analysis

 

Implications of Foiled UK Aviation Plot

Prepared by Business Travel Coalition

August 15, 2006

 

Policy & Practical Implications of Foiled UK Aviation Plot

01►Introduction
02►Near-Calamity; An Action-Forcing Event
03►Aviation Security: Mission Accomplished?
04►The Need for Rational, National Debate
05►Traveler Security Best Practice
06►Consequences for Business Travelers
07►Airline Industry Implications
08►Business Continuity Planning
09►Aviation Industry Continuity Planning
10►BTC Recommendations

 

01►Introduction
Now that several days have gone by since the plot to blow up airliners headed toward the U.S. over the Atlantic Ocean was foiled by UK authorities, we have come to know more of the details. The plot was feasible, well planned, sufficiently financed and in advanced planning stages. This near-catastrophic development will likely have a permanent impact on U.S. policy, and as such, on corporations that purchase commercial air transportation services, travelers and airlines.

The purpose of this analysis is to provide corporate travel managers (CTMs) and other industry and government participants in the travel industry with additional analysis that highlights several issues and implications--stemming from the failed UK attack--for federal policy, business continuity and aviation system contingency planning.

This document was not intended to be definitive in nature regarding the many questions that need to be raised in light of last week’s events. Rather, this paper was meant to be timely and to initiate debate.

02►Near-Calamity: An Action-Forcing Event
With previous post 911 elevations of Department of Homeland Security (DHS) alerts, which were subsequently lowered, business essentially returned to normal. Not with this UK development, in the view of many observers. Most people remember the disrupted al Qaeda plot some 11 years ago to blow up aircraft over the Pacific Ocean, the so-called "Bojinka" attack. Aviation system attacks, whether an airport in Athens, or a plane over Scotland, have a tremendous impact on the public’s psyche, which in turn prompts political responses. Add in the potential for substantial economic harm, and it’s no wonder why the aviation system is considered by terrorists to be such a super rich target.

Although no one died in this latest terrorist attempt, its impact is huge in a post 911 environment where theoretical catastrophic attacks on the aviation system have been replaced by the reality of death by the thousands. Many a reaction to 911 was shock, fear, anger. Emotion this time may have been replaced by sobering reflection, with consumer conclusions that these terrorists, despite billions of dollars in aviation security initiatives, still possess the interest, means and methods to create horror in the skies.

Had this UK-originated plot succeeded, the global airline industry would have been brought to its knees. Passengers, flight crews and investors would have been exceedingly difficult to find, and with the still-weak balance sheets of many U.S. airlines, a consequence could have been collapse of the aviation system, for some extended period of time. Moreover, with the airline industry an economic fulcrum across industrialized countries’ economies, and with a likely spike up in oil prices were the planned UK-based attack successful, another consequence could have been a global recession.

U.S. elected officials will likely realize this, and feel compelled to act, especially in a national election cycle. A re-examination of our aviation security mission over the next two years will likely be undertaken. This could actually be a very good “reaction” if the process is thoughtful and fully engages the American people, and its allies. Importantly, the context for debate should not be framed just around aviation security, nor even national security, but rather, national defense. Ten wide-bodied aircraft launched from overseas to cause harm to our citizens and economy is an attack on the United States.

03►Aviation Security: Mission Accomplished?
The mission of federal aviation security policy post 911, perhaps understated, has been to prevent another aircraft from ever again being used as a weapon of mass destruction. To accomplish this, aircraft transponders were made largely tamper-proof, pilots were trained in defensive aircraft maneuvers to disrupt the cabin, some pilots were armed, cockpit doors were locked and reinforced, the number of federal Air Marshals was increased, crew and passengers were transformed from passive to active participants in a highjacking attempt, F-16s waited in the wings and billions of dollars were invested in airport screening.

It could be argued that this mission was accomplished a couple of years ago. Cynics have since argued that the billions of dollars we continue to spend in the “front-of-the-house” in screening is mere “window dressing,” and unnecessary. Some of these detractors would argue that if a terrorist blows up a plane somewhere in the world at some time, the loss of life would be tragic, but we would get beyond it. They would say with some justification that we cannot continue to raid the Treasury and financially burden the airlines for this low-probability, relatively low-impact scenario.

BTC believes these critics’ voices have been largely muted. The optics of not one, but ten destroyed aircraft, and murdered passengers, are as chilling as they are revealing with respect to how vulnerable the security of our people, economy and way-of life remain. Elected officials will not be able to ignore this sobering reality and will likely feel they have to do something.

04►The Need for Rational, National Debate
The danger, of course, is that reactionary proposals will be developed and authorized. The opportunity now is to finally get aviation security right, at the policy level, and in the appropriate overall context. Current U.S. policy is an outgrowth of immediate post 911 political reactions. We have never had a rational national public policy debate regarding the definition of the problem, i.e. do we have an aviation security, a national security or a national defense problem?

Moreover, and depending on the definition of the problem, the questions that need to be examined include what resources would be available to put against which prioritized risks and threats and what would be the required tradeoffs in personal liberties? Who would be charged with safeguarding citizens against abuse and the institutionalization of such personal liberty takeaways? If this is a war, how will citizens know when it has been concluded so that restrictions on personal liberties could be lifted? This is a debate we never had, post 911.

Security experts will testify that unlike safety, which can be improved in quantifiable ways over time, security is more like a moving target. Close one gap and the bad guys exploit another. Box cutters one day, explosives in shoes the next, shoulder-fired rockets, then sports drink containers. So this begs an important question for the debate: where do we get the best return for a dollar spent, on a $5M explosives scanning machine, or in the field with intelligence gathering and analysis to catch the bad guys before they ever get near an airport? (Note: The failure to gather, analyze and share intelligence was a root cause of the 911 tragedy; not a single aviation security protocol was violated on 911.)

This UK development, and the current U.S. election cycle, could combine as a catalyst to begin to engage the American people in a long overdue and critically important national discussion about this issue that impacts virtually all citizens. Some of us are standing in airport security lines, others are seeking to have their names removed from mismanaged terrorist Watch Lists, and still others are burying loved ones who gave their lives in Afghanistan or Iraq.

05►Traveler Security Best Practice
The near-calamity over the Atlantic will reinforce for corporations the criticality of knowing where travelers are by requiring them to make travel arrangements through a company-designated travel agency, and by implementing processes to track their whereabouts anywhere in the world at any time. This has become a travel management best practice for the Fortune 200 companies, but will now likely sweep across and beyond the  Fortune 2000 , and their equivalents around the globe.   

What’s more, CTMs will become even more emboldened with regard to not letting airlines fragment airfare content and entice travelers out of managed travel programs to airline websites or call centers for special promotions or web-only fares that undermine this corporate best practice. “Airline.com” is not where corporate travelers should be for security, cost and productivity reasons.

The business travel industry is a complex, relationship-based one where supplier and buyer need to respect the interests of one another. For airlines the interest is sustainable profitability. For corporations, it is a security-centric, efficient and cost effective managed travel program.

Airlines, like any commercial enterprise, are free to distribute their products in whichever distribution channels they deem most beneficial to them. However, corporate purchasers of air transportation services are airlines’ very best customers, and as such, these customers have been clearly expressing their requirement to have all airline offerings available through one channel. Their voice will only grow stronger in light of last week’s developments in the UK.

The Air Canada Tango controversy, where the airline’s lowest fares were removed from global distribution systems (e.g., Galileo, Sabre), the channel corporations depend upon, is a microcosm of the debacle U.S. travel distribution reform has become. Both the Air Canada and U.S. reform situations point to the threat of airfare content fragmentation and the implied consequence of travelers booking flights outside their corporation’s managed travel program at “airline.com” wherein information regarding their whereabouts is lost.
        
 06►Consequences for Business Travelers

The restrictions emplaced last week by the Transportation Security Administration (TSA) regarding bringing liquids on board aircraft could become permanent, and indeed, expanded. We do not know what information TSA may be in possession of from the UK interrogations of the 24 terror suspects, the arrests in Italy over the weekend or intelligence provided by Pakistan. In other words there may be additional plots underway in various stages of planning that would prevent TSA from loosening current restrictions.

Business travelers generally do not check their luggage. Instead, they typically carry on an overnight bag. Now, they are not permitted to bring on board toothpaste, hair gel, hair spray, shampoo and other similar items. A worst-case scenario would be if TSA banned all carry on items, with the exception of traveler identification, baby foods and perhaps some prescription medicines (Although security experts believe these are problematic as well.).

If all overnight bags, as well as all other carry on items were ordered checked, many baggage systems around the country would be simply overloaded and would fail; airlines would incur higher labor costs; and business travelers would need to plan to arrive earlier to check bags and wait at the end of a flight to retrieve them. This would impact business traveler demand for commercial air transportation services, especially in city-pair markets under 500 miles distance (the new “short-haul”).

If laptops were banned from airplane cabins, business travelers’ productivity would be impacted from the time a traveler left his home until he returned. Business travelers would not check a $2,000 laptop, with sensitive company information on it, for the rational fear that it would be stolen, lost or damaged. As such, business travel demand would take a major hit in both short and long-haul markets.

For reasons outlined previously in this paper, BTC believes that a major review of U.S. aviation system security is forthcoming and this could lead to additional restrictions on business travel activities and routines.

07►U.S. Airline Industry Implications

Business travel demand

Registered Traveler & Secure flight Programs

financing aviation system security

08►Business Continuity Planning
Closely tied to the issue of security best practice discussed above is the initiative to modernize continuity planning at many corporations. The potential threat of an H5N1 (bird flu) pandemic has prompted corporations around the world to examine the resources and support systems that would be necessary to continue conducting business were a pandemic to march across the globe

Some companies, skeptical after the Y2K bust, have largely ignored the business continuity issue. Other companies have plans to deal with industrial disasters, pandemics and terror attacks with varying degrees of sophistication. Some contingency plans anticipate crises with immediate, but limited impacts such as a chemical tanker rupturing after a train derailment alongside a manufacturing plant. Other plans seek protection against gradual, but widespread calamities such as an H5N1 pandemic.

Had the terrorists succeeded last week in the UK, though, the impacts would have been immediate and widespread. Companies need to review, and modify where necessary, their business continuity plans for a “lights out, game over” scenario for the airline industry, at least for some extended period of time.

Charter jets, video conferencing capacity and extra bandwidth need to be arranged for on a contingency basis prior to such a calamity occurring. CTMs need to play a central role in raising the visibility to corporate senior management of this kind of severe threat to the enterprise. 

09►Aviation Industry Continuity Planning
In testimony before The Senate Committee on Commerce, Science and Transportation on January 9, 2003, BTC asked whether the U.S. DOT had contingency plans in place in the event a catastrophe caused the collapse of the U.S. aviation system. It did not.

In the event of such a collapse, that would have surely occurred last week had the planned UK attacks been successful, the government would need to make complex and difficult decisions regarding what commercial air services would need to be “ordered” back into place to keep high priority travel and the economy going. The political pressure from each Member of Congress would be overwhelming in the aftermath of such a shock to this critical infrastructure.

In BTC’s view, the U.S. needs to pursue scenario building exercises to help understand the implications surrounding a massive aviation system failure. A plan should be developed and vetted with the airline industry and Congress before such a disruption were to occur to minimize economic damage and to forestall an unproductive national argument, during a time of national emergency, regarding who receives air services in such a situation. The National Academies of Sciences Transportation Research Board could be directed by Congress to take the lead in this important responsibility.

10►BTC Recommendations

Congress should consider initiating a thorough, inclusive review of the mission of aviation system security in the larger context of national defense and with consideration of the implications for personal freedoms and liberties and the financing of the security system.

Congress should consider directing the U.S. Department of Transportation and the National Academies of Sciences to develop a contingency plan to have ready in the event of a collapse of the commercial aviation system.

Corporations need to heed the threat to their enterprises of the terrorist events of last week and modify their business continuity plans.