An Overview Of The Airport Security Market,

16th APSA International Conference
Airport Security Market Overview

By Julius Yeo - Consultant
2009 © Frost & Sullivan . All Rights Reserved . www.aerospace.frost.com

Table of Content

Introduction

Asia Pacific Market Outlook

Market Drivers

Market Challenges

Market Growth Potential

The Way Forward


Introduction

• Asia Pacific is now an emerging hub for global economical, trade, and tourism activities.
The attraction by Asia Pacific countries has encouraged the growth of air travel in and out,
and within the Asia Pacific region.

• Many airlines have expanded their routes (prior to economic recession circa 2008/2009),
and several new airlines were established to over diverse flight routes in the region. As a
result, many airports have been built, and older ones refurbished to cater for the rising air
travel in the region.

• As airports in the region flourished and grew, the question of how safe are the airports in
the region began to surface.

• Are the airports in the region well equipped to handle security threats? What is lacking?
What are the challenges to airport security in the region? What can be done to further
secure the airports in the region? Finally, what are the opportunities for stakeholders in
this market?


Introduction

Economic
Attraction

Economic
Attraction
Trading
Attraction

Trading
Attraction

The fast growing economy of Asia Pacific is drawing attention from terrorists from all over
the world. The influx in air travel in and out, and within Asia Pacific has also increased other
risks such as health, illegal immigration, etc.


Increasing air passengers…

Homeland Security Market Assessment: Homeland Security Market Assessment: Passenger Traffics
Passenger Traffics (Asia Pacific), 2005-2014 (Asia Pacific), 2005-2014

Passengers Growth Rate 2,500.0 Beijing Olympics 2008 18.0
Year (Million) (%)
16.0
2005 926.3 7.9
2,000.0 14.0
2006 1,017.9 9.9
Passengers (Million)

12.0

Growth Rate (%)
2007 1,142.4 12.2
1,500.0
2008 1,316.6 15.3 10.0
2009 1,460.6 10.9 8.0
1,000.0
2010 1,616.9 10.7
6.0
2011 1,770.7 9.5
500.0 4.0
2012 1,936.1 9.3
2.0
2013 2,128.3 9.9

2014 2,346.9 10.3 0.0 0.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: Frost & Sullivan Source: Frost & Sullivan


Increasing cargo movements…

Homeland Security Market Assessment: Homeland Security Market Assessment: Cargo Traffics
Cargo Traffics (Asia Pacific), 2005-2014 (Asia Pacific), 2005-2014

Cargo (Thousand Growth Rate 90,000.00 10.0
Year Metric Tonnes) (%) Beijing Olympics 2008
80,000.00 9.0
2005 41,833.7 9.5

Cargo (Thousand Metric Tonnes)
70,000.00 8.0
2006 44,543.1 6.5

2007 47,342.0 6.3 7.0
60,000.00

Growth Rate (%)
2008 51,070.6 7.9 6.0
50,000.00
2009 54,476.3 6.7 5.0
40,000.00
2010 58,051.7 6.6 4.0
30,000.00
2011 62,122.7 7.0 3.0
2012 66,511.6 7.1 20,000.00
2.0
2013 71,293.3 7.2 10,000.00 1.0
2014 76,474.6 7.3 0 0.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014


Homeland Security Market Assessment: Airport Expansion
Expenditures (Asia Pacific), 2008-2025
South Korea
Japan
New Zealand Philippines 2.5%
1.4% Indonesia
0.5% 0.2% 1.0%
Australia
Pakistan 12.8%
Vietnam
0.5% 11.3%

China
37.9%
India
Malaysia 30.5%
1.4%

New terminals and runways construction is likely to exceed US$48.9 billion during the
period from 2008 to 2025. Leaders, China and India have plans to develop and construct at
least 84 new airports in an effort to cater for the fast-growing air traffic demands in those
two countries, with combined expected expenditures of over $33.4 billion.

Like the rest of the world, Asia Pacific also faces several issues regarding airport security.
However, the airports in this region are poised to better handle any security threats as the
airports are still within their development stages. Below are several of the main security
issues faced by the airports in this region.

Curbside

Check-in On the tarmac

Retail Outlets
Boarding
& Restaurants

Outsource
Security


Market Drivers
• Terrorist threats

• Health threats

• Establishment of trade relations

• Increasing passenger volume

• Increasing cargo movements

• Increasing aircraft movements
New airlines entry
Increasing movements of LCC
New routes

• New aviation business models
Air charter services
Business aviation centers, etc.
Low Medium High


Market Challenges
• Cost

• Privacy and other legal issues

• Lack of Staff Diligence

• Lack of Training

• Disconcerted efforts

• Faulty/Obsolete Equipments

• Propaganda

Is it really worth it?????

Market Challenges
For too long airport and regulatory authorities have been reactive, rather than proactive.
The security lull amongst Asia Pacific airports may cause lax in ensuring security measures
are up to date to tackle any possible threats – man-made, or non man-made.
Nine illegal workers arrested at Orlando
International Airport
Federal customs and transportation security agents arrested
several contract workers at Orlando International Airport on
Thursday night after discovering that the workers were
illegally in the United States.

The nine workers were employed by subcontractors on a
construction project on Airside 1 at the airport when
Customs and Border Protection and the Transportation
Security Administration conducted a regulatory compliance
inspection. Dr Tony Gherardin, national medical adviser
for The Travel Doctor-TMVC Group, “Our
"[The workers] would have been escorted in by badged view is that air travel does increase your risk
employees, and they would have to go through security of getting an upper respiratory tract
screening," said Carolyn Fennell, an airport spokeswoman. infection."

U.S. Immigration and Customs Enforcement is likely to "But it's not so much on the actual aircraft,
receive custody of the arrested workers, but was not where the air-conditioning is quite potent
involved in Thursday night's operation, said Ivan Ortiz, an ICE and changes the air in the cabin fairly
spokesman. rapidly. The air-conditioning blows fresh air
from above and sucks out the old air along
Airport operations and security staffers will meet with its the floor.“ Gherardin says the real culprits
contractors to remind them of the requirements and their are airports, where the air-conditioning is
responsibilities for complying with rules about illegal not as effective and passengers are often
workers, Fennell said. herded into small spaces.

Source: Orlando Sentinel Source: The Sidney Morning Herald


• Secure and more comprehensive screening procedures, supported by present to latter
day equipments and technologies.

• Verification and checks for employees of retail outlets and restaurants within the airport.
Many employees are allowed to roam freely without proper identification processes.

• Many airports in Asia Pacific rely on the police force to ensure security. This may not be
sufficient as the police are not trained to handle airport security threats or emergencies.

• There is a lack of screening processes for transit flights as passengers and baggage on a
transit flight are not screened again; the current airports expects the previous airport to
have conducted sufficient screening procedures.

• One of he major security risks to threaten Asia Pacific airports are “on the tarmac”
activities. Many airports in Asia Pacific do not provide sufficient security around the
tarmac area. Additionally, many airports still board passengers on the apron area, which
possesses security concerns.


Forecasted Revenues Growth of
Airport Security (Asia Pacific) Revenue Segmentation of Airport Security
US$ 9.96 billion Revenues in 2007 (Asia Pacific)

Others/Integration
14.5%
US$ 6.40 billion Perimeter and
Access Control
12.3%

CAGR: 11.3% Video Surveillance
and Monitoring Security Screening
7.5% 65.7%

2010 2014

Frost & Sullivan has estimated the airport security market revenues to grow at a CAGR of
11.3% from 2010 to 2014, realizing a value worth $9.96 billion by 2014. The increase value
of the year on year growth is largely due to the developments of new airports and also
terminal expansion plans in the region to cater for the increased demands of air travel.


Airport Security Revenue Airport Security Revenue
Market Share (Asia Pacific), 2007 Market Share (Asia Pacific), 2014
Singapore
Malaysia Vietnam 3.5% Philippines Malaysia Vietnam
3.8% 1.5% 1.4% 2.1% 1.6% Singapore
Philippines New Zealand
2.1% Australia Thailand 2.1%
2.2% China
5.8% 3.7% New Zealand
Thailand 28.9% 1.1%
5.3% Taiwan
1.4% China
Australia Indonesia 46.6%
9.4% 3.2%
South Korea
Taiwan
3.2%
3.0%
Indonesia Japan
South Korea India 20.5% India Japan
5.7%
6.2% 7.9% 18.7% 9.1%

In 2007, China leads the market with the share of 28.9%, and is expected to continue to lead
the market in 2014 contributing a share of 46.6%. The tremendous increase in the Chinese
market is largely due to the planned new airports development and new terminal
development worth over US$18.0 billion. India is also expected to increase its market share
to 18.7 percent by 2014, due to the ambitious new airport and terminals development plan.

The Way Forward
Products & Services Strategy

Integration of Multiple/Varying Security Platforms

Efficient and Reduced Time On Security Procedures

Real Time Data Intelligence and Decision
Airport Security
Solutions

Modular and Upgradeable Systems

Training and Simulations


The Way Forward
Competitive Strategy
Key Competitive Strategies

Investment in Research and Development

Strategic Alliances

Supply Chain Efficiencies

Customer Centric Services

4 key factors that will ensure competitiveness in the homeland security market.
• Invest in technology, as the security industries are highly technologically driven due to the
constant evolution of security threats.
• Identify best business partners available in target countries and formulate strategic
alliances to offering security platforms and ensuring systems interoperability.
• Devise efficient supply chain management to ensure fast delivery, responsive after-sales
support, and cover widespread distribution into the market efficiently.
• Located close to customers to respond to requirements timely and efficiently.


The Way Forward
Investment Strategy

Economic Condition Available Infrastructure

Key Investments
Considerations
Global, Regional, and
Skilled Manpower Country-specific
Availability Security Threats
Dynamics

The key factors that need to be looked at include the country’s economic condition,
infrastructure and skilled manpower availability, understanding the evolving security threats
globally, regionally, and country-wise.


An Overview Of The Airport Security Market,

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