U.S. Airport Perimeter Security Market in Decline

U.S. airport perimeter manufacturers — makers of fences, gates, sensors and cameras — will likely face a steep drop in demand over the next several years, one report found.

In 2012, the Federal Aviation Administration awarded airports $58 million in grants to improve safety, but a decline is expected through 2017, said John Hernandez, an aerospace defense senior industry analyst at Frost & Sullivan, a Mountain View, Calif.-based market consulting firm.

Demand for airport perimeter systems and barriers skyrocketed after 9/11, Hernandez said. Between 2001 and 2011, they garnered nearly $650 million. But funding is expected to taper off as demand weakens, Hernandez said.

“You will see some stagnation and a decline [in the market],” said Hernandez. “It will never go up to the point it went up to after 9/11.”

Hernandez does not foresee any major airports being built soon, and most work needed at existing airports will be limited to small repairs or refurbishing. Contracts to repair most perimeter control measures will be limited to local vendors.

In 2012, nearly $69 million was invested in airport perimeter-security measures. By 2017, that number will drop to an estimated $47.5 million per year, the study found.

While the outlook for the fencing-and-gate side of the market appears grim, the security enhancement sector — which includes cameras and sensors — looks rosier, he said.

Because of inevitable human error and vulnerabilities within the technology, even the most sophisticated systems may not catch everything, Hernandez said.

“You can’t have guys vigilant 24 hours a day,” he said.

He pointed to a major 2012 airport-perimeter security breach in which a distressed Jet Skier swam three miles from his disabled watercraft in Jamaica Bay and came ashore in front of John F. Kennedy International Airport in New York City. He then climbed a fence and crossed two runways all without the $100 million perimeter intrusion detection system spotting him. He was arrested after flagging down an airport worker.

Hernandez hypothesized that the man may have been wearing a wet suit, which could have masked his heat signature, thus throwing off the expensive system.

Robots may be one way to better detect intruders, Hernandez said. The use of unmanned aerial vehicles and unmanned ground vehicles to patrol the perimeter and identify threats, or at least sense that something is amiss, would be invaluable. UAVs and UGVs don’t get tired and keep going 24 hours a day. But getting airports to pay for this technology is difficult, he said.

“Most airports … would rather redo their tarps [and] their terminals, rather than throw money toward perimeter security,” Hernandez said.

But drops in perimeter-security investments won’t result in less-secure airports, Hernandez said.

Many airports have not only a level of secure fencing and other perimeter-control measures, but also agreements with local police — or even their own security people, depending on the size of the facility — which adds an extra layer of safety, he said.

Furthermore, infiltrating an airfield is likely less attractive to potential terrorists, he said.

“Airport security is fine right now,” said Hernandez, and terrorists will not get the same “bang for their buck” by striking an airfield as they would hijacking an aircraft.

Part of the reason for the declining security spending is that there has never been a breach of airport perimeters that resulted in tragedy, he said.

“You haven’t seen that, and that’s a good thing,” Hernandez said.

While many perimeter-security companies won’t be snagging domestic orders, prospects overseas look better, Hernandez said.

European countries, such as the United Kingdom, invest more heavily in perimeter security because the threat is higher there, he said. Many U.S. perimeter-security companies already do much of their business with international companies, which will buffer many of them from reduced domestic demand.

FLIR Systems, an Oregon-based manufacturer of thermal imaging products, sees a healthy market ahead.

FLIR offers ground surveillance radar, high-resolution thermal imaging, day imaging and other measures for its airport perimeter network. It has security installations at a variety of airports domestically and internationally, including Houston International Airport, Greater Orlando Airport and airports in Australia, Canada and the Netherlands, to name a few, said Andrew Saxton, director of airport security at FLIR.

“Our goal is to give security teams complete situational awareness while using as few people as possible,” Saxton said.

Because of recent high-profile events, such as the Jet Skier at JFK, Saxton believes airports will continue to invest in perimeter security.

“Airports have to react to public events,” he said.

While there may not be a history of terrorist attacks affiliated with airport perimeter breaches, there have been a number of incidents resulting in major economic loss. Saxton pointed to the recent heist in February at Brussels Airport in Belgium. Armed thieves dressed as guards were able to penetrate the airport’s perimeter fence and get away with an estimated $50 million worth of diamonds.

Events such as these will keep the airport perimeter-security market robust, he said.

Speaking at a 2011 House committee on oversight and government reform hearing, Rafi Ron, president of New Age Security Solutions, a global security consulting firm based in Virginia, and former director of security at Tel Aviv-Ben Gurion International Airport in Israel, said that one major problem with airport perimeter security in America is a lack of uniformity.

“Most of our airports today are still not protected by an operating perimeter intrusion detecting system. In other terms, we don’t know when a breach occurs. We get to know that only when it is addressed by somebody or when we end up with a stowaway making his way to the wheel,” said Ron.

Photo Credit: Thinkstock

Topics: Homeland Security, Air Transportation, DHS Budget, RailMass Transit, Procurement