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The Aviation Industry


... drafting and implementation of air traffic rules, and the creation of civil ... 1978 & 1979 Airplane crashes in San Diego and Chicago, along with rash of ... – PowerPoint PPT presentation

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Title: The Aviation Industry

The Aviation Industry
  • A National Security Asset

  • Airports remain at particular risk for security
    breaches such as
  • Damage to airport facilities
  • Aircraft both in flight and on the ground
  • Aircraft as missiles
  • Air to ground missiles
  • Necessary precautions
  • Armor and locks on cockpit doors
  • Electronic structure that prevents transponder
    from being shut off
  • Screening of all airport employees daily
  • Explosive detection equipment at all airports
  • 100 screening of all passengers and cargo

Significant Developments
  • April 1999 DOT reports that investigators were
    able to breach airport security 68 of the time.
  • March 2001 FAA safety audit was deemed so
    problematic that DOT initiates its own
    investigation of the auditing process.
  • April 2002 Private security firm Argenbright was
    fined 1 million for failing to meet security
  • 2002 US government pursues Terrorism Information
    and Prevention System (TIPS) to promote citizen
    tips of suspicious conduct.

Importance of Air Transportation
  • One of the most vital and fastest paced economic
    forces in the global economy.
  • Technology must enable authorities to secure the
    airport environment while not delaying air cargo
    to the point where it is non-competitive with
    goods shipped by other means.
  • The global economy depends on continued and
    uninterrupted service.

  • 1912 Worlds First Commercial Airline
  • Created by Ferdinand von Zeppelin
  • Used Dirigibles to transport more than 34,000
    passengers before WWI.
  • Post-WWI, European governments heavily subsidized
    airlines such as British Airways, Air France, and
    the Royal Dutch Airline, KLM.
  • 1958 First year that U.S. airlines finally
    carried more passengers, as measured by passenger
    miles, than railroads

Development of the Aviation Industry
  • WWI Aviation becomes an industry.
  • U.S. built 17,000 aircraft and trained 10,000
  • After the war, surplus aircraft were converted to
    civilian commercial use.
  • 1925 Air Mail Act authorized the US Postal
    Service to award airmail routes to private
  • 1926 Air Commerce Act provided for the
    certification of aircraft and airmen, the
    drafting and implementation of air traffic rules,
    and the creation of civil airways.
  • 1927 government stopped operation its own airmail
    routes and transferred the business to commercial
    aviation. The government required air carriers
    to provide space for passengers in order to
    reduce the cost of mail transport and thus
    contributed to the airline passenger industry.

  • 1938 Civil Aeronautics Act provided for the
    establishment of the Civilian Aeronautic Board
    (CAB) to set up routes, fares, and safety
    standards. The intent was to encourage the
    development of air transportation.
  • 1978 Airline Deregulation Act permitted air
    carriers to set their own routes. By 1982 they
    were allowed to set fares as well. CAB was
    abolished and FAA was tasked with regulating
  • 1978 1979 Airplane crashes in San Diego and
    Chicago, along with rash of hijackings
    intensified public demand for more strict and
    expanded safety measures.

  • In the U.S.
  • Larger airports are owned by cities, counties,
    states, or public corporations.
  • Smaller airports are privately owned
  • FAA regulates design and operations standards.
  • FAA TSA regulate safety and security
  • Two classifications of civilian airports
  • Air carrier
  • General aviation

Airway Routes
  • Designated air space through which the movement
    of aircraft is controlled.
  • High tech systems of navigational aids guide
  • Two consequences of the rapid expansion of
    general aviation
  • Heavy saturation of air space
  • Overloading of airport capacity

  • 1934 Airmail Act
  • Created the Federal Aviation Commission to make
    recommendations to Congress
  • 1978 Airline Deregulation Act

1938 Civil Aeronautics Act
  • Implemented the FACs recommendations and laid
    out the plan for economic regulations
  • Contained controls that mirrored regulations on
    the railroads and trucking industries
  • Required to obtain certificates of public
  • Required to provide necessary and adequate
  • Routes could not be abandoned without prior
  • Obligated to charge just and reasonable rates
  • Provide safe and adequate service
  • Rates had to be published for public inspection
  • Changes required a 30 day notice
  • Gave regulatory agencies the power to investigate
    unfair and deceptive practices
  • Controlled the consolidations and mergers

1978 Airline Deregulation Act
  • Purpose was to encourage an air transportation
    system that placed primary reliance upon
    competitive market forces as the basic
    determinant of commercial airline operations
  • Allowed wide discretion in the setting of fares
  • Dismantled the CAB and distributed its
    responsibilities between DOT, DOJ, and USPS.

Consequences of 9/11
  • Between Dec. 31 2000 and Dec. 31 2001
  • Percent negative change in stock value was
  • American -43
  • United 65.3
  • Northwest - 47.9
  • Delta - 41.7
  • US Airways 84.4
  • Laid off 80,000 workers and grounded 20 of

Consequences cont.
  • Many passengers are flying at small regional
    airports rather than larger international ones.
  • Larger airports continue to have long security
  • Northwest Airlines lost 262 million in the first
    half of 2002
  • Also in 2002, US Airways filed for bankruptcy,
    United Airlines lobbied for government support,
    most airlines made job cuts.

Consequences, cont.
  • Revenue declined for all major airlines during
    the first half of 2002
  • United Airlines -22
  • U.S. Airways 24
  • American Airlines 16
  • From an equipment perspective, each of the four
    airplanes was insured for 2 billion 50 million
    for the airframe and the remaining amount for
    damage and liability.

Emergency Funding
  • Air Transportation Safety and System
    Stabilization Act (ATSSA)
  • Authorized 15 billion in expenditures
  • Gave the airlines 5 billion in immediate cash
    assistance and 10 billion in loan guarantees.
  • Contains a provision that limits the salaries of
    airline executives. Any airline that accepted
    the bailout money is prohibited from raising the
    salaries of its executives that make over
    300,000 per year for a specific period of time.
  • Contains a provision of an additional 3 billion
    in support of enhanced security upgrades

Protecting Public Air Transportation
  • Larger airports present an enticing target for
    several reasons
  • They are typically crowded every day
  • Airlines move on a schedule in predictable
    geographic patterns
  • They are public facilities and resistant to
    target hardening
  • Overall they are an attractive target because of
    the difficulty in providing adequate physical,
    personal, and operational security.

Protecting cont.
  • September 2002 Congress voted to permit pilots
    to carry guns in the cockpit.
  • April 2003 -- Training to arm pilots with .40
    caliber semi-automatic handguns began.
  • Fall of 2002 29 people were arrested on federal
    charges of lying or offering false papers to get
    jobs at three Florida airports.
  • May 2003 TSA allocated 2.3 billion to US
    carriers to offset security costs.