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Airport Policy and Security Newsletter #62

Fighting the last war on air cargo, detecting bombs in bodies, registered travelers vs. trusted travelers, and more

Robert Poole
November 1, 2010

In this issue:


Fighting the Last War on Air Cargo


The discovery of two apparent bombs being shipped on cargo planes seems likely to set off a whole new wave of fighting the last war-i.e. enacting costly, poorly-thought-out regulations based on the specifics of a new incident. Initial U.S. government reactions-sending two USAF F-15's to escort Emirates flight 201 from the UAE into JFK Airport last Friday and a ban effective Nov. 2 on passengers carrying printer toner cartridges in carry-on bags-look to me like pure security theater. And the ever-vigilant Rep. Ed Markey (D, MA), author of the 2007 law mandating that all belly cargo on passenger planes be physically screened, has announced he will push for new legislation to require 100% physical screening of all air cargo, period.

Before we go off half-cocked on yet more such regulations, it might be worthwhile to pause and ask several questions. First, assuming this latest incident was an Al Qaeda project, what might have been its real purpose? Initial AP and CNN reports on the device intercepted in the U.K. suggested that it was a toner cartridge with wires and a circuit board attached in a way that "made it resemble an improvised bomb." Later reports confirmed that both devices contained the explosive PETN inside printer toner cartridges. But their intended objective is obscure: to damage a passenger plane, to damage a cargo plane, or to damage the intended recipients in Chicago? Or something else?

What no one seems to have considered is that this stunt, including a convenient tip-off, may have been intended not to blow anything up but to panic politicians into enacting draconian regulations intended to cause large-scale economic damage to international goods-movement.

Physically screening all air cargo entering the United States and all domestic air cargo flown on freighters would be hugely costly and disruptive to our economy. One major problem is that the TSA cannot dictate inspection requirements at overseas airports from which numerous cargo flights originate. So a global program like the TSA's Certified Cargo Screening Program (for domestic belly cargo) is highly unlikely for incoming air cargo. But the alternative of physically inspecting all incoming cargo when it is unloaded at U.S. airports is nightmarishly complex and costly. Most of what comes in on cargo planes arrives on pallets or in shipping containers-and TSA has yet to certify any screening technology that can reliably inspect such large items. The alternative of unpacking them would require massive new on-airport facilities and would thoroughly gum-up air-cargo logistics, potentially wrecking the economics of time-sensitive air cargo. Accomplishing that could well be Al Qaeda's real objective.

But let's suppose this misguided effort were actually put into place over the next five years or so. How might Al Qaeda respond? Not by trying to send more bombs on cargo planes but in any number of other ways: assisting domestic terrorists to bomb sports venues, shopping malls, or any of millions of other targets; bringing in bad stuff in maritime containers (whose volume dwarfs air cargo) or by rail and truck from Canada and Mexico (proven channels used by smugglers of people and drugs).

It's high time we stopped playing this nasty and expensive game. The limited funds this country has for homeland security would be far better spent, first of all, on better intelligence on terrorist groups, interdiction of planned operations, and continued strikes against their leaders and infrastructure. In addition, we should cease pretending that any target-hardening strategy could ever be 100% effective and, instead, devote more of our security resources to beefing up resiliency and recovery capabilities.

Whither U.S. Airport Privatization?


Within two days of each other last month, the FAA filled the last open slot in its Airport Privatization Pilot Program, only to have one of its existing slot-holders drop out. Just after the agency accepted the preliminary application for the Hendry County Airglades Airport in Clewiston, Florida, the city of New Orleans announced that it was withdrawing its Louis Armstrong International Airport from the Pilot Program. The latter action has raised concerns about whether airport privatization will ever catch on in the United States.

The official announcement from the New Orleans Aviation Board says that "after analyzing the conditions required to effectively privatize public infrastructure and the current state of the capital markets," they concluded that "New Orleans is not well positioned at this point in time to solicit bids." Instead, they plan to focus on "recently announced initiatives to improve operations and become a more effective asset."

Those words come directly out of a brief assessment the Aviation Board commissioned from Boston Consulting Group. When those researchers interviewed me in September, they told me of the city's concerns that merely seeking the highest-bid for a long-term lease of the airport (a la Chicago's plan with Midway) would not lead to the kind of turn-around needed for Louis Armstrong International. I agreed, and suggested as a better approach that the city could start by issuing a Request for Strategies, laying out their desire to remake and reposition the airport and explaining that they were more interested in a partner that would invest in the airport, etc. That would weed out the asset-flippers and monetizers-assuming they got responses from more appropriate teams. If they did, they would then be better positioned to create a short-list of qualified teams and develop an appropriate RFP. I pointed to the turn-around situation of Jamaica's Montego Bay airport privatization, whose success persuaded that government to do likewise for Kingston. I also suggested they look into Puerto Rico's current efforts to revitalize the San Juan airport via the privatization program. I've only seen the Executive Summary of BCG's report, which lays out pros and cons in a reasonably fair way, but draws an abrupt conclusion that does not seem well-supported by the previous discussion.

Little detail has been provided about the Hendry County application, but one well-placed source at the recent ACI-NA conference told me that the game plan there goes far beyond sprucing up a general aviation reliever airport. If what I was told is correct, the plan is to develop an alternative port of entry for time-sensitive agricultural air-cargo from Latin America, that currently unloads at Miami International. Flowers and fruits are then trucked to destinations throughout Florida from the southern end of the state, through South Florida's traffic congestion. Clewiston is about 76 miles further north, on US 27 (but a long way from any Interstates). The airport has one runway, just under 6,000 ft. It will be interesting to see more details on this plan, as they emerge.

In connection with an Airport Cooperative Research Program project on US airport privatization, its study team conducted two focus groups at the ACI-NA conference in Pittsburgh, one for airport CEOs and the other with airport commissioners. The summary notes reveal considerable misunderstandings about airport privatization, as well as frustration about the many constraints under which U.S. airports must operate-from both the federal government and by being part of the local government structure. I'm looking forward to the report from this ACRP project, which I hope will better clarify lessons learned from the past several decades of global airport privatization and how they can be applied in the admittedly somewhat different environment in this country.

Detecting Bombs in Bodies

Public outrage over primary screening by means of body-scanners is growing-especially thanks to the TSA's new policy of aggressive pat-downs of those who opt out of body-scan screening. The new pat-down policy requires serious touching of breasts and genital areas, on grounds that those refusing the body scan could be concealing dangerous objects beneath a bra or underpants.

Yet the move toward widespread deployment of body scanners, both here and in Europe, was triggered by last December's "underwear bomber" with an explosive device hidden in his shorts. Serious security experts realized that as soon as underwear could be examined (either via body scanners or aggressive pat-downs), the logical next step for terrorists would be to do what drug smugglers have been doing for decades: concealing the bad object within a body cavity.

And there the thinking seemed to hit a brick wall. Everyone with knowledge of how millimeter-wave and back-scatter X-ray machines work knows that they can detect anomalies through cloth and about 1 mm of skin; they do not penetrate several centimeters of flesh to see what may be concealed within a body cavity. Yet the public seems to have been bamboozled into thinking that, as odious as the body-scanners are, at least they are protecting us against airborne suicide bombers.

Well, technology marches on, as I discovered reading the October 2010 issue of Airports International. "Bombs in Bodies" summarizes recent work by a company called Morpho Detection, Inc. on using quadrupole resonance (QR) to spot "abdominally concealed explosives." QR uses radio waves at frequencies that can excite the molecular structures of specific materials, causing them to resonate, producing a signal that can be detected. Since the device can be fine-tuned to look for very specific molecules, it should have a very low false-positive rate. (And that's a very important feature, considering the actions that need to be taken when the device does sound an alarm.) While Morpho does not yet have a product ready for TSA testing, the article includes an artist's concept of a device circling a traveler's mid-section, with an estimated unit cost in the tens of thousands of dollars and a first product "in approximately two years."

As I've said many times in this newsletter, if we had a truly risk-based airport screening approach, body scanners (and any new Bombs in Body scanner) would be used only in secondary screening, i.e., for those flagged as being higher-risk travelers. And in that application, a workable QR device would be appropriate for its purpose.
 
Airport Grants for Airport-Centric NextGen?

In a recent report on funding the NextGen air traffic control system, the Aerospace Industries Association suggested, among other things, that the long-standing federal Airport Improvement Program (AIP) be amended to permit airports to use some of these grant monies for "airport-centric" ATC improvements needed for the NextGen concept to work. These could include surface management systems such as ASDE-X and multilateration, equipment to facilitate performance-based navigation (PBN) approaches and departures, and safety enhancements such as runway status lights.

The Airports Council International-North America (ACI-NA) has shared with me its Briefing Paper and some commentary on these issues. In principle, ACI-NA supports increased flexibility to use AIP monies for airport-centric ATC projects (but not, it hastens to add, for aircraft-centric purposes such as equipping planes). The Briefing Paper points out some recent trends that don't fit well within the traditional AIP bricks-and-mortar model. A number of new airport NextGen capabilities will not require large capital expenditures but will entail ongoing operating and maintenance expenses, which are not currently AIP-eligible. And there is also a trend, as we've seen with the FAA's procurement of the ADS-B ground station network from ITT, to switch to a fee-for-service model, in which the vendor pays the capital costs and the operator (which in these cases would be the airport) makes annual service payments. Again, AIP only pays for capital expenditures. In addition, one of the many regulations in AIP forbids combining federal funding from several sources-such as the FAA's own Facilities & Equipment budget and its AIP grants.

Those problems could all be fixed by NextGen legislation aimed at equipping both airports and the FAA's Air Traffic Organization to cope with the new NextGen world. But when it comes to making such changes, ACI-NA turns cautious. Any expanded use of AIP must be accompanied by an increase in the amount of AIP funding, it says. That case is based on two premises: that AIP funding has trended downward, in real (inflation-adjusted terms), and that traditional airport capital needs exceed what is available from AIP. Let's take a look at both of those points.

In the 1980s, annual AIP appropriations ranged from about $400 million to $1.4 billion, in then-year dollars. During the 1990s, after a brief increase to nearly $1.9 billion (1992), the annual sums declined to below $1.4 billion (1997), finishing the decade at $1.8 billion. This decade has seen a large and sustained increase to the $3.4-3.5 billion per year range. These are not inflation-corrected figures, but no matter how you slice & dice those numbers, they show a long-term uptrend. (ACI-NA responds that during the three most recent fiscal years, the net amount available for AIP grants has decreased slightly, from $3.385 billion to $3.373 billion.)

The second point strikes me as true by definition and therefore beside the point. Nobody ever claimed that AIP would meet all airport capital expenditure needs for runways, taxiways, terminal buildings, etc. Airports pride themselves on a diverse set of funding sources for capital expenditures, including revenue bonds backed by airport fees and charges, bonds backed by passenger facility charge (PFC) revenues, and AIP grants. I appreciate that larger airports must, by law, give up some of their AIP monies in exchange for federal permission to levy PFCs, and that they are constrained by numerous AIP grant regulations. That's why I favor airport deregulation, commercialization, and privatization, to enable airports to operate as the businesses that they, in fact, are. And those businesses would serve their airline and other aviation customers better by investing in airport-centric NextGen capabilities.

Registered Traveler vs. Trusted Traveler

Last week I bit the bullet and signed up for Registered Traveler service with the new Clear, successor to the company now in bankruptcy. I had renewed for two years only a month or two before the old Clear abruptly ceased operations, and the new Alclear Holdings LLC has promised to honor old memberships for the full paid-up term. So even though the new Clear service has thus far signed up only Denver and Orlando, it was a no-brainer to sign up and finally get something for my two-year renewal payment.

Fiercely competing with Alclear is startup company iQueue, which has already begun RT operations at Indianapolis. Since the TSA is still unwilling to do "security threat assessment" background checks on Registered Traveler members, iQueue has dispensed with the biometric feature on its members' ID cards. That, says Fred Fisher of iQueue, gives it a lower-cost business model and an easier sign-up process, since applicants don't have to have their retina scanned or fingerprints taken. Alclear counters that it is building a biometric security business with applications beyond the airport terminal, such as cruise ships, office buildings, etc. CEO Caryn Seidman-Becker told Aviation Daily that the biometrics "could allow us to work with government entities, but that's a longer-term vision."

The new Clear is charging $179 a year, which is a lot just for front-of-the-line privileges. (iQueue is offering an introductory price of $119, regular price $169.) When I renewed with the old Clear, there were indications that the TSA might be forced by Congress to implement a real Trusted Traveler program, with security threat assessments enabling those who were cleared to bypass at least some of the time-consuming security theater at the checkpoint. But the legislation, the first-ever TSA reauthorization, never went anywhere in the Senate, after passing the House. I hope fixing this will be one of the priorities of the new Congress in 2011.

Those concerned that it is too risky to allow pre-cleared travelers to bypass some aspects of security should consider the two existing Trusted Traveler programs operated by Customs & Border Protection: Global Entry and Nexus. The former allows frequent international travelers who pass a background check and submit their fingerprints to bypass the immigration booth (and its long lines) upon returning by air from overseas. As of early October, nearly 77,000 members were being served by 122 kiosks at 20 U.S. gateway airports. Reciprocal privileges exist for Americans and citizens of Germany, the Netherlands, and the U.K., which have very similar programs. Nexus has over 450,000 members who frequently cross the U.S.-Canada border. Both are still officially federal pilot programs, but CBP is working on a final rulemaking to provide permanent, official status for Trusted Traveler programs by early next year.

Making Airports Work Better

How many times has your flight arrived at an airport, only to find no gate is available? Or have you ever been caught in one of those times when the wind shifts, and air traffic control changes the direction of take-offs and landings, meaning dozens of planes have to taxi from a long queue at one end of the airport to a long queue at the other end? I have, and it's not pleasant!

These problems are solvable (or at least significantly reducible) thanks to better airport surveillance and information technology. The leader in this field appears to be Sensis Corporation, whose Aerobahn system has been providing these kinds of benefits at JFK and a growing number of other airports in this country, Europe, and Australia. What Aerobahn and competing systems make possible is airport collaborative decision-making (A-CDM), in which the airport operator, tower controllers, airline ramp controllers, and others get real-time information about what's going on: where planes are (both in the sky near the airport and on the ground), where ground vehicles are, how long a specific plane has been on the taxiway (at risk of exceeding the new three-hour delay limit), which planes are about to exceed their time since de-icing, and many others. The software system fuses data from an array of multilateration sensors on the ground that use transponder signals to triangulate the aircraft position and identity, airline information with details specific to that flight, ramp controller information, etc.

At last month's Air Traffic Association annual conference, I saw a real-time display of Aerobahn at work at Atlanta's Hartsfield-Jackson International Airport. Atlanta appears to have (at the moment) the most advanced version of Aerobahn, which includes a feature called Dynamic Rules Alerting. Airline customers can develop customized rules to alert them to specific situations needing action (such as possibly exceeding the Tarmac Delay Rule), and can specify the type of alert(s) they wish to receive for that kind of situation. During the conference Sensis announced the newest feature: a Predictive Engine that uses an adaptive learning technique to predict future situations up to two hours in advance. Hence, an airline operations manager can be alerted that a particular situation seems highly likely to develop within N minutes affecting specific flights and gates.

This is very cool technology-and I'm not easily impressed. I would be remiss not to mention some of Sensis's competitors in A-CDM, which include Metron's recently announced Harmony for Airlines, the U.K.'s NATS with its own A-CDM system recently selected by London Gatwick airport, and Era's multilateration system being used by German ATC provider DFS for A-CDM at Hamburg and Munich.

 Upcoming Conferences

Note: I don't have space to list all aviation conferences here; below are those at which I or a Reason colleague will be speaking.

Airport Consultants Council 32nd Annual Conference, Nov. 8-10, Ponte Vedra Beach, FL, Sawgrass Marriott Resort. Details at: www.acconline.org/content/navigationmenu/ACCevents/annualconference
(Shirley Ybarra speaking)
 
Infrastructure Investor: Chicago, Nov. 18-19, Chicago, IL, Gleacher Center. Details at: www.peimedia.com/infrachicago10. (Shirley Ybarra speaking)

News Notes


ASDE-X Operational at 32 Airports

The advanced runway incursion detection and alerting system known as ASDE-X is now operational at 32 of the 35 airports targeted by the FAA, with the other three expected to be operational by June 2011. ASDE-X combines surface movement radar, multilateration, and ADS-B surveillance. The information generated by the system gives controllers very accurate real-time position and I.D. information of aircraft and surface vehicles. When combined with runway status lights (which are beginning to be deployed to 23 airports), the system will give warnings directly to flight crews in the cockpit, as has been recommended by the National Transportation Safety Board. ASDE-X has been developed by Sensis Corporation.

BAA Will Challenge Court Divestiture Ruling

The U.K. Court of Appeal rejected airport owner/operator BAA's appeal that the Competition Commission's directive requiring BAA to sell several of its airports was biased (due to a conflict of interest on the part of one of its members). BAA plans to appeal to the U.K.'s Supreme Court. The Commission directive requires BAA to divest two of its three London airports (Gatwick and Stansted) and one of its two Scottish airports (either Edinburgh or Glasgow). BAA has already sold Gatwick, but has balked at any further divestitures.

A Wayport in Australia?

During the 1990s, various parties promulgated the idea of "wayports"-- free-standing transfer hub airports, to be located in remote locations with low-cost land and uncongested skies. Critics lambasted the idea as impractical, since such an airport would lack the financial base of a strong local origin-and-destination market, and none of the proposed U.S. wayports got off the ground. But the idea has re-surfaced in Australia, with a plan to develop Darwin International Airport into a long-haul and domestic transfer hub. Aviation Daily (Oct. 13, 2010) reports that the airports's major shareholder, the Australian Infrastructure Fund, has completed negotiations with the Qantas Group to provide expanded service at Darwin by Qantas and Jetstar, with the latter announcing new service between Darwin and Manila plus expanded service to Bali, Sydney, Melbourne, and Adelaide.

Scrap Cargo Scanning Laws, Says Advisory Body
COAC-the Commercial Operations Advisory Committee (to Customs and Border Protection)-has concluded that laws mandating 100% scanning of air cargo and ocean cargo should be repealed. The group announced this finding in July, as a recommendation to the Department of Homeland Security's policy branch, which is drafting a new national strategy for supply chain security. The alternative proposed by COAC is "risk-based measures that target high-risk shipments." ("COAC Seeks to Scrap Cargo-Scanning Laws," Journal of Commerce, July 26, 2010)

More U.K. Airport Privatizations?

With the new Conservative/Liberal Democrat coalition government cutting financial aid to municipalities, some U.K. city governments are reconsidering their ownership stakes in their airports. Unlike the national government's privatization of the BAA London airports, in which 100% of the shares were sold via an initial public offering, most U.K. cities subsequently only sold partial ownership stakes. Newcastle's airport is still 51% owned by the county government, and the Birmingham city government retains a 19% stake in that airport. Reuters reported in late September that officials in both locations have received inquiries from overseas investors and may consider such sales.

Links for Previous Articles
In Issue No 60 (September 2010), I referred to recent articles on airport privatization by LeighFisher Management Consultants and HNTB. I had only hard copies, but a reader found both of them online, so I am pleased to share the links:
www.leighfisher.com/pdfs/publications/FocusPrivatizationAnAlternativeforAddressingTodaysChallenges.pdf
www.hntb.com/sites/default/files/issues/AI-7-2010T.pdf

Quotable Quotes


"[T]he DOT has decided to crow once again about how few long ground delays there were with 'only a slight increase in the rate of canceled flights.' Really? I would think a 20% increase in canceled flights would be a little more than 'slight,' don't you? That's right. Forgetting about the DOT's rounding to a single decimal point, the cancellation rate rose from 1.18 to 1.43 percent, an increase of more than 20 percent. Had the same cancellation rate from last year held for this July, there would have been 1,442 fewer flights canceled this year. If you assume 100 people on each flight, that's nearly 150,000 people impacted. Small increase, huh?"
--"DOT Continues to Claim Tarmac Delay Victory Despite 20 Percent Rise in Cancellations," The Cranky Flier, Sept. 14, 2010 (http://crankyflier.com)

"I see my job, and really TSA's job, as one of really managing risk. So my goal is to ensure that we provide the best possible security for the traveling public, but doing it in a way that provides greater scrutiny to those that need greater scrutiny, and so we don't use a cookie cutter approach for everybody. Right now we use somewhat of a blunt instrument to screen virtually everybody the same way. And my goal is to use intelligence in a more informed fashion so we can apply greater scrutiny to those who need it and keep up with throughput in that fashion."
--TSA Administrator John Pistole, in Kelly Yamanouchi, "New TSA Chief Wants 'More Informed' Screening," Atlanta Journal-Constitution, Oct. 19, 2010 (www.ajc.com/business/new-tsa-chief-wants-685851.html)
 
"While correctly pointing out that [airline] scheduling decisions which ignore considerations of available capacity are bad for the system, the [FAA] Administrator left open what the measures should be to 'de-peak'-that is, to spread their arrivals and departures more evenly throughout the day and possibly consolidate several departures into fewer frequencies flown by larger aircraft. . . . As he surely knows, however, simply relying on airlines' good will or USDOT and FAA jawboning to encourage the airlines to responsibly schedule, in what are hypercompetitive and valuable markets, is unrealistic and is guaranteed to fail. . . . [The recent amendment of] the USDOT Policy Regarding Rates and Charges to permit the greater use of congestion- and peak-period pricing recently survived a legal challenge, and, if implemented, will help provide marginal benefits. Policymakers should build on this incremental change to introduce new airport-based pricing options."
--Steve Van Beek, "Designing an Effective Aviation Congestion Strategy," EnoBrief, August 2010 (www.enotrans.com)


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


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