In this issue:
- TSA security rationale in question
- O’Hare’s congestion-reducing runway revamp
- Expanding PreCheck prompts criticisms
- Fresh thinking on aviation issues
- Another try for a 2nd Atlanta airport
- Airport privatization news from Europe
- News Notes
- Quotable Quotes
TSA Documents Undercut Its Security Rationales
A couple of years ago Jonathan Corbett, a tech entrepreneur from Miami, posted videos online showing him successfully passing through TSA airport body scanners with a metal box concealed under his clothing, seeking to demonstrate that the scanners are an ineffective replacement for walk-through metal detectors for primary screening. In 2010 he filed a lawsuit contending that body-scanning and pat-downs are both unreasonable searches that violate the Fourth Amendment.
As part of the discovery process, TSA provided Corbett with 4,000 pages of documents, many of them classified. He was allowed to produce two versions of his brief, one containing extracts of classified material, and available only to the court, and a heavily redacted version which could be made public. But as several news sites reported last month, a clerk in the US Court of Appeals (11th District) mistakenly posted the classified version online, and it was quickly noticed and reproduced on various websites. Although the court issued a gag order prohibiting Corbett from talking about the classified material, there was no way to stop others from doing so.
Among the things we’ve learned from TSA Civil Aviation Threat Assessments that Corbett cited in his brief are the following:
- “As of mid-2011, terrorist threat groups present in the Homeland are not known to be actively plotting against civil aviation targets or airports; instead, their focus is on fund-raising, recruiting, and propagandizing.”
- No terrorist has attempted to bring explosives onto an aircraft via a U.S. airport in 35 years, and even worldwide, the use of explosives on aircraft is “extremely rare.”
- There have been no attempted domestic hijackings of any kind since 9/11.
- The government concedes that it would be difficult to repeat a 9/11-type attack due to strengthened cockpit doors and passengers’ willingness to challenge would-be hijackers.
Based on these points, Corbett argues that primary-screening searches via body-scanners or pat-downs are unreasonable under the Fourth Amendment. He agrees that although those searches have not turned up any would-be terrorists, they have detected illegal drugs. But that is irrelevant to aviation security, which is the only purported rationale for such intrusive searches without prior probable cause.
Corbett does not directly address whether the whole array of TSA airport screening measures may have deterred attacks that might have happened without those measures in place. But that is the kind of question that can be-and has been-assessed quantitatively by security experts such as Mark Stewart and John Mueller, whose work I have cited several times in previous issues of this newsletter. And those assessments suggest that body scanners and Federal Air Marshals, among other measures, cost vastly more than they are worth.
Whatever the outcome of Corbett’s suit-and I hope he prevails-Congress needs to take a hard look at the cost-effectiveness of much of what TSA is doing, in light of the revelations inadvertently made public by this case.
Latest Runway Will Reduce Delays at O’Hare
Apart from the three main New York City airports, Chicago O’Hare in recent decades has been among the largest sources of system-wide air traffic delays and congestion. During the first seven months of 2013, ORD ranked last in on-time departures (only 67%) among the 29 busiest U.S. airports. But a new runway that opened last month at ORD seems likely to offer significant delay reductions, not only at the airport itself but throughout the Northeast and Midwest.
The new east-west 10,800 ft. runway 10C/28C is the latest result of an $8 billion plan that is both reconfiguring ORD’s runways and adding significant capacity. The overall plan calls for replacing an old-fashioned set of intersecting runways with six parallel east-west runways and two crosswind ones. The six east-west parallels will permit more landings and take-offs per hour during low-visibility conditions in addition to more total capacity under all weather conditions. Specifically, the addition of 10C/28C will permit 26% more landings from the east during instrument conditions (from 84 per hour to 106). Since it is low-visibility conditions that have led to the worst delays, that improvement is huge. And during good visibility conditions, there should be a whopping 50% increase in takeoffs to the west (from 100 per hour to 150).
Those improvements are especially welcomed by smaller communities served by regional airlines as spokes feeding the American and United hubs at ORD. During bad weather, when airline dispatchers have to practice triage, it is typically the small jets and turboprops on such spoke routes that get delayed the most, so that larger planes carrying many more passengers to and from more distant cities can be expedited. “For a lot of these small communities, it’s going to be huge,” said airport consultant (and former head of Airports Council International-North America) Greg Principato.
The overall runway project has had to overcome an array of obstacles, including airline concerns over its cost and neighborhood opposition. To build the new 10C/28C, for example, required the replacement of a cemetery with 1,500 graves, plus relocating a railroad line, a waterway, two cargo facilities, and an aircraft fueling station. The cemetery issue alone took several years of litigation to resolve. I have not studied the details of how Chicago overcame these obstacles, but it’s likely there are lessons for other airports that need additional runway capacity.
Still to come, if funding can be worked out, are the final two parallel runways plus an additional control tower. One of those runways is already under construction, as is the control tower, which will be ORD’s third. That tower addition is unfortunate, in that the FAA is still operating on 20th-century principles that require controllers to have “out-the-window” views of all the runways they are in charge of. Yet the FAA and overseas air navigation service providers have demonstrated that tower functions can be provided safely and reliably from a remote tower location that is fed by various kinds of sensor data from distant runways. The first such remote towers will go into service in Norway and Sweden within a few months. I’m surprised that the major airlines that have questioned the cost of the overall ORD runway project did not raise this issue when the third tower was being approved.
Overall, though, the O’Hare runway modernization is good news for air travelers and the airlines that serve them.
Expanded PreCheck Raising Questions
In addition to the good news that Southwest is joining the PreCheck program this month, there have been alarms sounded by various privacy and civil liberties groups about the program’s expansion beyond airline frequent-flyer program members. These concerns were triggered by the Department of Homeland Security’s Sept. 10, 2013 Federal Register notice describing the changes. Comments were due 30 days later.
In brief, what DHS has proposed is a revision in how it will use the Secure Flight system, under which it took over from airlines (as of November 2010) the task of matching all air travelers’ name, gender, and date of birth with several watch lists of actual and suspected terrorists. That was a sensible move, which included standardizing the passenger name record information that airlines collect, to minimize false matches with names on the watch lists; it also kept watch-list information more secure. The change outlined in the Federal Register notice is that for all air travelers TSA will henceforth combine the Secure Flight data with airline frequent flyer information to sort air travelers, each time they fly, into three groups: those eligible for expedited (PreCheck-type) screening, those who will get regular screening, and those who need enhanced screening.
So far, so good, as far as I’m concerned, since that is the basic information and process needed in order to operate a risk-based approach to airport passenger screening. The notice goes on to explain that-again, in accordance with good risk-based design-an element of randomness will be included, such that those who would normally qualify for expedited screening will occasionally be assigned to standard screening or even enhanced screening. And it further goes on to note that TSA may use intelligence information to give greater scrutiny to a particular flight, which could increase the extent to which passengers on that flight receive non-expedited screening.
Some of the objections to expanded PreCheck are objections to the basic principle of risk-based screening. One silly objection, raised in a Washington Post op-ed by Christopher Elliott, is the odious nature of “a line for elite travelers who can afford to pay a fee.” This refers to the planned introduction by TSA of a five-year “membership” in PreCheck for $85. Anyone who cannot afford $17 a year for faster screening very likely cannot afford to be taking airline trips at all, or doesn’t mind spending time waiting in long lines. (And presumably also objects on principle to express toll lanes, Express Mail, first-class cars on Amtrak trains, and Starbucks as a pricey alternative to Dunkin Donuts.)
Somewhat more troubling are some of the points raised in an Oct. 21 New York Times news article by Susan Stellin. She reports interviewing an unnamed TSA official about what information will be used, and how:
- If an airline has a passenger’s passport number on file as part of the passenger name record, it is required to share that information with TSA, even for a domestic flight. My response: no big deal; this will further reduce false matches to watch lists.
- When you submit your fingerprints to DHS for the Global Entry program or for TSA’s forthcoming $85, five-year PreCheck membership, the FBI will check those fingerprints against its criminal history databases, including one on unsolved crimes. My response: that’s what a background check is supposed to do, and it’s what all airport employees with access to secure areas of airports must pass.
- There is also a TSA PreCheck disqualification list, containing names of people “accused of violating security regulations, including disputes with checkpoint or airline staff members.” My response: Here things start getting dicey, since it includes people “accused” as opposed to “convicted.” However, remember that this means only that the person will not be in the group getting expedited screening.
But with any such programs that will involve large numbers of people (and TSA is aiming to enroll 25% of daily air travelers in PreCheck by the end of next year), it is only fair to have a serious redress process, by which those excluded from expedited screening can find out if incorrect information was used, and if it was, get it corrected. DHS has such a process, but it’s not clear how well it works. This might be a worthwhile topic for review by the Government Accountability Office.
I cannot close without commenting on another concern raised in the Times article. Privacy critics are attacking expanded PreCheck by objecting to the fact that “secret computer rules, not humans, make these determinations.” But the very same people would also be objecting if “subjective human judgment” was being used for this purpose. What these people disagree with is risk-based security, per se-not how it is being implemented.
Fresh Thinking about Airports and Airlines
Some of the best ideas about aviation that I’ve encountered over the years have come from professionals who have recently retired. I’m talking about long-time airport directors, senior FAA officials, and heads of aviation trade associations. These people know the flaws and problems in aviation in great detail, but while in their official positions they were constrained from telling it like it is. Now out of office, they can speak truth to power.
A good example is a speech given October 21st at the DePaul International Aviation Law Institute by Greg Principato, who recently stepped down as head of Airports Council International-North America. As I read the text, in five or six places I marked “quotable quote” in the margin, and a brief summary here can’t do the speech justice. But let me give you a few highlights.
One of Greg’s key points is that US aviation policies are sadly out of step with those of other developed nations. That’s true of airport finance (relying on regulation-encrusted federal grants rather than a locally determined per-passenger charge as in most other countries), airport governance (where privatization and public-private partnerships are producing better airports in Europe, Latin America, and Australasia), air traffic control (where he staffed the 1993(!) Baliles Commission that called for a self-funded ATC corporation, which we still don’t have), and the misleading calls by the airline industry for relief from being “over-taxed like alcohol and tobacco.”
On the perennial battle between US airlines and US airports over passenger facility charges (PFCs), instead of just repeating old arguments, Greg makes a case that airline opposition to a larger role for PFC funding is irrational. In fact, he says, “airlines want airports to use the PFC on projects they support.” But in many cases, where existing PFC revenues have all been pledged to support revenue bonds for previous projects, the only alternative for the desired new project may be increased rates and charges for all airlines serving the airport. I really think the time has come for airlines and airports to bury the hatchet and reach consensus on increased PFC levels, especially given the likely shrinkage of federal AIP grants in coming years.
The speech has not been put online, as far as I know. But if you would like to read it, I will forward your request to Greg, who I’m sure will be glad to email it to you.
Another Try for a Second Atlanta Airport
Metro Atlanta is America’s largest metro area served by only one commercial airport. Affluent Gwinnett County, a northeastern suburb, last year attempted to privatize its general aviation airport under a plan proposed by New York-based Propeller Investments. But that plan was defeated by NIMBY opposition to the anticipated traffic and noise that scheduled airline service was expected to bring, despite many other residents welcoming an alternative to the long drive to Delta-dominated Hartsfield-Jackson International Airport.
But on October 4th, officials in Paulding County, a northwestern suburb, announced an agreement in principle with Propeller Investments to develop Paulding Northwest Atlanta Airport into a commercial-service airport to be called Silver Comet Field. Propeller said it is in talks with “several” commercial airlines about offering service to the airport with planes the size of Boeing 737s. The Paulding County Airport Authority is nearly finished developing a 23,000 sq. ft. passenger terminal and has begun work on extending the length of the runway. Propeller also has an option on 60 acres of land adjacent to the airport to be used for aviation-related business activity (while also serving as a noise-exposure buffer zone).
While Paulding County has only 142,000 residents, it is one of the country’s fastest-growing counties. The airport itself opened in 2008, as part of the county government’s commitment to economic development. The airport is just off US 278 with easy access to I-20 in the area the City of Atlanta had originally intended as the site of a second airport for the metro area. About one million people live within 25 miles of the airport, and 4.5 million live within 50 miles.
Rather than pursuing a privatization agreement under the federal Airport Privatization Pilot Program, Propeller has entered into two long-term lease agreements with the Airport Authority: one for the terminal building and the other an option to lease the adjacent 60 acres of land. The agreements give Paulding County the landing fees, taxes on aircraft based at the airport, a percentage of gross revenue, ground rental income from Propeller, and terminal sales tax revenue.
Delta, to no one’s surprise, is vigorously opposed to the plan, just as it was to the Gwinnett County plan. Delta CEO Richard Anderson said that he and Atlanta Mayor Kaeim Reed “will work together to oppose any investment in that facility.” The Paulding airport needs FAA approval to offer commercial service, as well as TSA screening for passengers and bags, a perimeter fence, and other security provisions. According to an article in the Atlanta Journal-Constitution, Delta’s Anderson “indicated that Delta would seek to block such funding requests for the Paulding airport.”
Assuming that the airport gains FAA and TSA approvals, which airlines might it attract? Since Southwest moved into Hartsfield-Jackson via its purchase of AirTran, the best prospects for Silver Comet would appear to be ultra-low-cost carriers such as Allegiant, Spirit, and the revamped Frontier, which is being acquired by Indigo Partners (which plans to turn it into an ultra-LCC). That outcome would offer metro Atlanta residents a very different air-service alternative to Hartsfield-Jackson.
Airport Privatization News from Europe
The information below (which is believed to be correct at the time of writing) and comment is by David J Bentley of Big Pond Aviation, Manchester, UK. djb@djbentley.fsbusiness.co.uk
Germany’s Hochtief AirPort looked as if it might be a name that would disappear after its main airport assets were acquired by a subsidiary of Canada’s Public Sector Pension Investment Board (PSP Investments) earlier this year. That is the case, but Hochtief still remains active in the sector. It changed its name to AviAlliance at the end of October. AviAlliance continues to hold shares in a wide range of airports in Europe, namely Athens, Budapest, Düsseldorf, Hamburg and Tirana (Albania). Athens Airport has ridden out the storm of the country’s sovereign debt crisis, and enduring tourism to Greece has seen a recovery of sorts. Düsseldorf, the main airport serving the industrial Rhineland area, has become Germany’s third-busiest airport, though still some way behind Frankfurt (which serves Germany’s financial center as well as being the centrally located hub) and Munich (which serves the richest region in Europe – Bavaria). German airports overall grew passenger traffic by 2.1% in September; not a bad figure when you take into account the lingering Euro zone recession and high airport taxes. All-in-all AviAlliance continues to be invested in a solid base of airports although it is no longer involved at Australia’s Sydney airport, since PSP Investments previously acquired that stake as a direct shareholding. None of this changes the status of Hochtief Airport Capital, a supporting fund comprising two Australian funds (Utilities Trust of Australia managed by Hastings and The Future Fund), along with Caisse de dépôt et placement du Québec (Canada) and KfW IPEX-Bank GmbH (Germany), the latter of which claims to be the world’s first investment partnership in the airport sector.
Heathrow Airport Holdings (BAA from 1985 until last year) has been off-loading airports since 2009, under pressure from the Competition Commission, starting with London Gatwick airport in that year, Edinburgh Airport in 2012 and London Stansted Airport in February of this year. At the same time Ferrovial, the principal shareholder in FGP Topco, HAH’s owner, has reduced its equity in HAH to just 25% as it readies itself for the (eventual) privatisation of AENA in its homeland, Spain. The latest investor is the UK’s Universities Superannuation Scheme, which took 8.65% of Ferrovial’s share of FGP Topco in October. This leaves Heathrow Airport (“the UK’s only hub airport” as Heathrow’s CEO Colin Matthews tells us tirelessly) being owned by a wide-ranging consortium of investors from pension, investment, and sovereign wealth funds from Europe, North America, the Middle East, and Asia.
The latest twist, and not a surprising one given the speculation since the conclusion of the Stansted sale, is that HAH has had talks with advisors with a view to seeking buyers for its three remaining non-London airports: Southampton (on the English south coast) as well as Glasgow and Aberdeen, both in Scotland. Of the three, Aberdeen looks the most tempting, being at the center of what remains of the British North Sea oil and gas industries (with potentially more reserves to be discovered) and of the nascent alternative energy (wind/wave) and carbon capture industries, and with airline yields to match. When these three airports go, HAH will have finally been broken up, as many will argue BAA should have been in the mid-1980s, though even free-market champion Prime Minister Margaret Thatcher could not have envisaged, when BAA was floated, that its de-listed successor might be owned by seven different entities from across the globe.
Owners have finally been found for Infratil’s ailing Glasgow Prestwick and Manston, Kent airports, which have been on the market for over a year at £10 million apiece. The Scottish government will take Prestwick Airport into government ownership, several private investors having reportedly expressed interest while declining to commit to a proposed timescale. Prestwick is the second airport to go that way recently, Cardiff Airport having gone through a reverse privatization to the Welsh government last year. Coincidentally, Manston Airport has been acquired for £1 by a well-known Scottish Entrepreneur, Ann Gloag, who was once involved with Stagecoach, the bus operator that owned Prestwick Airport before Omniport and then Infratil.
TSA Resumes Outsourced Screening Program. Late last month TSA issued a solicitation for approved airport screening companies to bid on four separate contracts to provide passenger and baggage screening at four Montana airports: Bert Mooney, Bozeman Yellowstone, Glacier Park, and Yellowstone Regional. This is the first solicitation since TSA was required by Congress in 2012 to resume taking applications and awarding screening contracts. Whether there will be bidders remains to be seen; the language in the solicitation says this procurement is a “100 percent small business set-aside.”
Manchester Developing an “Airport City”. Corporatized Manchester Airport, the UK’s third-largest airport, has announced an £800 million joint venture to develop adjacent real estate into an Airport City. The site offers 5 million square feet and has been designated by the government as an Enterprise Zone. Partnering with the airport are Beijing Construction Engineering Group, Carillion PLC, and the Greater Manchester Pension Fund.
Orlando Airport OKs $1 Billion Expansion. The Greater Orlando Aviation Authority has approved a plan to double the size of Orlando International (MCO), including a new baggage system, a people mover, and a second terminal. But the plan’s elements require the achievement of various levels of annual passengers before the projects begin. Eight of MCO’s airlines supported the plan, but Delta and Southwest opposed it.
CLEAR Integrates Operations with PreCheck. Last month front-of-the-line company CLEAR announced that it has made changes at its nine airports to escort members who are also in PreCheck to the separate PreCheck screening lane. Given that lines are beginning to occur at some PreCheck entry points as that program expands, there is more of a case for belonging to both programs. CLEAR is in place at DEN, DFW, HOU, HPN, IAH, MCO, SAT, SFO, and SJC.
Seven Mayors Endorse AA/US Merger. The mayors of Charlotte, Chicago, Dallas, Fort Worth, Miami-Dade County, Philadelphia, and Phoenix have sent a joint letter to Attorney General Eric Holder asking the Justice Department to “reconsider this ill-conceived lawsuit” against the merger of American and US Airways. Among other things, they point out that if the merger is forbidden, their hub airports will be at a disadvantage to Atlanta, Newark, and other hubs operated by carriers that have merged over the past decade.
Brown Field Project Gets a Green Light. The public-private partnership to convert San Diego’s Brown Field Municipal Airport from a GA-only airfield to a Metropolitan Airpark won approval from the city council last month. As I outlined in an article in the July issue, the airport’s 880 acres offer ample room for the proposed $900 million airpark development over the next 20 years. Phase 1 of the project includes a 117,000 sq. ft. FBO, 10 large-aircraft hangars, 45 small-plane hangars, and storage and support facilities, including a restaurant.
Gary Selects AFCO for PPP Deal. The Gary/Chicago Airport Authority selected Aviation Facilities Company (AFCO) as the preferred developer to revamp the money-losing airport. The next step is to negotiate a contract, which the Authority hopes will have AFCO committing to invest or attract $100 million into the airport. AFCO has developed and operated commercial facilities at a number of airports, including Los Angeles International and San Diego International.
Liquids Rules to be Eased in Europe Next Year. If all goes according to plan, as of January 2014 passengers will be able to purchase duty-free liquids in normal-size containers and transfer through a European airport without risk of the items being confiscated. Under new rules, such liquids must be sealed in tamper-proof bags and screened by specialized scanners. ACI-Europe’s Olivier Jankovec sees the move as an important first step toward a more passenger-friendly regime for carry-on liquids.
Guide to Collaborative Contingency Planning Released. The Airport Cooperative Research Program has released a guide to planning for better service to passengers during emergencies. ACRP Report 65 is Guidebook for Airport Irregular Operations Contingency Planning. Information is on the Transportation Research Board website at www.trb.org/Publications/Blurbs/166569.aspx.
“So what exactly do we need the TSA for? Why do we need the ridiculous ‘shoes off’ rules, why do we need to bother about liquids and gels, why must our laptops be out of our bags? . . . Well, now we know the truth. There are no terrorists for the BDOs and VIPRs to detect, and, indeed, the TSA would be the most surprised of us all if it ever found one. It doesn’t think they exist. We’ve spent hundreds of billions of dollars, and made our lives a misery, accepted potentially dangerous exposure to X-rays, and waved away our Fourth Amendment rights, all in the name of – what?”
–The Travel Insider, Weekly Roundup, October 25, 2013
“When the lingua franca of Europe was Latin, commentators remarked on just how complex Europe was to govern. Nothing has changed. However, today the lingua franca is [European] Commission bureaucratese. Of all the complex bits of European governance, one of the most complex and difficult to explain has to be the prohibition on State Aid. No other country or region has rules that prohibit State Aid. Indeed, most countries look at ways to hand out largesse. Every trade association has entire departments devoted to begging for State Aid or distributing it once it arrives. Europe, as we so often see, is different. Europe’s rules prohibit handing out State Aid if it distorts any market. Given that the point of State Aid is to distort markets, that just about covers the field.”
-Andrew Charlton, “State Aid and Airports: Pork Barrel Meets Sausage Machine,” Aviation Intelligence Reporter, October 2013
“At least someone is having a good time. In his regular column in the October 2013 edition of Management Today, Sir Howard Davies said, ‘It [the summer] wasn’t exactly a quiet time. I ploughed through 58 submissions to the Airports Commission, each with a different approach to capacity planning from islands on stilts in the Thames to spaceports and runways equipped with maglev take-off vehicles launching jumbos silently into the west London skies. I haven’t had so much futuristic fun since I gave up reading The Eagle.'”
-David Bentley, “UK Airport Capacity – Unravelling the Conundrum,” published by David Bentley
“We have an airport governance and ownership structure that was invented in 1928, when Calvin Coolidge was president. We have a Nixon-era structure for airport finance. The policy framework for airlines is more recent; it dates from Jimmy Carter’s time. And our never ending search for full modernization of air traffic control still lurches almost from year to year. Policies have been carved in ancient, and out of date, stone, as have mindsets. Meanwhile, our global competitors, many of which were afterthoughts or didn’t even exist when our policies and mindsets were formed, are leaving us in the dust.”
-Greg Principato, speech at DePaul University, Oct. 21, 2013