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Reason Foundation

Airport Policy and Security Newsletter #56

FAA reauthorization, body scanners and slots at LaGuardia and Reagan

Robert Poole
April 30, 2010

In this issue:

More than "Three Divisive Issues" in FAA Reauthorization Bill

Now that the Senate has finally passed its version of FAA reauthorization, the two measures must go through what is likely to be a very contentious conference committee process. Although a Congressional Quarterly story (March 24th) was headlined "FAA Bill Presents Three Key Debates for Conferees," all three of those were airline-related issues (alliance antitrust immunity, foreign repair stations, and the Fedex/UPS labor issue). But airports face two other major differences between the bills, both of which could have a real impact on their future.

The first is passenger facility charges (PFCs). Unlike the 7.5% federal tax on airline tickets (which provides funding for the Aviation Trust Fund, the source of FAA's air traffic control budget and of federal airport grants), the PFC is a local tax or charge. Congress lifted a long-standing prohibition (the "anti-head-tax" law) on airports doing this in 1990. The law since then has permitted every passenger airport, under FAA supervision, to impose a PFC of up to $4.50 per passenger, the proceeds of which can be used by that airport for various terminal upgrades and expansions. PFC revenue streams have been accepted by the financial community as bondable, making this device even more valuable to airports.

But since the cap on PFCs was increased from its original $3 to the current $4.50 in 2000, construction inflation has reduced its buying power significantly. The House bill would increase the cap to $7, while the Senate bill would leave it as is. Although most of my airline friends routinely complain about the potential of airports creating "Taj Mahals," nearly all PFC-funded projects have been much-needed expansions of terminals. My taxpayer-group allies are sometimes taken in by the mistaken idea that the PFC is a federal tax, and since they are against tax increases, they tend to oppose any PFC increase. My argument to them is that in contrast to federal airport grants, many of which are earmarked for poorly-justified projects (e.g., John Murtha Airport), PFCs are a form of local self-help, which conservatives should favor as a welcome devolution of responsibility from the feds to the locals. On this issue, I hope the House provision will prevail.

The other key airport issue on which the bills differ is the Airport Privatization Pilot Program. This issue is on the agenda, in one form or another, for about a dozen U.S. airports at this time. The global track record of airport privatization is positive, and well-qualified airport companies stand ready to use their talents and expertise to add value to U.S. airports via this approach. Numerous infrastructure investment funds are ready to finance airport privatization deals. Yet the House bill attempts to discourage this useful option by making the Pilot Program far less attractive. First, it would increase the airline approval margin from its current 65% to a more stringent 75%. More important, it would make privatized airports ineligible for federal Airport Improvement Program grants-even though their passengers would still be required to pay the ticket tax that provides AIP's funding. Fortunately, the Senate bill does not include this poison pill. On this issue, the Senate position should prevail.

New Problems for Body-Scanner Deployment


There are two alternative models for using whole-body imaging machines at airport screening checkpoints. One would be to use them instead of walk-through metal detectors, since the scanners can detect both metallic and non-metallic threats (such as liquids and non-metallic explosives) concealed beneath a person's clothing. This would mean using the body-scanners for primary screening-i.e., for all air travelers (except those exempted, such as cockpit crews, air marshals, and background-checked registered travelers). The alternative would be to keep primary screening as it is now, using body-scanners only for those judged to require secondary screening.

Unfortunately, what the TSA has adopted as its response to the underwear bomber is an incoherent mix of both. As revealed in a new report from the Government Accountability Office (GAO), the highly touted TSA plan to deploy 1,800 of the units by 2014 aims to deploy them as primary screening in 60% of the checkpoint lanes at just 132 of the 446 airports where TSA operates checkpoints. While those airports (designated as Categories X, I, and II) handle the majority of all passengers, what possible rationale can there be for equipping only some of their checkpoint lanes with body-scanners for primary screening? And by what logic are smaller airports left out-as if a terrorist could not easily figure out that getting into the system via a Cat. III or IV airport would work just as well? Either a complete replacement of metal detectors with body-scanners or equipping all 446 airports with enough scanners to handle all secondary screening would be a coherent plan. What TSA has selected is incoherent.

Unfortunately, although the report (GAO-10-484T, March 17, 2020) makes a number of criticisms of the plan, it missed this basic incoherence. GAO noted that the agency had not done a cost/benefit analysis prior to deciding on the plan; such an analysis might have led to the realization of its basic conceptual flaw. GAO also estimated that the additional staffing needed to operate the 1,800 new machines will add $2.4 billion to TSA's operating budget over the next eight years, a number TSA had not revealed. There is also no evidence of a careful comparison of the relative effectiveness of backscatter X-ray versus millimeter-wave body-scanners, with and without various masking technologies to protect privacy. (TSA is buying some of each.)

Airports have expressed legitimate concerns over possible additional waiting times in checkpoint lines. According to the GAO report, although the body-scanner can produce an image in as little as 5 seconds, it takes 20 seconds to produce and interpret the image. Thus, the per-passenger throughput time is about ten times the 2 seconds or so it takes to traverse the metal detector. In addition, because the scanners are bulkier than metal detectors, they will require more space at the checkpoint, in addition to requiring one or more "secure resolution rooms" located away from the checkpoint. Chip Barclay of the American Association of Airport Executives told Aviation Daily that "[I]t is evident that placing new equipment, building image viewing rooms, and accommodating teams of new personnel in already crammed checkpoint screening areas will be difficult if not impossible at some critical airports across the country."

This TSA plan should go back to the drawing board. The body-scanners already on order should be deployed initially for secondary screening only-and at all airports, not just the larger ones. The new TSA Administrator-whenever one finally gets selected and confirmed-should order a risk-based assessment of the entire screening program, including a serious registered traveler program. Only after that assessment is completed should a decision be reached on whether or not to replace metal detectors with body-scanners in primary screening.

Slot Snafu at LaGuardia and Reagan National


We celebrated the 30th anniversary of airline deregulation in 2008, yet two years later a battle has broken out over who can fly in and out of LaGuardia (LGA) and Reagan National (DCA) airports. At nearly all other airports, airlines are free to come and go as they please, needing only to make arrangements to lease gates and other facilities from the airport operator. But at DCA and the three New York metro area airports (LGA, JFK, and EWR), demand greatly exceeds what FAA has deemed the safe level of hourly operations for many hours of the day. Consequently, because no market-based solution has ever been adopted, the government sets the rules for who gets to use the available slots. Historically, the carriers in place at the time the original "high density rule-HDR" was adopted were grandfathered in, subject to a "use-it-or-lose-it" rule and a secondary market in which airlines (incumbent and new-entrant) can bid for any slots that become available due to an airline bankruptcy or downsizing or (should a miracle occur) additions to airport capacity.

Last winter Delta and US Airways proposed a slot swap, under which Delta would transfer 42 slot pairs (landing plus take-off) at National to US Airways (enabling the latter to strengthen its hub at DCA) and US Airways would transfer 140 slot pairs at LGA to Delta, allowing it to do likewise at LGA. The FAA, on behalf of the U.S. DOT (which has always set the rules for slot usage) tentatively approved the swap in early February-subject to each airline divesting a portion of each set of slots to airlines with limited presence at the two airports. The rationale was to protect consumers from a dominant carrier at LGA and DCA, where Delta and US Airways, respectively, would end up with more than 50% market share.

The two airlines first said they would scrap the deal rather than comply. Then Southwest announced it was very interested in acquiring slots at either or both airports. Delta and US Airways then said they would meet the FAA part-way by selling some slots to AirTran, JetBlue, Spirit, and WestJet-but not Southwest. When the Justice Department weighed in on FAA's side, Delta and US Airways shifted gears again. While not withdrawing their sale offers, they argued that the FAA condition was illegal, on two grounds: first, FAA cannot impose competition-related conditions on slot swaps; second, a forced sale would violate the takings clause of the Fifth Amendment, since they could not receive market value in a situation where the FAA would take back the slots of they refused to sell.

While I have no legal training, I've been reading debates over airport slots for about 30 years and it seems to me that the Delta and US Airways (now joined in this argument by Continental and United) have a weak case. First, the Justice Department has agreed with FAA's conditions, making the "FAA can't do this" argument essentially beside the point. And FAA's parent, the US DOT, has maintained from the start of the HDR (which predates airline deregulation) that slots are administrative creations of the DOT, not private property, even though usage-rights can be bought and sold. And in fact, during the past decade slots were legally wiped out at LGA by Congress, without any airline litigation demanding compensation for loss of property in those slots.

This whole silly mess could be avoided if a true market-allocation system were put in place for these capacity-constrained airports. Various slot-auction schemes have been proposed by economists over the years, aimed at countering "strategic" anti-competitive behavior by incumbent airlines. Alternatively, market-based runway charges would do the job (as described in some detail for the New York-area airports in the policy study I co-authored in 2007 (http://reason.org/news/show/congestion-pricing-for-the-new). As it stands, we are stuck with administrative decision-making, in which government will pick winners and losers. That's what we were supposed to be getting away from by enacting the Airline Deregulation Act of 1978.

Belly Cargo Deadline May Not Be Met, Despite TSA Claims

Congress has decreed that 100% of cargo transported in the bellies of passenger planes must by physically screened by August 2010. Because doing all of that at airports was judged physically impossible, the TSA created a Certified Cargo Shipping Program, to facilitate off-airport screening of much of that cargo, either by the originating shipper (if a large company) or by freight forwarders. To become a CCSP Facility (CCSF), a company or forwarder must comply with various inspection procedures and maintain a secure chain of custody for the inspected cargo until it's delivered to the airline that will carry it.

That sounds straightforward, but industry sources point out several problems. First, many small and medium-size firms don't seem to be paying attention as the deadline looms. If they wait until the last minute, their cargo may be refused until they can get certified as a CSSF, a process that could take weeks or months if there's a last-minute crush of applicants. The TSA's Marc Rossi told Air Transport World last week that "A lot of [shippers] have no idea this is going on or have been misinformed. The concern is that not enough people have a plan for this. . . . We have strong concerns that a lot of [shippers] have not modeled out what they're going to do on August 1. We forecast that one to three million pounds of cargo per day doesn't have a plan." American Airlines Cargo president David Brooks told Aviation Daily that in a worst-case scenario, "There will have to be a migration away from air cargo on passenger aircraft because the volumes will be too high for the airlines to screen. Some of that will go on freighter aircraft . . . . That will be an expensive option. Some will go by truck, which slower, some by rail and some by ocean."

Another problem is screening technology. To the best of my knowledge, there is still no TSA-approved machine that can screen large pallets of the kind that go in the bellies of wide-body passenger planes or containers with multiple commodity types. That would mean such pallets and containers having to be unpacked, and all the individual pieces screened by hand. The GAO reported earlier this month that "TSA has not yet completed assessments of the various technologies it plans to allow air carriers and [CCSP] participants to use in meeting the August 2010 screening mandate." TSA is planning to field-test these technologies in an operational environment-but if they fail the field tests, it's not clear what the agency will do then. TSA is also still planning laboratory tests of additional technologies that it hopes to add to its list of qualified products industry can use by August-without benefit of field testing. And as GAO has pointed out with respect to the TSA's failed "puffer" machines, putting technologies into operation prior to field testing is a risky way to operate. The same GAO-10-484T report also notes that TSA does not yet know how many inspectors it will need to hire and train to oversee all the CCSP facilities.

All of the above applies only to domestic belly cargo. The TSA has already said publicly that it will not meet the August deadline as applied to belly cargo that originates overseas. About 3 billion pounds per year of such cargo enters the United States, and no one yet knows what Congress is going to do about this problem. A House Homeland Security Committee staffer told ATWOnline that "I don't see that there's going to be a [formal] exemption granted. . . . We're more interested in seeing TSA continuing to work with foreign governments to find solutions for reaching 100% screening. We're prepared to expect a delay, but not a [permanent] exemption for inbound cargo." And he added that "We would at least like to know that the agency has a risk-based approach so that cargo coming from high-risk areas is screened."

Once again, Congress's legislate-first, analyze-later (or not at all) approach has produced a mess.

News Notes

Gary, Detroit City Talk Privatization

The city of Detroit is seeking bidders to manage and revitalize the former Detroit City Airport (now known as Coleman A. Young International Airport). Proposals from airport companies are due April 21st, and the city hopes to award a contract by July 1st. The city hopes to attract new airline service to the airport, which has lacked scheduled service for several years. The intent is to turn it into a secondary airport, like Midway in Chicago and Hobby in Houston. Gary, Indiana airport officials see privatization as a possibility for their airport, but are seeking to first complete a planned 1,900-ft. runway extension. Mayor Rudy Clay and Gov. Mitch Daniels have both said privatization should be an option for the airport. Meanwhile, officials in Gwinnett County, GA on March 2nd approved submitting a preliminary application to the FAA to privatize their Briscoe Field airport.

Robot for Engines-Off Taxiing

The March 2010 issue of Airport International reports operational testing of an unmanned tractor that would permit engines-off taxiing from the gate to the runway area. The towbar-less tractor (dubbed TaxiBot) attaches to the nose landing gear and is controlled by the pilot during the taxi-out phase. After disconnecting from the aircraft, it returns to the terminal under autonomous control, supervised from the control tower. TaxiBot is being developed by Israel Aerospace Industries in cooperation with Airbus. A principal aim is to reduce noise and fuel burn during taxi-out operations (but the plane's APU must be in operation to provide power for lighting, air conditioning, etc.)

Tunnel for Toronto Island Airport

The Toronto Port Authority has opted for a public-private partnership to design, build, finance, and operate a tunnel to connect the Billy Bishop Airport on Toronto Island with the mainland, a 121-meter (397 foot) distance that now requires a ferry trip. The C$45 million project will be carried out under a 20-year concession agreement, based on revenue from the airport's passenger facility fee (which is being increased from C$15 to C$20). With burgeoning service by Porter Airlines, passenger counts are expected to reach one million per year in 2010.

Jamaica Plans to Privatize Kingston Airport

Seven years after it successfully privatized Sangster International Airport in tourist destination Montego Bay, the government of Jamaica has decided to proceed with privatization of Norman Manley International Airport in the capitol city, Kingston. The government last month named a committee, chaired by a former Air Jamaica CEO, to develop the plans and timetable for privatizing the airport.

Flight Attendants Seek Combat Training

The Association of Flight Attendants is asking Congress to fund combat training for cabin crew, to improve aviation security. In addition to hand-to-hand combat training, the union's proposal includes portable communications devices to permit emergency communications with cockpit crew, and the ability to shut down in-flight Wi-Fi during security threats. Combat training is available now on a voluntary basis, but the union notes that those opting for it must do so on their own time.

ICAO Airport Economics Manual

An article in the February issue of Airport Magazine reminds readers that the International Civil Aviation Organization's Airport Economics Manual was revised in 2006, with significant input from airports in the United States and other countries. Among the changes were new material on alternative financial management techniques,  on airport privatization, and on economic regulatory oversight of airports. It is Doc. 9562, available on the ICAO website, www.icao.int.

U.K. Children Not Exempted from Body Scanners


The British government has reached the sensible decision that, despite the U.K. child pornography laws, it would undermine aviation security to exempt children from body-scanning where it is used for primary screening. We already know that terrorists have no compunctions about recruiting under-age suicide bombers, both male and female. Exempting such people from scanning would be like hanging up a sign inviting them to do more of this at airports.

Latest Aerobahn Version Warns of 3-Hour Delays

Version 5 of Sensis Corporation's Aerobahn airport surface management system, introduced during ATC Global in Amsterdam last month, includes an "event alerting option" that warns when individual flights have been on the tarmac for one hour, two hours, or longer. The idea is to warn airline dispatchers of flights that may exceed the DOT's three-hour limit, triggering fines of up to $27,500 per passenger.

Quotable Quotes

"The next time a prophet of doom warns of impending disaster, think how our behavior compares with that of other countries that have been attacked since 9/11. After the 7/7 attack on the London Underground, which killed 52 people, Londoners, recalling their pluck during the Blitz, gamely showed up en masse the next morning for their daily commutes. The Israelis make a point of rebuilding blown-up cafes in a matter of days after an attack; similarly, they return to targeted bus lines the day after a bombing. The message is clear: we're not going to let terrorists break our spirit. Had America rebuilt the Twin Towers in the first years after 9/11, they would be standing tall today as symbols of defiance. . . . Our politicians rail about apocalyptic threats while TSA officers pat down toddlers at the airport. The irony is that many potentially lethal terror attacks-from United Flight 93 to Richard Reid to the underwear bomber-have been foiled by regular citizens. The aim of terrorists is to make people feel powerless and afraid. Unfortunately, not every plot will be foiled. But if that's the standard we and our leaders set for ourselves, we are doomed to perpetuate dumb policies that flow from irrational fears: just what the terrorists want."

--Daniel Klaidman, "Terror Begins at Home," Newsweek, Feb. 22, 2010

"There were 615 million airline passengers in the U.S. last year. If each person arrived at the airport an hour earlier than they would have pre-9/11 to make it through security, as I did, that means 615 million man-hours were lost last year to 'enhanced' security measures alone. Let's look at how much that lost time costs. Gross domestic product per capita in the U.S. last year was $46,443. Divide that by the number of working days in a year, about 250, and the number of working hours in a day, say 8, and we get a GDP per individual work hour of a little over $23. Multiply that times those 615 million lost hours and you get $14.3 billion. Since air travelers as a group include more businesspeople with higher salaries than the general population, that number should be higher. All told, I estimate that the extra wait cost between $20 billion and $30 billion in 2009 alone, or nearly $250 billion over the last decade."

--Shaun Rein, "Airport Security: Bin Laden's Victory," Forbes.com, March 3, 2010

"Don't treat all passengers alike. Detecting bomb components will require the integration of several technologies. There are no technical panaceas. Screening all passengers identically means that nearly all passengers will be screened inadequately. Stringent screening can be used on only a fraction of passengers, so intelligence must help define who they will be. A registered-passenger program would allow frequent fliers and others who submit to background checks to be screened less rigorously, letting authorities focus resources elsewhere."

--Brian Michael Jenkins, Bruce Butterworth, and Cathal Flynn, "What We Can Learn from the Christmas Day Bombing Attempt," The Washington Post, March 26, 2010


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


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