Homeland Security Act of 2002 - Term Paper Example

? Homeland Security Act of 2002 Contents Contents 2 Introduction 3 Changes in security due to Homeland Security Act 4 No Fly List and Identification Requirement 4 Passenger Screening 4 Baggage Screening 5 Pat Downs & Full Body Scanners 5 Secure Flight Program 5 Arming Pilots against Terrorism 6 Impact of changes in Security 6 Increased Time for Security Clearance 6 Baggage Screening Problems 7 Revenue Losses 7 Baggage Theft 8 Impact of FFDO Program 8 Racial Profiling of Passengers 8 Information sharing & Gathering 9 FAA Premium War Risk Insurance 9 Conclusion 10 References 11 Abstract This paper discusses the Homeland Security Act of 2002 and the implications of the act on the airline industry. The act was passed as an aftermath of 9/11 attacks. It first provides the new airport security provisions which have been made under the act such as increased passenger screening, federalized baggage screening no fly lists and the secure flight program of the TSA. After discussing the security provisions, the impact of these provisions on airline revenue, profitability and reputation are also discussed. In the end the paper discusses the impact of the provision to cap airline liability in the case of a terrorist attack. It also explains the insurance provided by FAA in the face of high premium charges of private insurers after September 11 attacks Homeland Security Act of 2002 Introduction The Homeland Security Act of 2002 was passed by the US congress in the aftermath of the September 11 attacks in order to prevent further terrorist attacks on US soil. This act has created the Department of Homeland Security which has been given wide ranging powers in order to prevent terrorist strikes on US soil. The formation of this department has been termed as the largest re-organization of the federal government since the creation of Department of Defense. In the 9/11 attacks, airline security was found wanting. It was due to lax security at the airports that terrorists were able hijack planes and ram them into the twin towers. Because of this, airline security is an integral part of the Homeland security act. After 9/11, the Aviation and Transport Security Act (ATSA) was enacted which established the Transport Security administration. Initially, the TSA worked under the Department of Transportation but with the passage of Homeland Security Act, TSA was moved to the Department of Homeland Security from 2003 (Blalock & Kadiyali, 2007). Changes in security due to Homeland Security Act TSA introduced various changes in security measures under the Homeland security act 2002. Some of the major changes introduced have been listed below. No Fly List and Identification Requirement All adult passengers are now required to show a proof if identification before they are allowed to board a plane. Apart from this, TSA also compares the passengers against a No-fly list. Those whose names appear on the no-fly list are not allowed to board. This includes the names of around 21000 people. In addition to this TSA also has a list of Selectees, passengers who are to be screened thoroughly before being allowed to board a flight (Mueller, 2004). Passenger Screening Screening of passengers before boarding flight was initially done by private security screeners. In order to improve efficiency, TSA took over the screening of passenger’s at all commercial airports from November 2002. They increased the compensation of screeners in order to reduce turnover and also increased the amount of training provided to the screeners in order to make them more efficient. Baggage Screening Prior to 9/11 attacks, only 5% of the checked in baggage was screened. TSA mandated compulsory screening of all check in baggage from 2002. They were also asked to positively match the bag checked to a passenger on board the flight. Airlines were free to adopt any of the four methods in order to screen the baggage – Explosion Detection system, Explosion trace detection machines, bomb-sniffing dogs or manual search of the bags. Passengers are now required to check in and then take their baggage to a screening area where any of the four methods is employed for screening. If any prohibited material is found in the baggage of passengers, manual screening is done in order to be sure of the contents of the baggage (Subcommittee on Aviation, 2004). Pat Downs & Full Body Scanners Since the incident in which Umar Farouk tried to explode a plastic bomb by keeping it in his underwear, TSA has become more stringent with security measures. It now provides passengers with an option of either going for a full body pat down or a full body scanning in order to ensure that they are not carrying any prohibited materials along with them. These provisions have been in effect since November 2010. Secure Flight Program This program was started by the TSA from 2009. Under the Intelligence Reform and Terrorism Prevention Act of 2004, the Department of Homeland Security has taken over pre-screening of passengers from airline operators. All domestic as well as foreign airlines are now mandated to provide a list of passengers to the DHS before the flight. This list of passengers is matched with the no-fly list and the suspected terrorist list by the TSA. Passengers from the no-fly list are barred from boarding the flight under this program and those who are suspects are subjected to additional screening. Arming Pilots against Terrorism Arming Pilots against Terrorism Act is a part of the Homeland Security Act of 2002.The Federal Flight Deck Officer Program has been started by Federal air Marshall Service in order to train volunteer pilots in the use of firearms. Under this program, pilots are designated as federal officers who are authorized to use lethal force if any attempt is made to hijack plane, carry out terrorist activities or any other criminal activity during the course of the flight (Congressional Research Service, 2004). Impact of changes in Security This section of the paper will try to analyze the impact of changes in securities which have been introduced after the formation of TSA and the passing of Homeland Security Act. Increased Time for Security Clearance The new provisions for screening passengers as well as 100% of the luggage have increased flight time for passengers. They are now required to report to the airport well in advance of their scheduled flights. This has been further compounded by the resource allocation policies followed by TSA. Initially TSA allocated screeners based on the airport passenger volumes. However they did not take into account the fact that many airports serve as connecting airports where passengers are not supposed to pass through screening. This led to overstaffing, which was then rectified by a severe reduction in workforce. Even after 10 years of operations, many airports are still understaffed which has led to flight delay, passengers missing the flights and long lines for security clearance. The brunt of the passenger’s anger has to be borne by the airlines (Blalock & Kadiyali, 2007). Baggage Screening Problems 90% of the airports in the country have now deployed either the ETD or EDS machines in order to screen passenger baggage. However, ETS machines have been blamed for generating false positive identification for explosives in 30 % of the cases (Blalock & Kadiyali, 2007). This leads to unnecessary delay and manual screening which increases the security clearance time. ETD machines on the other hand are labor intensive. TSA simply does not have the manpower to use these machines even though they are more reliable. This has led to huge delay for airlines. Most of airlines use the same plane for two different flights. Thus, a delay in one flight has a cascading effect which causes delay in a number of flights of the airline. The baggage screening capacity of TSA is not in line with the volume of baggage which comes in the airports. Revenue Losses In a survey conducted by Woodyard and De Lolllis in 2003, 63 % of the passengers said that airport security is now a very big hassle (Blalock & Kadiyali, 2007). A study on the reduction in travel due to additional security measures conducted in 2007 has come to the conclusion that additional baggage and passenger screening measures have reduced volume of passengers by about 9 %. Airlines have lost billions of dollars due to prospective customers staying home or using alternate modes of travel. These revenue losses have come at a time when the country is already facing the problems of economic downturn and reduced expenses on air travel. Baggage Theft Since TSA took over the responsibility of baggage screening at airports, over 17000 cases of baggage theft have been reported. More than 200 screeners have also been arrested for baggage theft. When a theft takes place from a person’s baggage, he inevitably blames the airline for this loss. The airlines find it difficult to make the TSO’s responsible for theft accountable as they are neither their employees nor are they the employees of the airport management authority. Impact of FFDO Program The Federal Flight Deck officer program started under the Homeland Security Act has affected airlines in 2 ways. When a pilot volunteers for this program, he has to undergo training. During the training time, airlines are left to fend for themselves and have to search for alternate pilots in order to fill the spot of the pilot on training. This can lead to increased fatigue among other pilots as they have to cover up by putting in additional hours (Congressional Research Service, 2004). This poses a risk to the passenger’s safety. Another problem is with the handling of the firearm by the pilots. Not all pilots are careful while handling their gun. In March 2008, the gun of a US Airways pilot went off by accident during a flight from Denver to Charlotte. Although fortunately no one was injured, having a gun onboard a flying plane is a recipe for disaster with a major accident waiting to happen. Racial Profiling of Passengers Although TSA has explicitly stated that no racial profiling of passengers will take place during the screening process, this directive has been largely ignored by the security Officers at the airports. A large number of passengers with Muslims surnames or Asian looks have been subjected to intensive screening even if they have been declared as frequent flyers not requiring screening by the airline. This has led to a decrease in the number of Asian passengers travelling to USA, causing loss of revenue for the airlines (Mueller, 2004). Information sharing & Gathering The transfer of passenger screening from airline to TSA has put additional burden on the airlines to share information with the TSA. Names of all passengers in both domestic and international flights have to be made available to the TSA for this screening to take place. If any passenger is in the no-fly list, the airline is usually left to explain why he was not allowed to board the flight. Many such passengers have filed court cases blaming the airline for wasting their time and money. These litigation cases are an additional burden on the airlines. Apart from this the airlines have to constantly request and remind customers to reach airports in time for security checking and bring their identification certificates for the same. Disseminating this information places extra financial burden on the airlines (Mueller, 2004). FAA Premium War Risk Insurance The Homeland Security Act of 2002 also has provisions for the FAA to issue premium third party liability war risk insurance to U.S. air carriers if they feel the carrier cannot obtain insurance in the open market at reasonable rates (Phillips, 2009). This has proved to be a boon for the airline industry. In the aftermath of 2001 terrorist attack, the premium for war risk insurance had reached dramatic proportions. Before 2001, aviation insurers provided war risk insurance as an addition on to general hull and liability provisions with only a little additional premium. However, the attacks of 2001 made the insurance companies charge per passenger war risk premium. Just after 2001, the premium per passenger was $1.25 which translated into billions of dollars of investment for the airline industry as more than 2 million passengers fly daily only on U.S. airlines. Section 890 and section 1201 of the Homeland Security Act are also beneficial for insurance liability of airlines in the case of a terrorist attack. These sections have been picked up from the Air Transportation Safety and Stabilization Act which was enacted after the 9/11 attacks. These 2 sections have put a cap of $100 million dollars on the liability of an airline in case of a terrorist attacks (Committee on Government Reforms , U.S. House of Representatives, 2006). These 2 provisions – of providing FAA insurance and limiting the liability of the airline have been very affective in saving airlines from going bankrupt under insurance claims in the aftermath of a terrorist attack. One issue which the Homeland Security Act has failed to address is the cancellation of insurance policies by underwriters. Current aviation war risk policies allow the underwriter to cancel the policy by providing a 7 day notice. This provision was widely used after 9/11 attacks to cancel war risk policies by insurers and leaving the airlines to fend for them. Conclusion The Homeland security act has been a bane as well as a boon for the airline industry. Although it has limited the insurance liability of aviation firms and saved them from possible bankruptcy, it has also put additional pressure in terms of security requirements. Many new security arrangements ranging from increased passenger and baggage screening to arming of pilots under the FFDO programs have been implemented. Airlines claim that these new arrangements have caused loss of revenue worth billions of dollars. However, the provisions of Homeland Security Act are to ensure that no further strike like the one which occurred on 9/11 ever takes place again. In order to ensure this, all stakeholders including the airlines have to co-operate. There are many issues affecting airlines which the TSA needs to smoothen out but the security provisions are here to stay for a long time. Airlines need to live with them and find ways of increasing profits in spite of the new security restrictions. References Blalock, G., and Kadiyali, V. (2007). The Impact of Post-9/11 Airport Security Measures on the Demand for Air Travel. [report] New York: Cornell University. Committee on Government Reforms, U.S. House of Representatives (2006). Summary of Liability Provisions of The Homeland Security Bill. [report] Washington D.C.: U.S. House of Representatives. Congressional Research Service. (2004). Arming Pilots Against Terrorism: Implementation Issues for the Federal Flight Deck Officer Program. RL31674. [report] Washington D.C.: Library of Congress. Mueller, J. (2004). A False Sense of Security. Regulation, 37 (3), pp.42 - 47. Phillips, Z. (11th January, 2009). FAA extends war risk coverage for airlines. Business Insurance. Retrieved from: http://www.businessinsurance.com/article/20090111/ISSUE01/100026895 [Accessed: 3rd May 2013]. Subcommittee on Aviation (2004). Hearing on Aviation Security; Progress and Problems in Passenger and Baggage Screening. Hearing Transcripts United States House of Representatives. [report] Washington D.C.: United States House of Representatives. Read More