Airport Policy and Security Newsletter

Airport Policy and Security Newsletter #18

Topics include: backsliding on Registered Traveler; getting serious about risk-based policy; protecting airport perimeters; fixing baggage screening; and notes & quotes.

In this issue:


Progress and Stumbling Blocks on Registered Traveler

An air of confusion surrounds the emerging Registered Traveler program, under which private firms are being approved by the Transportation Security Administration to offer express-lane service (for a fee) at passenger screening checkpoints. Recent media reports have included conflicting and sometimes misleading information, to the point where some previous supporters of the program have expressed reservations. But there’s also a lot of good news.

To begin with the good news, the pioneer company in the field, Verified Identity Pass (VIP), keeps making new strides. It has just signed up a fifth airport – Toronto Pearson International – in addition to Orlando (where it’s been in operation since last July), and Indianapolis, Sacramento, and San Jose, where it has been selected as the RT provider. Some 70 airports have expressed strong interest in the RT program by joining a consortium set up by the American Association of Airport Executives to ensure full inter-operability among RT programs (so that if you sign up with one company, you will have access to the RT express lanes at all airports that join the program). Two other companies have begun marketing their own RT programs to airports: Saflink and Unisys. And Verified has attracted two heavyweight partners, Lockheed Martin and General Electric.

We are also beginning to get operating data from Verified’s two express lanes at Orlando. Although constituting just 6.5% of the security lanes, they are handling as much as 10% of the traffic during morning peak hours. (This is similar to what is observed on California’s HOT lanes—priced lanes that give commuters the opportunity to bypass congested freeway lanes for a price.) Orlando data show that the maximum wait time for VIP’s “Clear” card holders is 3 minutes, compared with a maximum of 31 minutes for those using the regular security lanes. Over 17,000 people have signed up with VIP at Orlando thus far.

So with all this progress, what is the bad news? Well, both Aviation Week and the Wall Street Journal have reported opposition to RT within the airline industry in recent months. Some have expressed concern that RT will increase airport costs that airlines end up paying, due to the need to add equipment and new security lanes. Others have objected to the “revenue-generating” direction the RT program has taken (apparently on the premise that only airlines should be making money from air travelers). While the latter concern is simply foolish, the former deserves attention – because it’s not correct.

Or at least it’s not the policy of market leader VIP. In response to such concerns, the company issued a statement on March 6th outlining five guiding principles for its Clear RT program. Heading the list is this: “Clear will not cost airports or airlines money. All program costs will be borne by Clear.” That sounded good to me, until I saw in a WSJ article the statement that TSA expected RT companies to even pay the salaries of TSA screeners staffing added security lanes. That seemed bizarre to me, since a properly functioning RT program, by reducing the lines in regular lanes and speeding the flow through RT lanes, should end up reducing the need for screeners. So I talked with VIP founder and CEO Stephen Brill. He explained that in certain transition scenarios, there may be a need to add a lane and screeners before an RT operation has reached the critical mass at an airport to fully justify separate lanes. In those cases, he said, VIP is quite prepared to pay any added TSA staffing costs, for as long as extra screeners are needed.

The other concern I’ve heard from some airport and airline people is that unless TSA exempts RT members from rinky-dink measures like removing their shoes and laptops, not enough people will join to make the program worthwhile. Hence, while taking up space and costing money, it will likely be a flop. Brill had answers for that one, too. TSA has said that if RT companies can introduce technology that improves the screening process, it will be willing to relent on things like shoe removal for RT members. Without giving away any details, he said the new relationship with GE is designed to add such technologies to VIP’s Clear program.

So as the TSA’s June 20 target date for national roll-out of Registered Traveler approaches, I’m optimistic that we’ll see many more airports signing up, and TSA approving some creative new technologies that will allow many of us to say goodbye to the humiliating and time-consuming “air-strip” TSA now forces us to endure each time we fly.

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Getting Serious About Risk-Based Policy

In a hard-hitting op-ed piece in the Wall Street Journal last month (2-14-06), Homeland Security Secretary Michael Chertoff set forth some hard truths about dealing rationally with the hydra-headed terrorist threat.

“In short, we drive homeland-security investments by looking to facts and analysis, not politics. We acknowledge, however, that while most people support risk management in theory, enthusiasm tends to diminish once it is applied in practice. This is because risk management, by its very nature, involves a trade-off. In a free and open society, we simply cannot protect every person against every risk at every moment in every place. There is no perfect security. If we tried to obtain total security the cost would be exorbitant – in financial terms and in lost freedom and prosperity. Balancing risk necessarily means applying resources against the highest risks — and not against all risk.”

I thought of these words as I read Don Phillips’s International Herald Tribune column on the second annual meeting of the Railway Security Forum and Expo. The keynote speaker was Tim O’Toole, managing director of the London Underground, who discussed lessons learned from last summer’s terrorist attack on that system. He urged his listeners to avoid wasting money on security systems that do little or no good. Terrorism, overall, is an “infinitesimal risk” to rail systems, he told attendees. Instead of pouring money into technology, “Invest in people and count on them.” In other words, focus on resiliency in dealing with attacks, rather than futile attempts at target-hardening.

Thus far, Chertoff and DHS have resisted politicians’ efforts to pour billions of dollars into transit security systems. And Chertoff seems to be prevailing in changing the funding formula for the $800 million Urban Area Security Initiative. Instead of being doled out to all 50 cities that received such funding last year, this year’s grants will be more explicitly based on relative risk of terrorist attacks. In his WSJ article, Chertoff claimed that the entire $1.4 billion that DHS will provide this year for states, urban areas, ports, and mass-transit operations will be based on risk.

But standing in the way of applying this approach consistently across all modes is the Aviation & Transportation Security Act of 2001. Hastily enacted by Congress two months after the 9/11 attacks, this law mandates that every single piece of checked luggage be inspected for explosives and that a vast array of federal screeners harass air travelers at more than 400 passenger airports – regardless of risk and regardless of cost. And if we’re not careful, we may soon have similar analysis-free congressional mandates to equip all airliners with missile defense systems and to require 100% inspection of all air cargo.

Sooner or later Chertoff is going to have to go back to Congress and ask for relief from analysis-free aviation security mandates. Either that or stop claiming that homeland security decisions across the board are being made on the basis of “clearly defined, data-intensive assessment of where the risks are greatest in our country.”

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Protecting Airport Perimeters, Cost-Effectively

For several years I’ve been harping on the relative lack of attention being given to poorly protected airport boundaries. Since the threat of bombs covertly placed on airliners is now much larger than the threat of a 9/11-type hijacking, it dismays me to see over $2 billion a year being spent to keep sharp objects out of passenger cabins while very little is being done to keep bad people from sneaking onto the airfield to cause harm to planes on the tarmac.

That’s why last issue I spotlighted Vancouver International Airport’s move to install a several-million dollar millimeter-wave radar system that could easily be upgraded into a perimeter protection system. And I’m also heartened by the recent decision of the Houston Airport System to be the first in the United States to install a high-tech perimeter security system. The Honeywell system, announced in January, combines ground radar with a system of video cameras and an intelligent-video processing system. Data feeds from all three will be routed to a combined user interface terminal, so as to alert operators to any suspicious object or activity around the perimeters of George Bush International (IAH) and Hobby Airport (HOU). A $3.5 million DHS grant is covering the cost of this system.

And then there was last week’s announcement by the Port Authority of New York and New Jersey. It will soon begin work on a new Perimeter Intrusion Detection System at Kennedy, LaGuardia, Newark, and Teterboro airports. The system will combine radar, infrared imaging, motion detectors, and surveillance cameras. Produced by Raytheon, it is based on systems already in use in Baghdad and Israel.

But then I saw the price tag: $140 million. Well, OK, it is to cover the perimeters of four airports, not two, as in Houston. But $140 million is 40 times as much as the $3.5 million that Houston Airport System is spending. And George Bush International is known for its huge land area, with a 30-mile perimeter (so large that it is also patrolled by rangers on horseback). The Port Authority did not make available figures for the perimeters of its four airports, but my rough calculation is that the total is about 26 miles. So the bottom line is that the Port Authority is paying 40 times as much for a system to monitor fewer total miles of airport perimeter than the Houston airports.

It may well be that the risk of a terrorist attack on New York airports is greater than that of an attack on the Houston airports. But the New York contract has all the earmarks of elaborate high-tech bells and whistles (Gee that’s neat-let’s do it, because we can.), rather than a businesslike approach to getting the most bang for the buck. Let’s hope it does not become the model for perimeter protection.

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Fix Baggage Screening, Please

There are many reasons why the checked-baggage screening system needs a major overhaul. Aside from the question of whether it really makes sense to require 100% of all bags to be inspected for explosives (as opposed, say, to only the bags of relatively riskier travelers), the current system is very slow and hugely more expensive than need be. And it also creates targets for terrorists (the clusters of people congregating in ticket lobbies waiting to turn their bags over to TSA baggage screeners).

Last month the head of the Metropolitan Washington (DC) Airports Authority, James Bennett, testified that the current (lobby-based) bag screening system at Dulles International and Reagan national “is not capable of meeting the current demand, is operationally inefficient . . . and is incapable of meeting future demand.” Systems like this, in which bags are loaded manually into giant EDS machines, one at a time, typically screen about 180 bags per hour per machine. The handful of US airports that have integrated their EDS machines into conveyor-fed “in-line” systems can process up to 425 bags per hour per machine. And much faster systems are being installed in Europe, such as Manchester Airport’s new 1,500 bags/hour high-speed in-line system.

Another problem with manually fed EDS machines is worker injury. USA Today in January reported the results of a study that found TSA had the highest worker injury rate of any federal agency. Last year 29% of all screeners were injured on the job-down from 36% the year before, but still vastly higher than the average of 4.25% for all federal workers. Baggage screeners are five times more likely to suffer on-the-job injury than coal miners, and seven times more likely than textile mill workers. Those screener injuries cost taxpayers $52 million in FY2005. And that’s certainly a factor, as well, in TSA’s high screener turnover rate of 20%.

In the Intelligence Reform and Terrorism Prevention Act of 2004, Congress ordered TSA to explore how to get better baggage screening technology into airports, requiring a report back to Congress by this month, March 2006. TSA only set up a Baggage Screening Investment Study Working Group in January, and tasked it with coming up with a national explosives detection system deployment strategy, including a funding approach.

This is unbelievably frustrating. A full 12 months ago the Government Accountability Office published a detailed study on the cost-effectiveness of shifting large and medium-size airports from manual to in-line EDS systems, providing data that showed that at most such airports the labor savings would pay for the costs of the in-line systems in one or two years. To any business in America, a one-year payback period on new capital equipment would be a no-brainer. Of course you would make the investment! But not, apparently, at TSA, which has one budget for operations (the payroll of all those 45,000 airport screeners) and an entirely separate one for equipment.

Using the GAO’s numbers and assembling data on how many airports it would make sense to shift to in-line systems, last summer I crunched the numbers to estimate how much the annual dollar savings in personnel costs would be, if all airports in size categories X, I, and II shifted to in-line systems, category III shifted to EDS plus electronic trace detection, and the smallest 190 airports remained as they are. By my calculations, this would reduce the TSA baggage-screener work force by over 16,000 people. Making a few conservative assumptions (not all airports would do quite as well, etc.), my revised figure of eliminating 14,394 positions would still save $720 million per year. (The full report is available at www.reason.org/ps340.pdf.)

Since TSA seems incapable of making capital vs. labor trade-offs, I suggested an alternative approach in which other people would have strong incentives to do so: devolve the screening responsibility to airports, giving them the same money TSA now spends on screening (capital plus labor) and letting them use the savings on other airport security functions. I’m pleased to see that the report has started getting covered in the aviation trade press (e.g. Air Safety Week, Feb. 27, 2006). Let’s hope TSA’s new working group takes a look, too.

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Notes and Quotes

What Cargo Security? I almost fell off my chair when I read the first page of Aviation Daily‘s Feb. 27th issue. The last item on the page was about Alaska Airlines working with employees and law enforcement on the problem of . . . gang graffiti in cargo holds. “Graffiti in aircraft cargo holds isn’t new. It’s been around for years and is an industry-wide problem,” the airline was reported as telling its staff. Let’s see if I’ve got this straight. TSA spends $2.5 billion per year to keep sharp objects out of passenger cabins, but people with gang affiliations are inside cargo holds putting graffiti on the walls? And this is a known, industry-wide problem?

One Small Airport Opts Out. I’m glad to see that at least one little airport has decided to take advantage of the TSA’s Screening Partnership Program, under which all airports may replace TSA screeners with those of a TSA-certified private company. The Sioux Falls, SD airport has been assigned a contract with Covenant Aviation Security/Lockheed Martin to operate passenger and baggage screening through 2010. The company is one of 34 that have been certified by TSA – the vast majority of which have no contracts, because of the overly centralized way in which TSA handles the program, making it generally unattractive to airports.

Coordinating Transportation Security. Another modest step in the direction of more rational risk allocation across transportation modes has been taken by the TSA. In January TSA Administrator Kip Hawley announced the creation of a new Transportation Sector Network Management unit that will review security policies across all modes. The unit will interface with trade associations and transportation customer organizations.

Opinion Journal Columnist on Secondary Screening. “I am almost always picked for extra screening. I must be on a list of middle-aged Irish-American women terrorists. I know a message is being sent: We don’t do ethnic profiling in America. But that is not, I suspect, the message anyone receives. The message people receive is: This is all nonsense. What they think is: This is all kabuki. We’re being harassed and delayed so politicians can feel good. The security people themselves seem to know it’s nonsense: they’re always bored and distracted as they go through my clothing, my stockings, my computer, my earrings. They don’t treat me like a terror possibility; they treat me like a sad hunk of meat.” -Peggy Noonan, WSJ Opinion Journal/Best of the Web, Feb. 23, 2006

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Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation. Poole, an MIT-trained engineer, has advised the Ronald Reagan, the George H.W. Bush, the Clinton, and the George W. Bush administrations.

Surface Transportation

In the field of surface transportation, Poole has advised the Federal Highway Administration, the Federal Transit Administration, the White House Office of Policy Development, National Economic Council, Government Accountability Office, and state DOTs in numerous states.

Poole's 1988 policy paper proposing privately financed toll lanes to relieve congestion directly inspired California's landmark private tollway law (AB 680), which authorized four pilot toll projects including the successful 91 Express Lanes in Orange County. More than 20 other states and the federal government have since enacted similar public-private partnership legislation. In 1993, Poole oversaw a study that coined the term HOT (high-occupancy toll) Lanes, a term which has become widely accepted since.

California Gov. Pete Wilson appointed Poole to the California's Commission on Transportation Investment and he also served on the Caltrans Privatization Advisory Steering Committee, where he helped oversee the implementation of AB 680.

From 2003 to 2005, he was a member of the Transportation Research Board's special committee on the long-term viability of the fuel tax for highway finance. In 2008 he served as a member of the Texas Study Committee on Private Participation in Toll Roads, appointed by Gov. Rick Perry. In 2009, he was a member of an Expert Review Panel for Washington State DOT, advising on a $1.5 billion toll mega-project. In 2010, he was a member of the transportation transition team for Florida's Governor-elect Rick Scott. He is a member of two TRB standing committees: Congestion Pricing and Managed Lanes.

Aviation

Poole is a member of the Government Accountability Office's National Aviation Studies Advisory Panel and he has testified before the House and Senate's aviation subcommittees on numerous occasions. Following the terrorist attacks of Sept. 11, 2001, Poole consulted the White House Domestic Policy Council and the leadership of the House Transportation & Infrastructure Committee.

He has also advised the Federal Aviation Administration, Office of the Secretary of Transportation, White House Office of Policy Development, National Performance Review, National Economic Council, and the National Civil Aviation Review Commission on aviation issues. Poole is a member of the Critical Infrastructure Council of the Los Angeles Economic Development Corporation and of the Air Traffic Control Association.

Poole was among the first to propose the commercialization of the U.S. air traffic control system, and his work in this field has helped shape proposals for a U.S. air traffic control corporation. A version of his corporation concept was implemented in Canada in 1996 and was more recently endorsed by several former top FAA administrators.

Poole's studies also launched a national debate on airport privatization in the United States. He advised both the FAA and local officials during the 1989-90 controversy over the proposed privatization of Albany (NY) Airport. His policy research on this issue helped inspire Congress' 1996 enactment of the Airport Privatization Pilot Program and the privatization of Indianapolis' airport management under Mayor Steve Goldsmith.

General Background

Robert Poole co-founded the Reason Foundation with Manny Klausner and Tibor Machan in 1978, and served as its president and CEO from then until the end of 2000. He was a member of the Bush-Cheney transition team in 2000. Over the years, he has advised the Reagan, George H.W. Bush, Clinton, and George W. Bush administrations on privatization and transportation policy.

Poole is credited as the first person to use the term "privatization" to refer to the contracting-out of public services and is the author of the first-ever book on privatization, Cutting Back City Hall, published by Universe Books in 1980. He is also editor of the books Instead of Regulation: Alternatives to Federal Regulatory Agencies (Lexington Books, 1981), Defending a Free Society (Lexington Books, 1984), and Unnatural Monopolies (Lexington Books, 1985). He also co-edited the book Free Minds & Free Markets: 25 Years of Reason (Pacific Research Institute, 1993).

Poole has written hundreds of articles, papers, and policy studies on privatization and transportation issues. His popular writings have appeared in national newspapers, including The New York Times, The Wall Street Journal, USA Today, Forbes, and numerous other publications. He has also been a guest on network television programs such as Good Morning America, NBC's Nightly News, ABC's World News Tonight, and the CBS Evening News. Poole writes a monthly column on transportation issues for Public Works Financing.

Poole earned his B.S. and M.S. in mechanical engineering at Massachusetts Institute of Technology (MIT) and did graduate work in operations research at New York University.