The last six months have seen an unprecedented upheaval in the commercial aviation sector due to the COVID-19 pandemic. Even as aviation begins to show signs of recovery, the statistics are daunting. The most recent data from Airports Council International (ACI) revealed that global passenger traffic declined by an unprecedented 94% year-over-year in April 2020. For the first four months of 2020, global passenger travel dropped by almost 42%. In the US, the number of passengers screened by TSA at airport checkpoints has risen steadily since mid-April, but even so it stands at a mere 27% of the volume from last year.
As a result, airlines, airports and their employees are enduring a full-fledged economic crisis, involving massive staff layoffs and reduction in service. Furthermore, were it not for large-scale government support programmes, some iconic air carriers and international airports might have been forced to shut down altogether.
The human and economic consequences of COVID-19 changes have been so dramatic and painful, it seems almost fanciful to consider the post-pandemic aviation security landscape. With passenger travel numbers down significantly, and airports and airlines struggling to survive, aviation security has unquestionably receded from the public consciousness. But just because it is not currently ‘top of mind’ for many travellers, does not mean it is less important, now or in the future. Furthermore, there are signs that COVID-19 may fundamentally change how aviation security is delivered, and who pays for it. In this new environment, public/private partnerships will play an increasingly important role, especially for new security and passenger facilitation technologies.
To see why this is the case, first consider the most current forecasts for air travel volumes from IATA. Assuming there is no dramatic second wave of COVID-19 infections, and a steady economic recovery, IATA forecasts that travel volumes will reach only 70% of pre-pandemic levels by the end of 2021.1
The loss of nearly a third of passenger volumes will have a devastating impact on airlines, and consequently the rest of the aviation ecosystem. The same IATA report shows that before COVID-19, only 30 airlines accounted for total airline industry profitability – there are nearly 100 air carriers that were unprofitable before COVID-19. That means there will be consolidation, a reduction in routes and less capital to invest in new technologies.
Not surprisingly, airports face a similarly challenging environment. ACI World’s forecast for 2020 estimates a 56% reduction in global airport revenues due to COVID-19. Nor are government aviation security agencies such as US TSA immune from the consequences. Although TSA is likely to receive more funds in the short term to pay for PPE, new cleaning procedures and deployment of checkpoint CT technology, TSA’s actual screening activity is down by 70% compared to last year. As a result, there will be tremendous pressure on TSA to reduce its mammoth airport security screening workforce to align with the reduced number of US travellers at airports.
Yet, even as the aviation industry faces significant economic pain, there is also recognition that pre-COVID processes have to change to address new health and safety concerns.
One sign of change is that some major airlines have embraced health, safety and cleanliness as part of their COVID-19 operations and marketing messaging. For example, Delta Airlines promotes its ‘Delta Clean’ programme and its willingness to keep middle seats empty as a competitive differentiator. Emirates Airlines has now said that certain travellers from the US will be required to show negative COVID-19 tests upon arrival.
Global airports are also taking measures. London’s Heathrow Airport is considering offering private COVID-19 testing upon arrival at Heathrow, allowing arriving travellers from countries outside the UK’s approved travel corridor to bypass the UK government’s mandatory 14-day quarantine.
Another indicator is TSA’s new strategic roadmap, which calls for TSA to implement contactless and ‘lighter touch’ security screening processes. This means that US airport checkpoints may see a whole set of new technologies, including biometric-enabled identity authentication, ‘stand-off’ people screening solutions, remote screening of passenger baggage – possibly even ‘self-service passenger screening’.
All these initiatives – even if not directly tied to aviation security technology – will compete with aviation security for funding.
Where will this funding come from?
And how will airlines, airports, and regulators manage in an environment where revenues are declining, even as new investments are required?
In the US, the short-term answer from airports and airlines is clear: the US federal government. In April 2020, the US government agreed to provide billions of dollars of financial assistance to US airports and airlines. Given their current financial circumstances, US airports and airlines are understandably reluctant to take on any new investments or operating expenses, whether for security, passenger facilitation or health screening of passengers. In the EU, airports are now calling for direct support as well, including compensation to airports for general operating costs (including security screening and sanitary measures) and requiring airlines in receipt of governmental bailouts to pay airports for the use of their facilities. In other words, over the next year at least, the landscape for public-private partnerships for aviation security is going to be dominated by public sector investments.
“…TSA’s actual screening activity is down by 70% compared to last year. As a result, there will be tremendous pressure on TSA to reduce its mammoth airport security screening workforce…”
But if, as forecast, passenger volumes begin to stabilise and recover in 2021 and beyond, the outlook for true public-private partnerships to enhance aviation security and passenger facilitation should improve, driven by several factors.
The first factor is change in the US aviation security sector, which has been a global anomaly; unlike almost all other countries, TSA not only sets aviation security standards and regulations, it also procures and operates aviation security equipment at US airports. But in the months leading up to the outbreak of COVID-19, cracks began to appear in this one-size-fits-all approach. In 2018, with airlines desperate to improve passenger throughput, TSA allowed airlines to ‘donate’ checkpoint CT screening equipment and automated screening lanes (ASLs) to TSA at major US hub airports.
In 2019, TSA formalised this approach with the ‘Capability Acceptance Process’ or ‘CAP’. Translated into English, CAP is a programme for airlines and airports to directly purchase aviation security equipment that has been vetted by TSA, and then give it to TSA to operate and maintain. In addition, TSA can use CAP for ‘emerging capabilities’ (i.e. new aviation security technologies) for testing and evaluation purposes.
Of course, COVID-19 has impacted this initiative. US airports and airlines are in recovery mode, which drastically limits their ability to donate anything to TSA. In the near term, they want TSA to do as much as possible, not only purchasing new security equipment but also screening passengers for COVID-19.
But when the crisis passes – and it will when a vaccine is widely available – the underlying advantages of combining public and private investment will assert themselves.
For example, once passenger volumes stabilise and airlines are aggressively competing again for higher margin business travellers, one can easily imagine a major airline or airport terminal operator using a public-private partnership to help implement a touchless, high-speed screening lane using biometrics and stand-off people screening technologies for premium customers.
The second factor that will help drive a post-COVID 19 resurgence in public-private partnerships is the pressure of government deficits. According to a July 2020 report by the International Monetary Fund, global government debt is at its highest level ever. Government debt in advanced economies – which dominate aviation security related spending – now stands at an average of over 131% of GDP.
In the short-term, there may be no good alternative to deficit spending. But once a COVID-19 vaccine is widely available and the immediate crisis of the ‘Great Lockdown’ has passed, many governments will have to discipline their spending, which will inevitably impact public funding for aviation security technology.
Exactly how these forces will play out is impossible to predict. But one thing seems clear: COVID-19 has fundamentally changed and expanded people’s expectations of aviation ‘security’, highlighting the need for investment, innovation, flexibility and new thinking. Public-private partnerships are well suited to meet those requirements and enable improved aviation security and passenger facilitation.
Andrew Goldsmith is managing director of LAM LHA Consulting, LLC, an advisory firm based on Paris, Brussels and Washington, DC. He can be reached at firstname.lastname@example.org.
“…one can easily imagine a major airline or airport terminal operator using a public-private partnership to help implement a touchless, high-speed screening lane using biometrics and stand-off people screening technologies…”