Ups vs Fed Ex

Topics: Airport security, Transportation Security Administration, Airline Pages: 3 (809 words) Published: June 24, 2013
We examine the impact of post-9/11 airport security measures on air travel in the U.S. Using _ve years of data on passenger volume, we evaluate the e_ects of the implementation of baggage screening and the federalization of passenger screening on the demand for air travel. These two congressionally mandated measures are the most visible changes in airport security following the 9/11 attacks. Exploiting the phased introduction of security measures across air- ports, we _nd that baggage screening reduced passenger volume by about six percent on all ights, and by about nine percent on ights departing from the nation's _fty busiest airports. In contrast, federalizing passenger screening had little e_ect on passenger volume. We provide evidence that the reduction in demand was an unintended consequence of baggage screening and not the result of contemporaneous price changes, airport-speci_c shocks, schedule changes, or other factors. This decline in air travel had a substantial cost. \Back-of-the- envelope" calculations indicate that the airline industry lost about $1.1 billion, eleven percent of the loss attributed to 9/11 directly.

In response to the terrorist attacks of September 11, 2001, the federal government enacted new legislation to increase air passenger safety. On November 19, 2001, Presi- dent Bush signed into law the Aviation and Transportation Security Act (ATSA). This act established a new Transportation Security Administration (TSA), which consol- idated security efforts inside the Department of Transportation (DOT). In addition, the ATSA mandated several important changes in civil aviation security procedures. The two primary changes in airport security visible to passengers were the federal- ization of passenger security screening at all U.S. commercial airports by November 19, 2002, and the requirement to begin screening all checked baggage by Decem- ber 31, 2002. The ATSA charged the TSA with overseeing security operations and implementing the...
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