shut down due to layoffs or furloughs of air traffic controllers.

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Mission Creep in TSA’s Behavior Detection Program

For at least the second time in two years, the media have revealed TSA Behavior Detection Officers (BDOs) going out of their way to target people they think might be carrying drugs or be illegal aliens. Why? Because their TSA superiors, presumably under pressure from headquarters to make the program look good, demand higher numbers of referrals to law enforcement as a measure of the program’s “effectiveness.” In other words, if you never, ever detect a terrorist, you’ve got to have some kind of numbers to show to Congress so the money for the program keeps flowing.

The latest incident, at Boston’s Logan Airport, was the result of investigative reporting by the New York Times, and involved the expanded program at Logan under which instead of merely observing travelers in the screening lines, the BDOs assertively chat up people to see if they can find a pretext to refer them either for additional screening or to law enforcement. And due to the assumption by some BDOs that black and Hispanic travelers are more likely to be carrying contraband or have immigration problems, people in those groups were grossly over-represented in BDO referrals. A similar situation was uncovered at Newark a year or so back under the more common BDO program called SPOT. The New York Times article made it explicit: It was “officers and managers’ demands for high numbers of stops, searches, and criminal referrals” that had led to the problem.

As former Reason editor Virginia Postrel pointed out in her blog, this is mission creep, of the worst sort:

“The TSA has no business looking for drugs, outstanding arrest warrants, or immigration problems unless it has serious reason to believe that the person involved poses a serious threat to air safety. If it is going to serve as an extension of every other sort of law enforcement, then its searches should be subject to the same requirements for probable cause, which would allow almost everyone to travel without submitting to TSA examination.” (www.dynamist.com/2429/mission-creep-leads-tsa-to-racially-profile-in)

As I have written here previously, there is still no independent scientific basis for behavior detection as an anti-terrorist program. The GAO first made this point in a May 2010 report to Congress, citing a detailed report to that effect from 2008 by the National Research Council of the National Academy of Sciences. In follow-up congressional testimony in April 2011, GAO’s Stephen Lord noted that TSA had contracted with American Institutes for Research for a validation study of the BDO program, but no such report has ever been released. And Lord pointed out that because no systematic data had been collected prior to the study being commissioned, “meaningful analysis” would be impossible. Yet Congress each year adds more money to expand the BDO program, at TSA’s request—expanding mission creep each time.

But I was pleasantly surprised to learn that this may be changing. Rep. Bennie Thompson (D, MS), the top Democrat on the House Homeland Security Committee, has called for TSA to suspend operation of the BDO program. In an August 13 letter to TSA Administrator John Pistole, Thompson demanded a third-party study of the program’s scientific premise, a comprehensive risk assessment, and a cost-benefit analysis, so that Congress would have a basis to decide if the program should be re-instated. By a third-party study, I hope he means one not commissioned or paid for by either TSA or parent agency DHS. How about someone like RAND Corporation?

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Airport News from Europe

British Airways and BAA (Ferrovial) have rejected a funding scheme proposed by architect Lord Foster on behalf of the Mayor of London for a new airport in the River Thames estuary.

Lord Foster had identified a means of raising £33 billion to pay for the estuary airport – principally money secured through landing charges at the new airport and the closure and redevelopment of Heathrow. His study said the new estuary airport would cost £20 billion to build, and a further £3 billion would be needed for a rail link connecting the site to the high speed line between the Channel tunnel and St. Pancras station, taking the total bill to £23 billion. The proposal was to take £8 billion from the landing charges levied on airlines using Heathrow between 2018 and 2028. A further £11 billion would be raised through landing charges levied at the new airport during the decade after its opening, starting in 2028. Meanwhile, the closure and redevelopment of Heathrow would secure £10 billion for the estuary airport. Finally, £4 billion would be obtained from the development of land around the new airport for facilities needed to support it.

But both BA and BAA denounced the funding plan. BA CEO Willie Walsh declared it “crazy” for Lord Foster to propose that funding should come partly through landing charges paid by airlines operating at Heathrow. BAA declared its parent (the Ferrovial consortium) was not interested in the idea of relinquishing the airport in exchange for a controlling stake in the new hub, that redeveloping Heathrow would lead to a property glut, and that foreign companies that had put their European headquarters near the airport could seek to move.

Meanwhile, Ryanair CFO Howard Millar said Ryanair is prepared to take a 25% equity stake in London Stansted Airport by participating in a group which may bid for the airport. He said the carrier is prepared to make “a modest commitment” as “anchor tenant” to guarantee future growth at the airport (Can anything Ryanair does be guaranteed?) and has been examining proposals from five or six groups, from which one or two serious bids are likely to emerge. Mr. Millar argues that Stansted is the only place in London where another runway can be built, which is accurate at the moment while the coalition government refuses to allow a third one at Heathrow, and Gatwick Airport is restricted by a legal covenant from building one until 2019. A number of companies have expressed interest in Stansted, including Korea’s Incheon Airport Corporation, and Manchester Airports Group, which is seeking a strategic investment partner (probably Australia’s Industry Funds Management) to mount a bid. Stansted’s current valuation is on the order of £1 billion.

In non-U.K. news, Germany’s Berlin Brandenburg International (BBI) Airport’s opening date had already been put back twice, recently to March 2013 but has been delayed again to October 2013. The publicly financed airport, based on the existing Schoenefeld Airport in the old East Berlin, began life early in the previous decade as a privately financed one before legal challenges to the award of the contract were issued and public opposition to it grew. The airport has incurred €1.2 billion in cost overruns, threatening the viability of the project, which has already lost over €80 million in landing fees.

The June 2012 opening date was unexpectedly stopped in May 2012 due to “problems with fire safety systems” and vaguely deferred to March 2013. A previous delay had been attributed to difficulties with scanning systems.  Many in the industry are at a loss as to understand how these matters could account for such a severe delay on their own but no other causes have come to light or been put forward. Moreover, such safety systems are so fundamental to the operation that it is difficult to imagine how they could have been overlooked until so late in the day. Reports indicate the airport's fire protection system remains problematic and the facility's ventilation system has not yet been completed.

The airlines are up in arms, most notably Air Berlin, which is trying to metamorphose from a budget airline into a full service, alliance member carrier, and also Lufthansa. Air Berlin has even been forced to sell eight aircraft to improve its deteriorating finances and help cut debt by €300 million by the year-end though that is not all due to the BBI debacle. While the uncertainty continues, and escalates almost by the day, the lingering question is: Could the private sector have made a better job of it?

This information (which is believed to be correct at the time of writing) and comment is by David J Bentley of Big Pond Aviation, Manchester, UK. www.bigpondaviation.com

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Risk-Based Screening Still Expanding

TSA continues adding airports to the roster of those offering PreCheck, its modest start on a Trusted Traveler program (though still without either a real background check or a biometric identifier). It appears to be on schedule for reaching its 2012 goal of having the program in 35 airports by year-end. United Airlines, for one, recently announced that it expects to have PreCheck available at 24 of the airports it serves by that point.

Since travelers who are not upper-level members of airline frequent flyer programs are still not eligible, the DHS’s Global Entry program, aimed originally only at those flying  internationally but now offering access through PreCheck lines for domestic flights, has seen an unprecedented surge in membership. Unlike PreCheck, Global Entry does require a background check and a biometric identifier.

Airline crewmembers are another category finally being provided with expedited screening. TSA announced August 10th that it should have its Known Crewmember program in operation at 31 airports by Nov. 1st. And several weeks before that, it announced that cabin crews, in addition to cockpit crews, can now make use of the program.

Another obvious category, which I and others suggested shortly after 9/11, is people holding security clearances. TSA Administrator John Pistole surprised the attendees at the Aspen Security Forum in July by responding to a question on this subject, saying that TSA had quietly gone ahead and opened PreCheck to the 800,000 or so people who hold top secret clearances. “We haven’t advertised that,” Pistole was quoted by Wired as having said, adding that TSA had signed an agreement back in February with Director of National Intelligence James Clapper to include members of the intelligence community in PreCheck.

The one area of risk-based screening where TSA is behind schedule is uniformed military. Congress had imposed a 180-day deadline for TSA to allow military personnel in uniform, carrying military ID and signed orders, to have access to PreCheck lanes at all airports where the program exists. But as of July, this was in effect at only two such airports, Reagan National and Seattle-Tacoma. TSA reportedly won’t be set up to include the military at all 35 initial PreCheck airports until the end of 2013, according to Bloomberg Business Week.

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News Notes

Sacramento OK’d for Private Screening. The TSA has given Sacramento International Airport tentative approval to shift from TSA screening to screening from a TSA-selected private security company. The agency must now decide which company to assign to the airport and satisfy itself that the switch “will not compromise security or detrimentally affect the cost-efficiency or the effectiveness of the screening of passengers or property at the airport.” If final approval is received, probably not until next year, Sacramento will be the third-largest airport participating in the Screening Partnership Program (after San Francisco and Kansas City). Currently there are 16 airports in the program, with the most recent additions being Orlando Sanford and Glacier Park International.

Airport Screening Testimony Now Online. My testimony July 10th before the transportation security subcommittee of the House Homeland Security Committee (“Rethinking Airport Screening Policy”) has been posted on the Committee’s website. You can also download it from the Reason Foundation site, at http://reason.org/news/show/improving-airport-security-testimon. I urged the committee to reform the current Screening Partnership Program in the short term, and to devolve the screening responsibility to airports in the longer term, to eliminate the TSA’s dual role as both aviation security regulator and airport screening operator—a conflict of interest.

Portugal’s Airports on the Market. Fiscally stressed Portugal is offering both its national airline (TAP Portugal) and its airport operator, Aeroportos de Portugal (ANA) for sale. ANA owns and operates seven airports, including Lisbon and Porto, and has an estimated market value of $1.9 billion. Advising the government on these asset sales are Credit Suisse, Barclays, Citigroup, and Banco Espirito Santo.

BAA Selling Stansted Airport. U.K. airport operator BAA announced August 20th that it has given up appealing the Competition Commission’s mandate that it divest the second of its three London-area airports. BAA sold Gatwick Airport in 2009, and sold Edinburgh earlier this year. No timetable for the Stansted sale has been announced. Meanwhile, BAA’s parent company, Ferrovial, announced that it has sold a 10.6% stake to Qatar Holding for $750 million. The latter now owns 20% of BAA, thanks to acquisitions of small stakes from Britannia Airport Partners (5.6%) and GIC (3.8%). Qatar Holding will now have a seat on BAA’s board, alongside Ferrovial, Britannia, and GIC.

New Proposal for Airlines at Briscoe Airport. Only a month after the Gwinnett County Commission rejected a privatization proposal tied to bringing in scheduled airline service to County-owned Briscoe Field, regional airline ImagineAir announced plans to bring 10 to 15 jet departures per day to the airport within the next several years. The company currently operates charter service from Briscoe.

Powered Nosewheel Taxi System Heads Toward Certification. If all goes well for WheelTug, its electrically powered nosewheel taxiing system will be certified for airline use next year and the company can start filling orders to equip 737s and A320 aircraft with the system. The company completed taxi tests using a Germania 737NG at Prague Airport in June, and holds letters of intent to purchase the system from operators of both aircraft types. By eliminating the need to use the aircraft’s engines for taxi power, WheelTug says it will save operators $400-500 per flight. A competing system is being developed by Honeywell and Safran, which motorizes the main landing gear; certification of that system is planned for 2016.

Allegiant Brings Airline Service to Two More Secondary Airports. Continuing its business model of providing new airline service to secondary airports, Allegiant in August announced new service to two such airports: MidAmerica Airport in Illinois (across the river from St. Louis) and Rickenbacker Airport near Columbus, OH. In both cases, the new service will be several times a week to Orlando Sanford Airport.

ICAO’s New Report on Airport Privatization Now Online. If you are an airport director or owner exploring the privatization of your airport, it’s important to understand how such a change comports with international aviation law. An excellent overview is provided by the new ICAO report, “Manual on Privatization in the Provision of Airports and Air Navigation Service,” ICAO Document 9980. It updates and replaces an earlier publication, ICAO Circular 284, from 2002. The initial release is in English and versions in other languages (Arabic, French, Russian, and Spanish) are in the works. The report can be purchased from the ICAO online store: http://store1.icao.int/documentItemView.ch2?ID=10388

Expanded Air Transport Information Service. Contributor David Bentley’s Big Pond Aviation now offers an expanded, highly focused, client-driven air transport information and data service. For information contact either Mr. Bentley in the U.K. (db@bigpondaviation.com) or Martti Raito in Canada (mr@bigpondaviation.com)

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Quotable Quotes

“Anything that is done that creates a barrier between a customer and our industry is a bad thing. And clearly, 9/11 has created many barriers. People used to be able to go to an airport and talk to a pilot and feel the same thrill of aviation that the Wright brothers or Lindbergh or Neil Armstrong first felt—and now to see airports surrounded by security fences and sophisticated surveillance systems . . . and the assumption that there is some great act of violence about to take place –that is something I have been very worried about. I hope that in this second decade after 9/11, we can bring back some reason . . . but many people in the airport industry have signed on to a very rigorous security environment that may meet some theoretical concerns about what a terrorist might do – but on the other hand, I think it’s really becoming counterproductive and is discouraging passengers, customers, and pilots.”
—James Coyne, outgoing President, National Air Transportation Association, AviationPros.com, Aug. 29, 2012 (www.aviationpros.com/blog/10771369/life-after-nata-bizavs-recovery-and-2012-election-prospects)

USA Today has a good article on efforts to redesign airport security so that it is faster and less obtrusive. . . . Ironically, this [risk-based] solution is being driven not by TSA but by the airline industry and by travelers, many of whom have already signed up to provide more information in exchange for faster processing. . . . It’s been almost exactly ten years since a left-right coalition of privacy advocates forced TSA into a different, one-size-fits-all path, by claiming that TSA couldn’t be trusted with the age, gender, and travel plans of the people they were screening. Without data, TSA couldn’t do the differentiated screening that is at the heart of the new approach. We’ve suffered for a decade, victims of bad privacy policy. It’s nice to see the emerging consensus on a new approach.”
—Stewart Baker, “TSA Checkpoint of the Future,” June 20, 2012 (www.skatingonstilts.com/skating-on-stilts/2012/06/tsa-checkpoint-of-the-future.html)

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Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy


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