Airline Security Creates a Market

John Robb notes that contemporary airport security has produced a market demand that has already been filled:

Fractional jet ownership programs have zoomed, since these programs suffer none of the security delays and hassles mass transit endures. A great example is Warren Buffet's NetJets, which has a 50% market-share in the fractional jet industry. It has already expanded to 600 aircraft (equal in size to the world's second largest airline, albeit with much smaller jets) and sports global coverage.

JOURNAL: Parallel Security Systems John Robb, Global Guerrillas, Sunday, September 10, 2006

That's good, right? The market responds to a market demand?

Well, good for some people, but probably not for you:

This trend is something that will continue as the hourglass demand pattern (where demand is split between super-discount products/retail and a price insensitive high-end) we see in an increasing number of markets becomes the norm in security as well. Rest easy, our business and political elite will not be needlessly inconvenienced (given these market dynamics, it is likely that a better solution achieved through deep system redesign, that would alleviate many of the current problems, will never emerge).

One could also argue that much of the better solution has already been achieved:since better cockpit doors were installed several years ago, and since air travellers know that suicide terrorists may want to crash airplanes into buildings, that particular scenario is very unlikely to happen again.

A bomb on a plane can happen. Meanwhile, 8,000 people a day die of AIDS, several thousand a day die of traffic accidents (about 119 per day in the U.S.),and you're actually more likely to drown in a swimming pool than to be killed in an air accident, according to a handy table from the Pipeline and Hazardous Materials Safety Administration. That's true even if you figure in 9/11 by adding another 3,000 deaths and averaging that over 5 years. One has to wonder if all the billions being spent on security are being spent with appropriate priorities.

The current situation does provide Warren Buffet more money which he can use to attempt to cure AIDS. However, one would think governments could address that problem more directly if they wanted to. Meanwhile, air passenger support for security theater is reinforcing a bimodal market in which the average passenger continues to experience most of the inconvenience and most of the risk, while the other, smaller, lump of passengers gets increasing convenience and decreasing risk.

Is this good risk management for the average air passenger?

-jsq