By Brendan Sobie and David Field in Washington
However it is unclear how long the remaining restrictions, which threaten to dampen business travel, will stick and who will pay for all the extra security brought in after the terror alert in the UK. Several of the restrictions, including a ban on all carry-on bags and electrical items, were lifted four days after UK authorities foiled a plot to detonate liquid explosives on several flights to the USA. But several restrictions, including a ban on liquids in carry-on bags, remained on both side of the Atlantic.
Carriers are pressuring the UK to lift the remaining restrictions, including a ban on any carry-on bags roughly larger than a briefcase. "The delays and cancellations are coming back to normal now but we don't know how long the security situation will last," says the Association of European Airlines (AEA). "We're talking huge costs."
The restrictions are hitting low-cost carriers particularly hard as their normally low airport handling and staffing costs have soared. Ryanair, for example, is threatening to seek government compensation unless security requirements return to pre-10 August levels.
But British Airways was at least initially the most affected carrier as security queues at London Heathrow, which on the first day of the crisis could only handle half the normal volume of passengers, snaked out the terminal door. It took eight days for BA to fully restore its Heathrow schedule and at one point the carrier had a 5,000-bag backlog.
Analysts believe demand will quickly return, although some short-haul business travellers could switch to other transport modes if security regulations are not further eased. "There may be a softening in demand in air travel and in retail sales, alongside increased security and handling costs, but experience suggests that these impacts will be short-lived," says Citigroup.
Airports are facing the double whammy of slumping retail sales and higher security costs. Duty free, food and beverage sales at UK and US airports are impacted by the ban on carrying liquids onto aircraft. Airport Council International (ACI) Europe says any airport with flights to the US, UK or Israel are impacted by the new regulations with the cost of the extra security shared with airlines.
ACI and AEA have been pressuring the European Commission (EC) since September 2001 to assess the impact of additional security measures and the two applauded earlier in August an EC report that stated airport security is essentially a state responsibility. They say it is now even more important that member states help cover escalating security costs.
"If anything we need to repeat that message even more. The burden on airlines since 9/11 has been huge. Now the burden is even more," says AEA. "To cover medium-term and long-term security we'll need some kind of funding from governments," says ACI Europe.
In the US, the Transport Security Administration relaxed most regulations within 72 hours of the crisis and is not limiting the size of carry-on bags, but it has stuck with a new requirement to X-ray all shoes. The bigger picture though is still developing, with a larger review of security practices likely to take up much of the limited congressional agenda left this year.
The US airline industry has spent about $5 billion on security since 9/11, according to the Air Transport Association (ATA), and this price tag will surely go up. The festering issue of passenger lists also remains. Airlines are now required to transmit lists of passengers taking international flights to the USA at least an hour before takeoff, so US authorities can compare the names, dates of birth and passport numbers to a "no fly" watch list. But delays of up to four hours in Homeland Security approval of the lists were frequent during the days after the alert. ■
Source: Airline Business
