The President today signed the Aviation and Transportation Security Act following weeks of intense lobbying and negotiations on Capitol Hill. The new law makes numerous changes to the administration of aviation security and promises to raise significant issues for carriers and others in the industry.

The highlights of this landmark legislation include:

• The U.S. Department of Transportation will assume responsibility for screening all passengers and baggage at all U.S. airports with commercial service by February 17, 2002, and, as part of that responsibility, will assume existing contracts between air carriers and security companies as soon as possible but no later than February 17. Once the DOT assumes this responsibility, carriers will have no responsibility for administering screening at airports.

• The DOT immediately will begin to hire, train, and deploy all necessary screeners, managers, and law enforcement personnel at airports (thus replacing the contract screening operations with federal employees), and must complete this job within one year at all U.S. airports. But two years after this takeover (i.e., starting at the latest November 19, 2004), any airport may opt to have DOT contract with a private screening company if the DOT agrees that a private force provides an equivalent level of security at that airport. Carriers will have no role in making this choice.

• At some unspecified date in the future, carriers will have to collect a new security fee from passengers to pay for the new federal screeners. The DOT could set the fee as high as $2.50 per enplanement (and it almost certainly will be set at that maximum amount), but the fee cannot exceed $5.00 per passenger per one-way trip. The fee applies to any U.S. enplanement by a U.S. or foreign airline, for both domestic and international travel.

• A new Under Secretary of Transportation for Security, appointed by the President for a five-year term, confirmed by the Senate, and overseen by an inter-agency Transportation Security Oversight Board, will administer all these functions. That person will head a new Transportation Security Administration (TSA) in the DOT.

• The FAA now has the authority to assess overflight fees that are "reasonably related" to the costs of air traffic control, rather than fees "directly related" to these costs. This change weakens the ability of foreign air carriers to further challenge the FAA’s accounting of overflight costs.

The TSA will assume the responsibility for passenger and baggage screening by February 17, 2002, in part by taking over existing security screening contracts from carriers for up to nine months. Hiring criteria for security personnel must be established by December 19, 2001.

The Act requires the TSA to hire, train, and deploy all screeners, managers, and security-related law enforcement personnel at airports within a one-year transition period. These personnel will not be allowed to strike and can be fired for failure to adhere to performance standards set by the Act. They must all be U.S. citizens. It is expected that they will earn substantially more than their current private sector counterparts. The Act gives the Under Secretary traditional law enforcement tools, such as the authority to obtain and execute search warrants, in carrying out passenger and baggage screening.

After the one-year transition period, the Under Secretary is required to certify that every affected airport meets the hiring, training, and operations criteria that, by then, the TSA will have established.¹

Two years following an airport’s certification (i.e., starting at the latest November 19, 2004), an airport may ask the Under Secretary to contract with a private security company to perform passenger and baggage screening. The Under Secretary may only approve such an opt-out by determining that the private screening company would provide a level of security equivalent to that provided by the federal workforce.

Federal security managers and -- at the 100 largest airports -- at least one law enforcement officer will remain, regardless of the public/private control of screeners. Similarly, the new criminal background investigations that the Act requires for federal screeners also must be undertaken for private screeners. Moreover, those private screening companies that are used must be "owned and controlled" by U.S. citizens, a citizenship test that substantially limits the amount of non-U.S. direct investment permitted in such companies.

The TSA will assume responsibility for existing drug and alcohol testing of screeners (again, without respect to whether they are private or federal personnel), but the FAA will retain its authority for drug and alcohol-testing of carrier employees currently subject to such tests.

The Act authorizes $1.5 billion in the 2002 and 2003 fiscal years to help airport operators pay for new security requirements imposed following the September 11 attacks, but as yet there is no legislation actually appropriating that amount.

The Act does not require screeners to make a 100% bag-match on passenger flights, although recent hearings on Capitol Hill demonstrate that some legislators would like to see this happen.

The Act does encourage the immediate use of explosive detection systems (EDS). In the words of the Conference Committee Report, by January 11, 2001, any baggage that does not go through EDS "will be required to go through some form of manual or other comparable screening system . . . and periodic reports [will be] issued to provide an understanding of the progress made on these efforts." It is understood that x-ray screening and manual searches meet this requirement, at least for the present.

The Act, however, does direct the Under Secretary to ensure that by December 31, 2002, airports have sufficient EDSs in place to screen all checked baggage. (Whether the Under Secretary and the industry are able to meet this deadline is a matter of significant doubt.) Lastly, although Congress expressed its opinion that the FAA should continue to limit passengers to one carry-on bag per passenger (not including backpacks), the Act does not actually impose this restriction on carriers.

As for all-cargo operations, the Act directs that "as soon as practicable," a system must be implemented to inspect all cargo to be transported on all-cargo flights.

The Act imposes two new fees that all carriers, U.S. and foreign, must remit.

First, the new Under Secretary will impose a uniform passenger tax on each U.S. enplanement for all domestic and international passengers. The fee cannot exceed $2.50 per enplanement and $5.00 per one-way trip. The effective date will be stated in terms of the date of sale and not the date of travel, and thus carriers will not have to collect it retroactively from passengers.

Second, to the extent that this fee will be insufficient to meet the costs of providing screening, the Under Secretary may impose a direct fee on U.S. and foreign carriers to cover the difference. This additional fee is expected to be about $1 per enplaning passenger, although the Under Secretary may impose this fee as a lump sum payment by each carrier and not a per-passenger levy.

The total amount that a carrier remits in this latter fee in each of fiscal years 2002-04 may not exceed the amount paid by that carrier in 2000 "for screening passengers and property, as determined by the Under Secretary." The total per-carrier amount for fiscal year 2005 and beyond will be determined by the Under Secretary on the basis of market share "or any other appropriate measure." The Under Secretary must publish notice of these fees by January 18, 2002 "or as soon as possible thereafter." The notice will establish the effective date of both fees.

Neither of these fees, however, will be subject to normal notice-and-comment procedures, nor is any judicial review available to contest them -- characteristic features of the Act.

The Act includes a variety of additional provisions affecting carriers’ operations:

• The Act authorizes U.S. air carrier pilots on either domestic or international flights to carry firearms in the cockpit if the Under Secretary approves, the carrier approves, and the pilot has received proper training to use the weapon. Similarly, the Act also authorizes U.S. air carrier flight crewmembers on either domestic or international flights to carry an approved "less-than-lethal weapon," e.g., a stun gun, if the Secretary approves and the pilot receives appropriate training.

• U.S. and foreign air carriers are now required to use the Air Passenger Information System to provide a crew and passenger manifest and related information to the U.S. Customs Service for each international flight arriving in the U.S., before the flight arrives.

• U.S. air carriers are required to provide seating for federal air marshals on any flight "determined by the Secretary to present high security risks", without regard to seat availability. U.S. carriers are also required to provide, on a space-available basis, free seats to off-duty marshals returning home from a security mission.

• The Act directs the FAA to issue "guidance" on how to handle in-flight threats, and all U.S. carriers will then use that guidance to develop a comprehensive training program. The FAA will approve a carrier's program, and then the carrier will have to train all cabin and flight crew in accordance with that program. All of this must be completed by September 15, 2002.

• The Act exempts U.S. and foreign air carriers and their employees, passengers, and crews from civil liability for reporting suspicious activities relevant to safety or terrorism, a protection that did not exist prior to enactment.

Several developments (beyond the steps required to meet the various deadlines that the Act establishes) can be expected in the next few months as a result of the Act. The FAA soon will issue an order formalizing and building upon many of the changes to cockpit doors and access to the cockpit that U.S. carriers implemented in the immediate aftermath of September 11.

The FAA also will study (1) whether to require the installation of video monitors in the cabin; (2) how best to ensure continuous operation of the transponder during an emergency; and (3) whether switches should be installed in the cabin to allow cabin crew to alert pilots of a security breach in the cockpit. (Carriers should expect to work with their FAA Principal Security Inspectors – whose authority the Act does not alter in this respect – to implement all these changes.)

Further, a non-binding resolution in the Act encourages the DOT to implement section 202 of the Air Transportation Safety and System Stabilization Act (see our Aviation Advisor Special Edition Number 2 dated October 5, 2001) in order to make war risk insurance directly available to vendors, agents, and subcontractors of U.S. carriers, for their domestic operations.

Legislation refining and adding to the ATSA is not out of the question in 2002. The Act defers some changes for further study and suggests (rather than mandates) still others. Bills may be introduced in an effort to clarify provisions of the Act related to the federal take-over of screening functions described above. If Congress is unhappy with how the system reacts to this law, another major security bill(s) is certain to be introduced. Moreover, as the Under Secretary implements the Act, there are bound to be hiccups – and more than a little chaos. With those hiccups will come significant policy and legal issues.

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    ¹In addition, following the one-year transition period, five airports – one in each "risk category" – may participate in a pilot program in which DOT would use private contractors rather than federal employees to screen passengers and baggage. It is open to question whether any airports will elect to be in the pilot program, however.  [Return to text]