Regional Aviation Security Challenges & Opportunities

1. Regional Aviation Security Challenges & Opportunities

2. Checked Bag Screening OVERVIEW • 15 May 07 announcement • 100% (ETD) CBS by 1 Dec 07 • 100% (X-Ray) CBS by 1 Dec 08 • Originally impacted 26 regional airports • Now affects 32 regional airports

4. CBS Equipment X-Ray EDS Machines: 3m to 5.5m in length Weigh around 4 tonnes each!

5. Rationale for CBS • Industry not involved in decision • No threat update to industry • No change in national threat level

6. Rationale for CBS • How does CBS improve aviation security? The use of CBS provides an additional layer of security to the multi-layer security approach used at airports throughout Australia. The introduction of CBS at regional airports allows for screening of baggage that would have previously gone unscreened. Source: http://www.infrastructure.gov.au/transport/security/aviation/cbs_faq.aspx

7. Funding for CBS • $15.4m over 4 years • Only for security capital – not for Opex • Percentage funding • airports with >500,000 pax, no funds • commenced jets ops May 07, no funds • Only for security equipment • No funding for buildings, power, data, etc

8. Funding for CBS • Capital Cost • X-Ray CBS machine cost $0.5m each • 32 airports need 32 to 39 machines ($16m to $19m) • Baggage handling average costs $200k ($6.4m) • Explosive Trace Detection $60k each ($1.9m) • Total is between $24 & $28m • Building works range $400k to $3m per site (say extra $15m) • Potential shortfall is $24m to $28m • Non redundancy at some major regional airports, due to airline pressure

9. Implementation • Enough Time? • 3 vendors of X-Ray machines • 30 to 37 machines needed now • 3 months lead time for machines • 19 weeks to go • Technical Issues • Power • Air-conditioning • Terminal works / modifications

10. Regulatory Matters

11. Case Studies • Port Macquarie Airport • Mount Isa Airport

12. Port Macquarie Airport

13. Financial Cost of CBS • Case Study 1 - Port Macquarie Airport • Population - 65,000 • 120,000 pax per annum • 1 x Jet service per day • Remainder not screened - no cost recovery • Estimated $19 per passenger CBS cost • What happens if jet service cancelled?

14. Mount Isa Airport

15. Financial Cost of CBS • Case Study 2 – Mount Isa Airport • Population - 25,000 • 160,000 pax per annum • 1~2 jet flights a day (2 flights on Mon, Tue, Thu & Fri) • Currently $14 per passenger for screening – 100% X-Ray CBS will add more cost • What happens if jet becomes turboprop?

16. Turboprop vs. Jet Operations

17. Competitive Neutrality? • Competitive Advantage / Disadvantage • Rockhampton vs. Gladstone / Emerald • Existing major regionals have cost advantage • Difficult for smaller regional airports to compete • Sunshine Coast vs. Brisbane • Brisbane has 7m outbound passengers • Sunshine coast has 400k outbound pax • Both have same screening requirements

18. Solutions • Glasgow attack did not target: • The airport owners / operators • The local community • Attack was aimed at: • National level • International audience • The national aviation infrastructure

19. Solutions • Potential Models: • Universal Service Obligation • National Aviation Security Provider e.g. NZ Avsec / US TSA

20. Solutions • Universal Service Obligation • National price for screening (say $4 per pax) • Airports >$4 receive rebate • Airports <$4 no rebate • Recognises that aviation security involves a broad range of stakeholders that link into an essential national transport network.

21. Solutions • NZ AVSEC / US TSA Model • Potential Benefits: • Consistent security process & outcome • Standardised equipment & training • Improved recruitment & retention of staff • Aviation safety services use this model: • ATC, ARFF, Met • Government does some aviation security • AFP, Customs, AusCheck

22. Summary • National aviation infrastructure • Current security regime not perfect • Disproportionate burden on regional communities • Inhibitor to regional development • Surely we can find a better model?

23. Summary “Remote and regional communities, basic services such as public transport and delivery of fresh food, medical supplies, mail, educational materials, and urgent supplies rely on the use of airport infrastructure.” “Airports gain further importance as entry gates to regions for business and industries that support and encourage ongoing regional and economic development.” Source: House of Representatives Standing Committee on Transport and Regional Services report “Regional Aviation and Island Transport Services: Making Ends Meet”