In this issue:
- Conservatives and PFCs
- Remove the airport privatization poison pill
- Body scanner cost-effectiveness
- Foreign object debris on runways
- Support for Trusted Traveler program
- News Notes
- Quotable Quotes
Why Conservatives Should Support Passenger Facility Charges
November’s “wave election” dramatically shifted control of the House to conservative Republicans committed to reducing the scope and cost of the federal government. A month later, the report of the President’s deficit reduction commission laid out an ambitious agenda for scaling back the government’s size and cost, aiming to slash ever-expanding deficits and an out-of-control national debt.
It is in this context that Congress will return to the long-delayed bill to reauthorize the Federal Aviation Administration and the aviation user taxes that fund most of the FAA and all of the Airport Improvement Program (AIP). The previous House bill called for an increase in the cap on passenger facility charges (PFCs)–per-passenger fees that individual airports can institute to pay for FAA-approved capital investments. The previous Senate bill had no such provision. PFC are in place at 353 U.S. airports and raised an estimated $2.79 billion last year. Some of the proceeds are used directly to help pay for smaller projects, but a growing share of the money is used to pay debt service on bonds that airports issue to finance large improvement projects.
While airport groups will again urge both houses to increase the PFC cap (currently $4.50 per passenger) to keep pace with inflation since it was last increased a decade ago, the airlines will very likely continue their deceptive campaign to label any PFC cap increase as a “huge federal tax increase.” Unfortunately, my friends at taxpayer organizations like Americans for Tax Reform and the National Taxpayers Union continue to get sucked in by this kind of rhetoric. That’s especially unfortunate, because the PFC is exactly the kind of devolution of responsibility from the feds to local authorities that fiscal conservatives like those now in charge in the House should be supporting.
Until PFCs were authorized by Congress in 1990, airports were prohibited by federal law from charging passengers anything. Instead, Congress preferred that airports get capital funds by means of federal grants (AIP), which Congress itself would authorize and in many cases earmark. As a condition of taking federal grants, airports are required to submit to dozens of “grant assurances,” which amount to detailed federal economic regulation of airports. This kind of tax-and-grant system, with centralized control in Washington, DC and extensive earmarking, is exactly the kind of thing limited-government conservatives are supposed to be shutting down, in their mission of downsizing and streamlining the federal government.
If I had my druthers, I would end AIP altogether, devolving responsibility for capital improvements to airports of all sizes. That would also mean there would be no cap on the level of PFCs. That’s clearly not in the cards at this juncture. But allowing airports to raise a larger fraction of their capital funds themselves, in a decentralized, self-help manner, would not expand federal spending at all, while helping ensure that airports can continue to add needed runways and expand inadequate terminals. That’s exactly the kind of change House Republicans were elected to bring about.
Remove the Airport Privatization Poison Pill
Because of the numerous continuing resolutions that have delayed enactment of an FAA reauthorization bill, there will be a temptation for members of Congress to dust off their previous bills, eliminate several contentious union-backed provisions, and get the thing enacted. But the new House members have a responsibility to live up to their limited-government, devolutionary principles. That means looking carefully at all the detritus littering the previous House bill. One of those is an attempt to derail airport privatization.
In the 2008 House bill (HR 915), Sec. 143 contains two provisions intended to (1) make it harder to bring about airport privatization, and (2) reduce the incentive of companies to invest in such deals. The first would increase the airline approval requirement from the present 65% to a more-difficult 75%. Any state or municipal government that seeks to lease an airport under the existing FAA Airport Privatization Pilot Program may shift the lease proceeds to its general government budget only if it can achieve the required level of airline approval. And that 65% (or proposed 75%) hurdle is a two-part test. Approval is required from 65% of the number of airlines offering scheduled service at the airport, but also of airlines accounting for 65% of the annual landed weight (on which traditional landing fees are based). Few governments would want to lease an airport if they could not spend the proceeds.
The second poison-pill provision would exclude privatized airports from receiving AIP grants, even though passengers using such airports would still be paying the ticket tax that provides the bulk of the funds used for AIP. That would create a non-level playing field for the companies that lease airports; their competitors would be getting “free money” from the feds, from which they would be excluded, despite continuing to pay for it.
The new House Republican majority should make sure that this poison pill does not appear in their FAA reauthorization pill. No such provision was in the previous Senate bill, and none is expected.
Body Scanners Not Cost-Effective?
A whole series of government reports have called for the Department of Homeland Security (DHS) and the Transportation Security Administration (TSA) to do serious risk analysis and to base technology and policy decisions on risk analysis and cost-benefit analysis. The list includes the 9/11 Commission, the National Research Council, the DHS Office of Inspector General, and the Government Accountability Office. Yet there is no evidence that the TSA is doing this. As I reported here previously (April 2010), the GAO found that TSA had not done a cost-benefit analysis before deciding to deploy 1,800 body scanners for primary screening at U.S. airports. And now comes a new study making a persuasive case that this deployment is not cost-effective.
Mark Stewart and John Mueller did the new analysis, released this month by the Center for Infrastructure Performance and Reliability at the University of Newcastle in Australia. “Risk and Cost-Benefit Analysis of Advanced Imaging Technology Full Body Scanners for Airline Passenger Screening,” Research Report No. 280.11.2010, January 2011, is available online at: http://hdl.handle.net/1959.13/805595.
Risk-based cost-benefit analysis of terrorism countermeasures is inherently difficult, as the authors acknowledge. Compared with engineering analyses, where the risk is generally technically predictable, there is high uncertainty in estimating threat levels. One way to approach this problem, which they employ, is to do a kind of “break-even cost-benefit analysis that finds the minimum probability of a successful attack required for the benefit of a security measure to equal [or exceed] its cost.” The authors cite examples of other researchers using this approach in homeland security applications.
I don’t have the space here to summarize either the assumptions made or the details of the methodology used by Stewart and Mueller in this analysis, but it strikes me as a fair and reasonable approach. They cite data indicating that the annualized cost of deploying, operating, and maintaining the planned 1,800 body scanners will be $1.2 billion per year. They then go to considerable lengths to estimate the direct and indirect costs of an airliner being destroyed by a bomb smuggled on board by a passenger in the presumed absence of the body scanner program. The most difficult part is estimating the reduction in risk due to the body-scanning program. Here again, the analysis appears to be careful and thorough (bringing back memories of my operations research studies many years ago).
The question they end up answering is: “What does the yearly probability of a successful $26 billion [damages] attack with body-borne explosives have to be to justify spending $1.2 billion per year to reduce the total risk of this probability by 7.5%?” The 7.5% figure is the result of a long analysis, too detailed to summarize here, but quite plausible. The answer they derive is 61.5% per year-i.e., only if such an attack is that likely to succeed without the body scanner program in place would the annual cost of the program be worth it. (Stewart and Mueller also subject this result to uncertainty analysis and sensitivity analysis to test its robustness.) A simpler way to state the result is that for body scanners to be cost-effective, “on average every two years they would have to disrupt more than one attack with body-borne explosives that otherwise would have been successful despite other security measures, terrorist incompetence, and the technical difficulties in setting off a bomb sufficiently destructive to down an airliner.” And further, “the attack probability needs to exceed 160-330% per year to be 90% certain that [body scanners] are cost-effective.”
This analysis adds further weight to the case for Congress, in reauthorizing the TSA in this year of the 10th anniversary of 9/11, to rethink many aspects of this agency that it created in haste following that terrible attack.
Getting Serious About Foreign Object Debris
There has been well-justified outrage at the ruling by a French court that found Continental Airlines guilty of the criminal charge of manslaughter in the fatal crash of an Air France Concorde supersonic transport in 2000. The nexus was that a piece of metal that had fallen off a previous Continental flight was struck by the Concorde during its take-off run, leading to a fuel tank rupture and fire that brought the plane down. It seems bizarre that fault was assigned to Continental, rather the airport owner/operator, Airports de Paris (AdP), which had failed to keep its runway clear of foreign object debris (FOD). Ironically, the very same court had ruled against AdP in 1995, when a business jet experienced a fatal crash on takeoff at Charles de Gaulle Airport due to running into a flock of birds. Because the airport had not conducted a bird-scaring operation prior to that flight, the airport and its managers were found criminally liable for the deaths.
I am indebted for the latter story to Iain McCreary of a company called Insight SRI in Washington, DC. He forwarded to me a media summary of his recent report “Runway Safety: FOD, Birds, and the Case for Automated Scanning.” It does a credible job of making the case that bird strikes and FOD strikes are far more common than generally realized-at a large airport, typically two bird strikes and one FOD strike per week, half of which occur on the runway. Most don’t do large damage, but because some do and there are so many (including some leading to fatalities) they cost airlines a small fortune that is seldom added up. McCreary estimates that worldwide, FOD and birds cost $13.9 billion per year in direct and indirect costs, of which $6 billion arises from strikes on runways.
After documenting the cost impact, the report focuses on the rather casual approach many airports take to runway inspections. Nearly all airports rely on visual (“man-in-a-truck”) inspections, often only once or twice a day (although ICAO recommends four times a day). It presents data suggesting that because objects (and birds) move or are moved throughout the 24-hour period, a single visual inspection may find as little as 3 to 4% of FOD that may be present.
The report concludes by pointing out the benefits of automated scanning. As I first reported here several years ago, Vancouver is one of only a handful of airports to have implemented automated runway FOD scanning. Data from there and from others that have done so show that runway debris is far more common than previously expected. For example, Vancouver’s system finds FOD once every two days on average, compared with typically once every two months identified by visual scanning.
Since the costs of FOD and bird strikes are imposed mostly on airlines, they should be willing to support airports in shifting from visual to automated runway scanning-and that means not griping about the cost of such systems being included in the airfield’s cost base. But airports, too, should see the value in going automated, not only in increased safety and more-satisfied airport customers but also in reducing their liability exposure.
Note: the report on which this article is based is not available for free downloading, but can be purchased from Insight SRI at www.runway-safety.com.
Momentum Builds for Risk-Based Trusted Traveler Program
We may, finally, be reaching a critical mass of opinion in favor of creating a risk-based approach to airport passenger screening-one that separates passengers into low, medium, and high risk groups and screens them accordingly. The catalyst appears to have been the introduction of body scanners and aggressive pat-downs by the TSA during the second half of 2010.
In-depth, front-page articles giving serious exposure to this idea and its knowledgeable advocates appeared last month in the Washington Post (Dec. 16) and in various Tribune Company newspapers (Dec. 28). The latter included supportive quotes from security expert Brian Jenkins of RAND Corporation and public-interest law professor John Banzhaf.
An array of aviation and travel organizations have gotten on board the idea in recent months. The U.S. Travel Association created a task force to develop a proposal for a system that uses intelligence information to inform a risk-based approach to passenger screening. On December 2nd it called for creation of a Trusted Traveler program in which passengers would, in effect, be screened prior to arriving at the airport, and once there, would be routed accordingly. In mid-December the International Air Transport Association (IATA) released a proposal for separating passengers into three groups and screening them accordingly, aimed at shifting the focus toward “finding bad people, not bad objects.” Salon.com’s “Ask the Pilot” columnist Patrick Smith applauded the IATA proposal as “the best idea I’ve heard yet with respect to restoring sanity to airport security.” The Business Travel Coalition and the National Business Travel Association have also come out in favor of the idea. BTC’s Kevin Mitchell had an especially good opinion piece on the subject in the January 4th issue of Aviation Daily. Former American Airlines CEO Bob Crandall has also called for a risk-based Trusted Traveler program.
Please note the important shift in terminology that’s at work here. What we had before, during the heyday of Clear and its competitors (and their new successor companies) is a “Registered” Traveler program. All that does is give members the opportunity to go to the head of the line to get screened, in exchange for paying an annual fee. It is NOT a risk-based program that shifts TSA resources from lower-risk to higher-risk travelers. None of those I’ve cited in this article are calling for Registered Traveler. What we all want is a risk-based program in which low-risk travelers are vetted in advance and therefore need only minimal screening when they arrive at the checkpoint. That’s what Trusted Traveler means.
Will the TSA get the message before Congress mandates them to shift direction? Last week, there was a hint that this might be in the cards. TSA Administrator John Pistole spoke at an American Bar Association conference, in his first public event since TSA began aggressive pat-downs prior to Thanksgiving. Here is what CNN reported:
John Pistole said Thursday [Jan. 13] that the use of detailed identity profiles would be part of a shift toward the greater use of intelligence to try to disrupt potential terrorist activity against commercial flights. “There are groups of people out there, the very frequent travelers, who are willing to provide information” Pistole said in remarks to a lawyers’ group. So, he continued, for a fee, “If you don’t want to stand in line, here’s what we can do.” Pistole said passenger identification would be more stringent than the typical name, date of birth, and gender now required to board a jetliner-information he described as “not much to go on.” He said a trusted traveler program would apply to “those individuals who are willing to disclose more information about themselves in exchange for a different level of screening.”
There have been occasional hints like this from previous TSA Administrators. Maybe this time it will be for real.
News Notes
Conference Will Address Airport Opt Out from TSA Screening
With the growth of interest in the TSA’s Screening Partnership Program, which allows airports to opt out of TSA-provided passenger and baggage screening in favor of contracting with a TSA-certified security firm, the American Association of Airport Executives is holding a Conference on Airport Security Choice and Privatization. It will take place March 11 in Washington, DC. Details are at: http://events.aaae.org/sites/110308/index.cfm.
International Trusted Traveler Program Expanding to Mexico
The Department of Homeland Security announced in late November that it had reached agreement with Mexico for a pilot test to expand the U.S. Global Entry program to frequent travelers between the two countries. DHS is the parent agency of TSA, which may be considering a comparable trusted traveler program for domestic air travelers.
U.S. Airport Privatization Is Coming, Says ACI-NA Head
Aviation Daily quoted Airports Council International-North America president Greg Principato as predicting that as many as 10 U.S. airports could be privatized this decade. The triggering factor would be economic pressures on cities and states, leading them to divest their airports via long-term leases, getting a return on their investment in the form of lease payments. “Once a mayor cashes a $2 billion check” from such a transaction, Principato predicts, political attitudes will shift to favor privatization. He also noted that airport managers are attracted to the prospect of “a little more freedom” under privatization.
American Expands Use of Automated Docking
After its successful implementation at DFW International, American Airlines has installed the laser-driven Safedock system at its hubs at Chicago O’Hare and Miami International. By making it unnecessary to use “marshalers” on the ground with wands, the system enables planes to dock more quickly. But it really saves time in the event of thunderstorms, when FAA regulations prevent ground personnel from being out on the ramp. So far, the Safedock system is in place at 400 airport gates in this country-but nearly 5,000 worldwide. It has apparently caught on faster in Europe, where most of the major airports are privatized. Despite labor union concerns about safety, the track record shows that Safedock dramatically reduces damaging incidents, by providing better situational awareness and more precise control of aircraft positioning.
Russia May Privatize Sheremetyevo
Of the 900 or so state-owned enterprises recently earmarked for privatization over the next five years, one is Moscow’s Sheremetyevo airport. The government-owned airport, one of three serving the Russian capital, handled nearly 15 million passengers in 2009 and is getting ready to add a third runway. Russia also plans to privatize Aeroflot, the largest airline, which is 51% state-owned.
TRB Releases Guide to Common Use
The Transportation Research Board’s Airport Cooperative Research program has released ACRP Report 30, “Reference Guide on Understanding Common Use at Airports.” The 232-page volume includes a CD-ROM with spreadsheet models. (www.trb.org/bookstore)
Quotable Quotes
“In the aftermath of the November elections, we have to rethink the whole question of PFCs. . . . If Congress truly wants to make policy on deficit reduction, one option is to increase the PFC significantly. Some would argue to remove the cap altogether so that airports who are able to and want to utilize the PFC as a tool may give up access to Airport Improvement Program funds. As a result, the amount of AIP that’s necessary in future years can go down, and you can apply that to deficit reduction. . . . Maybe we should get rid of the underlying statute that the PFC is an amendment to. That’s the Anti-Head-Tax Act, because right now the only reason we have a PFC [law] is because Congress previously enacted the Anti-Head-Tax Act . . . that prohibits airports from charging rates or fees based on the number of passengers using the airport. So the PFC program is an exemption or a narrow waiver to the Anti-Head-Tax Act. Why should the federal government be telling local governments what they should or shouldn’t do by way of rates and charges? Let’s just repeal the Anti-Head-Tax Act and then you don’t need a PFC program.”
–Mark Reis (managing director of Seattle-Tacoma International Airport), interview by Pauline Armbrust, Airport Revenue News, December 2010.
“Few government or third-party reports have been produced in the past eight years that compare the performance of private companies with that of the government in airport security. The lone outside study, commissioned by the TSA and written by an Arlington County information technology firm, compared a dozen airports and looked at data from 2004 through 2007. It found that private screeners perform at a level ‘equal to or better’ than their government counterparts. The full study’s findings have never been released.”
–Derik Kravitz, “As Frustration Grows, Airports Consider Ditching TSA,” The Washington Post, Dec. 31, 2010.
“In Israel, the main focus is on the passenger himself, what some people like to call profiling. It is not necessarily racial or ethnic profiling. It is more focused on information that is relevant to the level of risk. And only after we identify the level of risk, we adjust the level of search. So it is only passengers that meet the high end of the risk spectrum that would be subjected to the level of the scanning that we see today here [at U.S. airports]. . . . I think the TSA will have to start rethinking the use of this risk-based concept, because I think that we have more or less reached the line that the American public is willing to go.”
–Rafi Ron, interviewed by Joe Kernen and Rebecca Quick, “Rafi Ron on the Push-Back Against the Pat-Down,” CNBC/Dow Jones Business Video, Nov. 24, 2010.
“We understand that in the rush to prevent terrorism after 9/11 some money was going to be spent hastily. But government auditors shouldn’t be saying in 2010 that the TSA has failed to conduct a cost-benefit analysis of its technology. . . . Clearly, much more is at stake here than a concern about government spending. It is critical that our nation can trust air travel. We urge Homeland Security Secretary Janet Napolitano to overhaul how the TSA evaluates and chooses costly security screening technologies.”
–Editorial, “Serious Questions About Spending by the TSA,” The Denver Post, Dec. 30, 2010.
“While physical screening may be necessary in some cases, it is not the only measure to detect threats to aviation security. We need better intelligence; thorough threat analysis; reform of behavior detection processes, beginning with properly trained document checkers; and, after numerous Congressional directives, biometric identification must be developed to reduce the number of people requiring physical screening, and a more focused physical screening protocol needs to be instituted. Treating every passenger as a suspect or criminal is an inefficient use of scarce resources.”
–Rep. John L. Mica and Rep. Thomas E. Petri, letter to Hon. John Pistole, Nov. 19, 2010