Tuesday, September 28, 2010

Air Transport Security

The US airline industry was substantially deregulated in 1979 by the Carter Administration. Since then it has struggled to find an effective business model with most of the existing airlines on that date long gone. Post-9/11/01 almost $40B in direct and indirect subsidy has gone into the airline industry. It has lost an additional $55B since that date. Why does it continue to operate? At some residual level people are willing to travel relatively vast distances to visit business relations for face-to-face meetings and also friends and relatives. Is this necessary travel? Yes in the modern world but note that foreign airlines are largely prohibited from operating domestically in the US. This AM papers reporting Southwest Airlines will dominate traffic at Reagan National Airport in very near future if merger approved with another airline and 31% of traffic at that airport.

Why is this important? Airline hijacking was known well throughout the late 60's and 70's leading to the Air Marshall program. I once was offered a temporary duty assignment on return from active duty while an IRS lawyer. I declined. Yet I thought that program and the effort to protect cockpits had largely ended the domestic threat of hijacks. Was I surprised post 9/11/01 to find that the airline industry had successful opposed both programs. Well we all know the result.

What has happened post 9/11 is that the Airline Industry has recieved the largest security subsidy of any sector of the economy until the 2008 financial collapse of the FIRE sector (Financial, insurance, Real Estate] resulting in over $14T in front door and back door subsidy to that sector by the Treasury Department (TARP) and the FED.

Led by former Tom Daschle's wife [an aviation industry lobby ist} who was then in the SENATE the industry got through the TSA as primarily an airline industry security feature and funded fully by the federal government. This was a brilliant lobbying effort and note for the record since leaving government, Tom himself is a registered lobbyist. Hey it beats going back to S. Dakota.

My point is enhanced when I note for the record the TSA effort is largely a failed effort. Scanning machines for individuals have been installed but the first two rounds of technology were largely failed. A third round is now being installed. Also statutory mandates to screen all luggage have not been met. But why is this TSA such a problem? First in my opinion should be returned to DOT and all sectors of public transport exercised. Most airports in the US are privately owned and their security is not covered by TSA. We know that fairly heavy casualties can be inflicted in crowded airports with low technology bombs and weapons. This area is not just not treated equally but almost no review of security inside the airports themselves has been conducted by either the industry or government. Essentially it is unregulated.
So the bottom line next time you climb on a plane note you are relatively safer once in that ultimate test of your trust in technology, a long aluminum hull guided by several people. But getting there and leaving there is highly questionable security. And by the way recent reports indicate relatively no WMD terrorist attacks might in fact be the future for the bulk of attacks domestically and internationally.