In this issue:
- Fresh thinking on passenger facility charges
- Congressional outrage, but only modest security changes
- Diverse approaches to employee screening
- New players offer hope for smaller airports
- Ontario gets its airport back
- News Notes
- Quotable Quotes
The perennial battle between airlines and airports over how to pay for large-scale capital improvements drags on as the current FAA authorization nears expiration on September 30th. Basically, airlines (represented by A4A) argue that an increase in airports’ locally determined passenger facility charges (PFCs) will increase the already high cost of tickets and thereby depress demand for flights. Airports (represented by ACI-NA and AAAE, working together as Airports United) argue that using PFC revenues to support revenue bonds is a great example of local self-help, and that funding those capital costs without increasing airline landing fee and space rental revenue will keep airports’ reported cost per enplaned passenger (CPE) low and competitive. (Since PFCs are collected by the airline and passed on to the airport, they are not counted as part of the airlines’ CPE at the airport in question.)
Each side accuses the other of cherry-picking numbers and examples. For example the widely touted A4A numbers showing how over-taxed airlines are have been critiqued by the Business Travel Coalition. A4A’s “typical” trip is from Peoria to Raleigh/Durham via Chicago O’Hare, at a base round-trip airfare of $237. Adding the various ticket taxes and PFCs leads to a total of $63, which is 26% of the base fare. BTC argues that the example was carefully selected to maximize fees and taxes, and carries an untypically low fare. Just shifting to DOT’s average domestic round-trip fare of $391 would reduce the same fees and taxes to 16%. And many other itineraries would not incur as many fees and taxes.
On the other hand, A4A argues that no airport has put forth a convincing case that a lack of a higher PFC level is impeding any significant capital expansion project. So I asked ACI-NA if they had examples. They shared with me a March 2015 presentation showing 30 airports, of all sizes, that have planned capital projects but whose current $4.50 PFC revenue stream is committed for a number of years (and hence unavailable as debt service for any new projects). Of these airports, 11 are constrained only between now and 2020, but nine more are constrained until between 2021 and 2025, another five can’t PFC-finance new projects until 2026-2030, and five more are constrained until somewhere between 2031 and 2038. Some of these projects are modest, but others are big deals-such as new gates at JFK, a $4.4 billion capacity increase plan at SFO, and a $10 billion, 35-gate expansion plan at SEA.
The Seattle plan is interesting because that airport’s airlines generally support a PFC increase, since its existing PFC revenue is committed through 2028. Airport director Mark Reis told a congressional hearing in May that a PFC increase to $8.50 would finance $3 billion of the capital plan-money that would otherwise have to come from airline rates and charges. That could push the airport’s CPE to a troubling $35 by 2030. He told the committee members at the hearing that “[I] the past few weeks, five separate airlines have appeared in front of the Port of Seattle Commission to plead that the Port allocate our limited PFCs to the project that would reduce the rates and charges of the individual airlines.”
The issue that is seldom discussed openly in this ongoing airline/airport battle is that of who controls decisions on projects that expand capacity. In the old pre-deregulation days, when airports were still something of an infant industry, they were so desperate for anchor tenants to provide a dedicated stream of airline revenue (to support revenue bonds) that they signed long-term lease agreements giving those anchor tenants veto power over major expansion projects (called “majority-in-interest” clauses). In the nearly 40 years since airlines were deregulated, airports have learned that they can attract new airlines and that they can generate previously unheard-of amounts of revenue from retail, parking, and car-rental businesses. Over the years, therefore, anti-competitive provisions such as MII clauses, residual-cost lease agreements, and exclusive-use gates have become less and less common. Airports have become enterprises, whether operated as city-owned departments, airport authorities, corporatized entities (in Europe and Asia) or as investor-owned companies (Europe, Australia, and elsewhere).
In private conversations, my airline friends admit that the real issue in the PFC battle is over control. They apparently still have a higher comfort level with the remnants of the old veto power provisions that apply to projects funded out of airline rates and charges than they do with the process for choosing projects to be funded or financed via PFCs. They talk vaguely about the need for a larger airline role in that process, but without specifics. If we are going to have a serious conversation about greater use of PFCs, airlines should explain what they want changed in that decision process, instead of continuing to make questionable arguments about higher charges hurting demand for air travel.
At a June hearing in response to the widely reported failure of TSA checkpoint screening to detect 67 out of 70 attempts to sneak dangerous items through screening, House Homeland Security Committee Chairman Michael McCaul (R, TX) said that Congress needs to “drastically overhaul” airport security. Appearing on Fox’s America’s Newsroom the same day, McCaul said, “We need to revamp . . . the TSA process,” adding that “We need to look at whether private screeners are better than public screeners. I think they can be more efficient, more effective.”
At a Senate Homeland Security Committee hearing the same day, DHS Inspector General John Roth (whose investigators had repeatedly fooled TSA screeners) noted that his testers “don’t have any special background or training in this area,” denying concerns that they might have used classified knowledge about how to foil the body-scanning machines. And Roth added, “We remain deeply concerned about [TSA’s] ability to conduct its core mission.”
The way TSA operates the PreCheck trusted traveler program also came in for criticism at the Senate hearing. Rebecca Roering, a TSA administrator at Minneapolis-St. Paul Airport complained that “TSA is handing out PreCheck [privileges] like Halloween candy in an effort to expedite passengers as quickly as possible.” She understood and supported the original trusted traveler concept, Roering made clear. What she was objecting to was TSA’s policy of “Managed Inclusion,” under which non-vetted passengers in the regular screening lanes are “vetted” on the spot by TSA behavior detection officers and moved into the PreCheck lane.
The chairman of the Senate Homeland Security Committee, Sen. Ron Johnson (R, WI) characterized most of what TSA does at checkpoints as “security theater.” He added that to deal with the terrorist threat, “We’ve got to think outside the box. We’ve got to think smarter.”
That was early June; it’s now early September. After all that rhetoric, what has changed? The new TSA Administrator, Peter Neffenger, who took office in July, told the New York Times on July 28th that the agency would be cutting back on Managed Inclusion, while ramping up efforts to sign up more vetted travelers into PreCheck, adding “I’m a big fan of a fully vetted population.” To reinforce that stated intention, McCaul’s House committee in June approved a bipartisan bill that would restrict PreCheck to pre-vetted passengers. The bill, HR 2127, was written by Rep. Bennie Thompson (D, MS) and cosponsored by Reps. John Katko (R, NY) and Kathleen Rice (D, NY). It was introduced in the Senate prior to the August recess, but has thus far not passed either house. Meanwhile, as of August 31st, actual PreCheck enrollment reached a new high of 1.5 million.
The larger question, not really addressed by Chairman McCaul in June, is not whether private screeners are “better” or “worse” than public-sector screeners. Rather, it’s the conflict of interest created by the TSA self-regulating the screening process. Imagine that the failures discovered by the Inspector General’s testers had been at airports where screening is carried out by TSA-selected private screening companies. It’s quite likely that their contracts would have been terminated, sending a message to all other current and potential contractors about the necessity of meeting high performance standards.
As I discussed in the June issue of this newsletter, there was a whole series of GAO and Inspector General reports warning that screening equipment was unreliable and that failures were likely occurring. Yet the self-regulated TSA machine kept plodding along, assuring everyone that things were just fine, nothing to see here, move along folks.
Self-regulation is terrible policy. Congress created this problem, in its overly hasty creation of the TSA in the panic following the 9/11 attacks. Only Congress can fix it, by getting TSA out of the screening business and revamping the agency as a purely security policy and regulatory agency, like its counterparts in other civilized countries.
Back in April an official working group of aviation experts completed a 90-day review of airport employee screening policy, at the request of the Transportation Security Administration. It concluded that mandated physical screening of all airport employees with access to secure areas would not be cost-effective, but made 28 recommendations in five categories: enhanced random screening, improved background checks (including real-time access to criminal records), better auditing of employee credentials, enhanced risk-based metrics, and increased employee awareness of security concerns.
At a hearing of the House Homeland Security Committee’s transportation security subcommittee in May, task force member Jeanne Olivier of the Port Authority of New York & New Jersey reported the group’s conclusion that “100% physical screening would not completely eliminate potential risks and could divert limited resources from other critical security functions.” That’s a plausible conclusion based on the assumed $15 billion annual cost for 100% employee screening. But that figure-from TSA-assumed that the agency itself would provide the screening. As I reported in February, the two major airports already doing such screening using security contractors have much lower costs-$3.1 million per year at Miami and $3.5 million a year at Orlando. Atlanta’s just-begun program, also using a security contractor, is budgeted at $5.5 million. Extrapolating to all air-carrier airports, I estimated national costs of just $135 million, a tiny fraction of TSA’s estimated $15 billion.
Atlanta Hartsfield-Jackson has constructed a new three-lane employee screening checkpoint on the mezzanine level of the main terminal, with metal detectors, X-rays, and explosive trace detection equipment. It will be staffed by existing security contractor HSS, Inc. The Atlanta Journal-Constitution reported, without comment, that Delta will not use the checkpoint, but will continue to do spot checks of employees at shuttle lots, “and plans more extensive screening in the future.” That’s especially odd since it was Delta employees at both Atlanta and Orlando who were involved in the security breaches that triggered both airports’ decision to go to employee physical screening.
Two other major airports are the first ones to be testing continuous (real-time) criminal history background checks: Boston Logan and Dallas/Ft. Worth. They are enrolled in a new FBI program called Rap Back. The FBI system uses the fingerprints provided in the required pre-employment background check to continually monitor those individuals for felony arrests, convictions, or “other improper activities.” Should such an indicator come to FBI attention, it will alert the airport, with the decision on taking action being up to the airport (and presumably its TSA security director).
Consolidation of the major airlines has led to increased enplanements at most large hub airports and the majority of those categorized by FAA as medium hubs. But small hubs, on average, have suffered from reductions in scheduled service, leading to reduced enplanements and concerns about negative impacts on both business and personal travel. Two medium hubs-Memphis and T.F. Green in Rhode Island-suffered big enough declines in enplanements to be recategorized as small hubs based on their 2014 enplanements.
Despite the consolidation of legacy carriers into four mega-carriers, there is still open entry into commercial aviation. That open entry offers hope for small hubs to replace service cutbacks by the legacies.
One large positive factor is the rapid growth of ultra-low-cost-carriers (ULCCs) Allegiant, Frontier, and Spirit. Two of the fastest-growing small hubs this year are St. Petersburg/Clearwater and Orlando Sanford, whose daily departures in July were up by 94% and 71%, respectively, according to data from masFlight reported by the Wall Street Journal (July 23rd). Allegiant is a key factor in the growth of both. This year the airline is adding service to Kansas City and San Antonio, and will open a new operations base at Pittsburgh late this year. That airport is still recovering from the former U.S. Airways shutting down what was once a major hub operation. Allegiant continues to link small airports to larger ones, with service points including Akron-Canton, OH; Appleton, WI; Belleville, IL; Grand Island, NE; Grand Rapids, MI; Montrose, CO; Punta Gorda, FL; and Scranton, PA. It serves 34 destinations from Williams Gateway Airport in Mesa, AZ.
Frontier is several years into its conversion from a business-oriented niche carrier into an ULCC, largely emulating the model established by Spirit over the past decade. The transition has alienated many former business flyers, but with the openings created by the legacy carriers’ cuts in service to smaller airports, there would appear to be great prospects for this new incarnation of Frontier.
One benefit from this kind of competition is fare reductions. CheapFlights.com in July released its latest Airport Affordability Report, noting the remarkable turnaround of former Delta hub Cincinnati-Northern Kentucky Airport (CVG) and current Delta mega-hub Atlanta. Both now show up as among the most affordable in the country, after being ranked near the bottom only a year ago. In both cases, the cause is increased entry by ULCCs-in these cases, Frontier and Spirit. As Time‘s Brad Tuttle put it, “The bottom line is pretty simple: more competition translates into lower prices for travelers.”
CVG is taking steps to keep itself more competitive in the future. In June it reached agreement with its airlines on a new lease deal, replacing the 40-year agreement that had given veto power to Delta over expanded facilities. The new agreement will run for just five years and is no longer based on airlines paying only the “residual” costs of operating the airport. Instead, the airlines get predictable rates for the next five years, and the airport can retain any operating surplus to either build reserves, pay down debt, or directly fund capital improvements. This is a far more businesslike way to run an airport.
Even more interesting as a disruptive force seeking to fill the gaps in small-airport service, but for business travelers, is an array of start-up companies offering semi-scheduled service in turboprops or small jets. At least five such companies are now in business, inspired by the success of Surf Air in California, about which I have written previously. Here is a quick snapshot.
- Beacon, begun by Surf Air founder Wade Eyerly, this month begins daily roundtrip flights between Westchester County Airport, NY and Boston’s Logan Airport, using King Air 200 turboprops and operating out of general-aviation terminals at both airports. The planes will be operated by Dynamic Aviation, a Part 135 operator. All passengers must be members who pay $1,000 to join, plus $2,000 a month for unlimited flights.
- Rise, based in Dallas, offers a similar service using King Air 350s linking Dallas with Austin, Houston, and Midland. Its all-you-can-fly service costs members $1,650 per month.
- OneJet, based in Boston, is using Hawker 400 jets for service, thus far, between Indianapolis and Memphis, Milwaukee, Nashville, and Pittsburgh-all airports that have lost significant legacy airline service. It recently signed up Memphis-based Fedex as a customer. Like the others, OneJet is not the operator of the aircraft; that is being done under contract by Pentastar Aviation Charter. OneJet’s advisors include several MIT professors, former DOT Sectetary Ray LaHood, and former Virgin America CEO Fred Reid.
- SetJet offers on-demand service among Los Angeles, Orange County, San Diego, Scottsdale, and Las Vegas, as well as up to two daily flights between Los Angeles and New York (White Plains and Teterboro). It is using CRJ 900 regional jets, with 25-seat VIP interiors. Like the others, its flight operations are being provided by certificated Part 135 charter companies.
- JetSmarter offers two types of service: JetDeals for last-minute flights and JetShuttles for frequent flights between key cities. Among the first of the latter are twice weekly trips between Fort Lauderdale and New York. Like the others, it contracts with charter operators to provide the actual flight operations.
Time will tell how successful these start-ups will be. But they are another illustration of the benefits of our still open-entry air travel market, despite large-scale legacy airline consolidation.
After five years of legal wrangling, the City of Los Angeles and the City of Ontario have agreed to a deal in which Ontario will buy back its airport from Los Angeles. Ontario will pay $190 million over the next 10 years, while taking over $60 million in airport debt. All 182 current airport employees will be guaranteed a job, either at ONT or at a comparable job with Los Angeles World Airports (LAWA), the agency that has been managing ONT in addition to LAX and Van Nuys. The deal will take about a year to finalize, mostly because of the FAA review needed before the airport’s operating certificate can be transferred.
Ontario officials believe that under the control of their new five-member airport authority, they can cut costs to make the airport more competitive in attracting airline service. But that will be a bigger challenge than they seem to realize. Like many other smaller, regional airports, ONT has lost considerable service since 2007. Here’s a brief comparison:
|Number of airlines||11||8|
|Number of destinations||33||13|
Airport authority board members argue that the airport’s cost per enplaned passenger (CPE) is too high, at about $12 in 2014. They attribute this to LAWA’s administrative costs, and think they can reduce it via streamlined management. But bond rating agency Fitch Ratings points out that Burbank Airport, another regional airport in the area, has a CPE of just $2.37, but served only 3.9 million passengers last year, a huge decline from the 5.9 million it served in 2007. Fitch has questioned the prospect for significant growth at ONT, noting that what has happened at ONT and BUR is typical of smaller, regional airports nationwide over the past decade, as larger airlines merged and focused more of their service on their own hubs.
Others have noted ONT’s general image as an airport served by low-cost carriers with Southwest as by far its largest airline. Brian Sumers of Aviation Week pointed out last month that ONT has service by only one ultra-low-cost carrier-Mexico’s Volaris, operating only one route. Carriers that specialize in economy passengers-Allegiant, Frontier (in its recent makeover), and Spirit are conspicuous by their absence. They would be logical targets for the airport board, and the new airport director they plan to hire, to go after aggressively.
Longer term, political constraints are likely to constrain LAX’s growth, which is bullish for BUR, LGB, ONT, and SNA-the region’s other four airports. And I’m pleased to see that by taking this action, LAWA has given up any pretension of eventually becoming the monopoly provider of airport services in the huge Los Angeles urbanized area. Airport competition may be modest there today, but assuming the region continues to grow, having regional airports that compete for business is far better than having a shared monopoly, as exists in Chicago and greater New York-or the airport monopoly that Delta manages to enforce on Atlanta.
New LaGuardia Terminals Will Cost $8 Billion. When the Port Authority of New York & New Jersey announced the winning team to finance, build, operate, and maintain a new central terminal B at LGA on May 28th, everyone was waiting for the other shoe to drop. In the midst of the procurement process, Gov. Andrew Cuomo suddenly announced a design competition to revamp both LGA and JFK, potentially conflicting with the central terminal concession. Fortunately, by the time Cuomo dropped the other shoe on July 27th, announcing the winning design concept for LGA, the two projects had been made compatible. The new plan to revamp the airport will replace not just the central terminal but also Delta’s nearby terminals C and D. All three existing terminals will be demolished after their replacements are built in what is now the parking area in front of the terminals. The Skanska team for Terminal B agreed to the revised design, which boosted its cost to $4 billion, and Delta has apparently agreed to finance another $4 billion for the replacement of Terminals C and D. New parking structures will be built first, to clear the space needed to build the replacement terminals.
London City Airport For Sale. Global Infrastructure Partners is putting on the market its 75% ownership stake in London City Airport. The centrally located short/medium-haul airport has exhibited strong growth, reaching 3.65 million passengers in 2014. One announced bidder is a joint venture of Canadian pension-fund investor Borealis teamed with German insurer Allianz. Other reported bidders include the Ontario Teachers’ Pension Plan teamed with Kuwait’s sovereign wealth fund and Hermes Investment Management, as well as Macquarie Group from Australia. The airport has selected Credit Suisse to advise it on the sale, which could value the airport at about $3 billion.
Greek Airport Privatization Still on, Government Says. With a possible change in government in the near future, the on-again/off-again 40-year concession won by Fraport last year to upgrade, operate, and manage 14 regional airports was re-affirmed by Economy Minister George Stathakis in late August. But several days earlier, Aviation Daily reported that Fraport said it had not yet signed the formal documents and that further talks are needed to iron out details. Assuming the deal survives another change of government following the snap election called for late September, it is unlikely to take effect until early 2016.
Turning TSA Fees into General Taxes. The U.S. Travel Association has lambasted House Republicans for one of the numerous “pay-for” provisions included in its recent $8 billion short-term bailout of the Highway Trust Fund (HTF). That total includes shifting $3 billion in passenger TSA fee revenue-always previously used to cover a portion of the cost of TSA screening-into the federal general fund. This measure is a two-fold assault on the users-pay/users-benefit principle. The bailout of the HTF with general-fund money is due solely to Congress’s unwillingness to cut back the size of the now $50 billion/year program to match the $40 billion in annual highway user tax revenues. And taking the user-fee money away from TSA also undercuts that program’s users-pay basis. Alas, the Senate went along with this short-term bailout prior to adjourning for its August recess.
Buses Competing with Northeast Corridor Shuttles. DePaul University transportation researcher Joseph Schwieterman criticized the DOT’s recently announced investigation of “price gouging” in the air shuttle market in the days following an Amtrak crash that interrupted passenger rail service in the corridor. In an op-ed in the Wall Street Journal (Aug. 19th), he noted that travelers are not held captive to air shuttle service, given the rapid growth in recent years of intercity bus lines in the corridor. “On average a scheduled bus now leaves from New York for Washington every 10 minutes throughout the day. Fares are usually about $30, around 80% below those of airlines and about half those of trains.” And although some airlines did charge higher-than-normal fares (“surge pricing”), “far fewer travelers than before the bus-travel renaissance were willing to buy them.”
Spanish Ghost Airport Sold for 10,000 Euros. Ciudad Real Airport, built by the government at a cost of 1 billion euros just prior to the Great Recession, but without attracting any scheduled air service, got only a single bidder at a recent auction. That bidder was a Chinese-led consortium called Tzaneen International. Its initial outlay covers the airport land, including the runway long enough for an Airbus A-380 and most buildings, except for the passenger terminal. Tzaneen apparently plans to convert the airport into a cargo hub. The town of Ciudad Real has a population of only 75,000, which likely explains why no airline was willing to offer passenger service there.
Berlin’s New Airport Now Planned to Open in 2017. The debacle that is Berlin Brandenburg Airport continues to amaze. Originally intended as a public-private partnership in which cost overruns and schedule completion risks would have been shifted to investors, the project was changed, due to political objections, to a conventional government procurement. When construction finally started in 2006, it was supposed to be open for traffic by October 2011, enabling Air Berlin and other airlines to move from overcrowded Tegel Airport to the spacious new airport. But construction difficulties delayed that to May 2012, and then to several later dates, prior to this latest change to the second half of 2017. The cost has escalated from an initial 2 billion euros to an estimated 5.4 billion euros.
Mexico’s Trusted Traveler Program. After a brief vacation in Mexico this summer, I received an email from the Department of Homeland Security noting the existence of a relatively new trusted traveler program analogous to DHS’s Global Entry (which greatly eased my return). It’s called Programa Viajero Confiable, and as of June was in operation at Mexico City, San Jose del Cabo, and Cancun, with near-term expansion to 10 additional airports. It is open to U.S. members of Global Entry as well as Mexican air travelers. Information is available at http://www.viajeroconfiable.inm.gob.mx/index.php/home/.
Aecon Sells Quito Airport Concession. Canadian construction firm Aecon Group has sold its 45% stake in a 30-year concession for the New Quito International Airport that it built along with concession partners CCR (Brazil), Airport Development Corp. (Canada) and HAS Development Corp. (Houston). After it opened in 2013, the airport won a World Travel Award as the “Leading Airport in South America.” Aecon’s sold its stake in concession company Corporacion Quiport to Grupo Odinsa and CCR for $232.6 million.
Vietnam Announces Mega Airport. The government of Vietnam has unveiled plans for what will ultimately be an $18 billion airport near Ho Chi Minh city, to replace congested Tan Son Nhat International Airport. To be called Long Thanh International, it will be built in stages on a greenfield site about 25 miles from the city. The initial stage, costing $7.8 billion, is aimed for completion in 2023, capable of handling 17 million annual passengers. If all three phases are built, capacity will be 100 million passengers a year.
Pedestrian Tunnel Opens at Billy Bishop Airport in Toronto. Passengers using island-based Billy Bishop Airport no longer have to wait for a ferry to take them the short distance from downtown Toronto. An $82.5 million pedestrian tunnel opened at the end of July. The 850-foot tunnel is 100 feet below Lake Ontario and is served, on the island side, by one of the longest escalator systems in Canada.
Third Runway Approved for Munich Airport. Germany’s second largest airport has won approval to add a third runway, after a federal appeals court rejected the last appeal against the runway’s construction. But the airport’s owners-the German federal government, the state of Bavaria, and the city of Munich-are “in disagreement over the expansion,” according to Reuters. Munich residents voted to oppose the runway addition in 2012. The environmental group that lost its appeal has urged the government owners to reject the runway plan.
French Government OKs Airport Sales. Economic growth legislation dubbed the Macron law was enacted by the French parliament in July, paving the way for privatization of the Lyon and Nice airports, in a process to get under way this fall. Currently, the national government owns 60% of each, with the respective local chamber of commerce owning 25% and the local government 15%. It is the federal government’s majority interest in each that will be offered to investors. Lyon is estimated to have a market value of $845 million, while the larger Nice Airport is estimated to be worth $1.8 billion.
High Speed Rail Authority Eyes Burbank Airport Land. The California High Speed Rail Authority last month announced its interest in purchasing a 60-acre parcel that the airport has other plans for. The Airport Authority already has plans under way to sell the B6 parcel to private developers, using the proceeds to build a long-planned replacement of its quaint but obsolete terminal. The terminal also violates FAA safety standards, being too close to a nearby runway centerline. The Rail Authority wants the parcel to build its proposed San Fernando Valley station on the line it is seeking to build between Los Angeles and San Francisco.
Philippine Airport Bidders Submit Qualifications. In response to the government’s Request for Qualifications, six groups have submitted their track records as airport developer/operators. The project involves the development and operation of five new regional airports, estimated to cost $2.3 billion. Two 30-year concessions will be offered, one for three airports and another for the other two. Proposals will be due in January.
“I think the reality [of slow growth in U.S. airport privatization] just doesn’t matter. The U.S. market is huge, and people want to be in it. The limitation is not that airport operator investors won’t be willing to commit themselves to it; the limitation is the inability of U.S. public entities to do deals.”
-John Schmidt, Partner, Mayer Bown, quoted in Kalliope Gourntis, “Flawed, but Still Attractive,” Infrastructure Investor, April 2015
“I believe the Federal Air Marshal program is one of the least effective and most expensive security programs in the Transportation Security Administration. They provide very little additional security at an enormous cost. They remain another good example of a knee-jerk reaction to our security issues out of 9/11.”
-Gordon Bethune, former CEO, Continental Airlines, email to Robert Poole summarizing his June 11th comments on NBC News