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Travel and the Cost of Terror

   Since  the  terror  attacks  of  September 11th, 2001, the airline and
   travel  industries in the United States have spent billions of dollars
   around the world to manage security threats. But what are the economic
   effects of these threats, and how are travelers handing them?

   Philip Alexiou | Washington DC 16 February 2010
   Planes on tarmac

   Despite  several  high  profile  attempts  to  blow  up airplanes, and
   heightened  security  measures  and  hassles  at  the  airports,  more
   Americans  are  flying  than  ever  before.   And it's not just in the
   skies:  back  down on the ground, ridership aboard Amtrak rail service
   is also rising.

   This  year, the U.S. Transportation Security Administration will spend
   a  billion  dollars  on security, twice what it spent in 2009. But the
   airline industry is spending much more.

   "Airlines  around  the  world pay $5.9 billion annually for security,"
   says  Steve  Lott  of  the  International  Air  Transport Association.
   "Money  that  might  go  into  security  upgrades  on an airplane like
   securing the cockpits doors, crew training for security issues."

   

   Lott  says a big but largely hidden part of that cost is handling data
   and  data  exchange.   "Airlines  have  to transmit passenger lists in
   their   passenger  manefest  to  the  govt  because  the  govt  checks
   passengers against watch lists and no fly lists."

   But how do attempted terrorist attacks - such as on Christmas day when
   a  23  year-old Nigerian, Umar Farouk Abdul Mutallab tried to ignite a
   bomb on a U.S.-bound airliner - change people's travel habits?

   That's  a  question Mike McCormick, executive director of the National
   Business Travel Association, put to members of his organization. "When
   we  talked  to  them  about  that  event  and  would they change their
   behavior,  only two percent said they would change their travel habits
   in some way."

   Bruce  McIndoe  is the president of iJET Intelligence Risk Systems. He
   says  the  layers  of  security  added  year after year in response to
   attacks  translates  into  billions of dollars in labor and equipment.
   "Once security is stepped up that causes flight delays in the system,"
   he  says,  "and  those  delays  run  into  the hundreds of millions of
   dollars for the airlines dealing with personnel, equipment that is not
   actively  generating revenue because its sitting on the ground waiting
   for things to happen."

   Bad  weather  can  have  the  same effect on productivity: planes sit,
   nothing moves, business stops.

   Terrorism aimed at airlines tends to have the same dampening effect as
   an  accident,  according  to  airline  attorney  Roy  Goldberg  - both
   happen,  but  people  still believe airline travel is very safe. "Even
   with  the  underwear  bomber  in  December,"  says  Goldberg, "airline
   prices, shares, stock prices actually went up five persent in January.
   The  fourth quarter of 2009 was better than 2008. I think the industry
   realizes these are short term problems."

   Recessions  and  travel  costs  affect  travelers' decisions more than
   anything  else.  Analysts say an actual act of terrorism does not cost
   an  airline  as  much  in  lost business as does the cost of trying to
   prevent  terrorism.   And, they say, airlines fear that in response to
   heightened  security  measures,  travelers could begin to change where
   they go and how they get there.

   "If we get to a point where screening is much more invasive - where we
   require  much  greater  background  checks,  people are going to start
   asking  what do I do with my family, what do I do with my spare time?"
   says  David  Grier of George Washington University.  "How do I want to
   explore  the world and get a better sense of my place in it? That will
   point to other ways of transportation."

   Despite  these  concerns, the U.S. airline and travel industries hopes
   Americans continue to take to the air in greater numbers than ever.

   You  can  watch this, and all of Philip's "Money In Motion" [1]reports
   here.

References

   1. http://www1.voanews.com/english/video-audio/money-in-motion/

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