52 Full

Vol. 37, No. 1, JanuaryFebruary 2007, pp.
5267
issn0092-2102 eissn1526-551X 07 3701 0052
informs
doi 10.1287/inte.1060.0274
2007 INFORMS
THE FRANZ EDELMAN AWARD
Achievement in Operations Research
Using USCAPs Analytical Models, the Transportation
Security Administration Balances the Impacts of
Aviation Security Policies on Passengers and Airlines
Robert M. Peterson, Raymond H. Bittel, Christopher A. Forgie, William H. Lee
The Boeing Company, PO Box 3707, Seattle, Washington 98124-2207 {robert.m.peterson@boeing.com,
raymond.h.bittel2@boeing.com, christopher.a.forgie@boeing.com, william.h.lee@comcast.net}
John J. Nestor
Transportation Security Administration, 701 S. 12th Street, Arlington, Virginia 22202, john.nestor@dhs.gov
The United States Commercial Aviation Partnership (USCAP), a group of government and industry stakeholders,
combined several operations research methods in an analytical process and model that encompasses the US
commercial aviation industry, including travelers, airlines, airports, airline and airport suppliers, government
agencies, and travel and tourism entities. With input from these stakeholders, the model, combining system
dynamics and econometrics, evaluates the effects of proposed security measures over 25 years. It enables all
stakeholders to share a common understanding of these effects and helps government decision makers to
improve security without undue and unforeseen operational and economic impact. The model uses linear and
nonlinear programming, single and multivariate regression, system dynamics, econometrics, and Monte Carlo
simulation. Since 2004, the government has considered the model results in determining policies for screening
and credentialing airport employees, screening passengers and cargo, determining security stafng levels, and
charging security fees. All participating stakeholders reviewed each analysis for acceptability. Based on the
models success, they envision extending its use to include nonsecurity policy issues.
September 11, 2001, the day commercial airplanes became weapons of mass destruction, is personal to many
of us and has changed our perspectives on our lives and our world. The ofcial death toll in the attacks was
2,986, including the airline passengers and airline crew members, workers and visitors in the World Trade Center
and the Pentagon, the police and reghters, and the 19 hijackers. The US Federal Aviation Administration
(FAA) halted all ight operations at the nations airports for the rst time in US history and swiftly grounded
the approximately 5,000 commercial aircraft that were in ight. Only military aircraft were ying over the US
for the rest of that and the next few days. The events of that day left the airline industry and its supporting
companies nancially devastated.
Key words: transportation: safety; government: regulations.
The Economic Impact
According to the General Accounting Ofces (GAOs)
Review of studies of the economic impact of the
September 11, 2001 terrorist attacks on the World
Trade Center (2002), the Milken Institute estimated
the losses from the terrorist attack as $191 billion for
all 315 US metropolitan areas. The New York State
Senates nance committee estimated that terrorism
caused losses of $639 billion to the US through 2003.
The New York State Assemblys ways and means
committee estimated that the September 11 attack
caused about 40 percent of the slowdown in the 2001
gross domestic product (GDP).
Congress created the Transportation Security Ad-
ministration (TSA) in the aftermath of September 11,
2001, with the Aviation and Transportation Security
52
Peterson, Bittel, Forgie, Lee, and Nestor: USCAPs Analytical Models
Interfaces 37(1), pp. 5267, 2007 INFORMS 53
Act (ATSA) of November 19, 2001 and made it part
of the Department of Transportation. In March 2003,
the TSA moved to the newly created Department of
Homeland Security (DHS) and was given responsibil-
ity for national transportation security with a focus on
the US commercial aviation system security initiatives
as mandated by both the White House and Congress.
The new procedures, processes, laws, and regula-
tions providedadditional safeguards against terrorism.
Air travelers suffered the unintended consequences of
these safeguards as the queues in front of the secu-
rity checkpoints grew from a few feet to hundreds of
yards and the wait time from minutes to hours. Even
so, some thought the security provisions were inad-
equate, while others thought they were too onerous
for the commercial aviation industry.
Government and industry leaders recognized these
conicts and problems. They had no viable, simple
xes. They recognized that understanding the impact
of mandatory security policies for commercial avia-
tion was an essential component of the public policy
debate. In early 2003, they formed the United States
Commercial Aviation Partnership (USCAP).
In their initial meetings, the stakeholders agreed to
focus on maintaining the vitality of the US commer-
cial aviation industry while ensuring that the federal
security requirements were implemented effectively
and efciently. They dened vitality as safe, secure,
and efcient and implied a balance among the three.
They realized that the most valuable product of mod-
eling would be the creation of an environment that
would foster industry-government dialogue, rather
than an analytical answer.
The stakeholder leaders believed in the benets
of collaboration and the abilities of their technical
professionals. Operations research, engineering, scien-
tic, and economic professionals from Boeing, TSA,
and the industry stakeholder organizations developed
models for the technical working group. This group
used the models to analyze, dene, and predict the
operational and economic effects of air travel secu-
rity options for both passengers and cargo. Using a
25-year horizon, the models analyze the operational
and economic relationships of key elements of the US
commercial aviation system and calculate the cost and
impact values of current or proposed TSA security
policies and protocols for the TSA and for airlines, air-
ports, airport retailers, parking providers, hotels, and
other associated services. The USCAP leaders used
these results in developing assessments of proposed
aviation security policies.
In its report, the 9/11 Commission stated, Hard
choices must be made in allocating limited resources
(National Commission on Terrorist Attacks upon the
United States 2004, p. 395) as the US confronts the
threat of terrorism, in that the economy andthe country
cannot be completely protected against terrorism. The
government must decide where to expend the limited
resources for security to gain the maximum security.
USCAP is a process that supports its activities with
analytical tools. Ron Robinson of Boeing Commer-
cial Airplanes and Rich Hansen of the TSA led the
effort to develop the process and get it accepted by
government and industry stakeholders. Many indus-
try experts worked on developing the USCAP model.
The models chief architect, Bob Peterson, has 35 years
experience in commercial aviation marketing. He
applied his extensive industry knowledge and model-
ing skills in developing the model structure, dened
much of the programming structure, and led the
model development activity which drew on the exper-
tise of subject matter experts (SMEs) from the stake-
holders. Bill Lee, currently with WHL Consulting and
formerly with Boeing Commercial Airplanes, has over
30 years of industry forecasting and marketing experi-
ence. He was the lead programmer and data modeler.
Ray Bittel of Boeing focused on evaluating the cost-
ing, stafng, and productivity capability of aviation
security equipment. Chris Forgie of Boeing provided
detailed modeling and computing expertise.
The TSAs Bruce McDaniel, Greg Moxness, and
John Nestor provided modeling expertise, data knowl-
edge, and government perspective during the tools
development and ongoing guidance and coordination
of TSAs perspective in accessing proposed aviation
security actions. The team also relied on the active
participation of the Airports Council International,
the Air Transport Association, and the Department of
Transportation.
54 Interfaces 37(1), pp. 5267, 2007 INFORMS
Cost
Time
Fear
Hassle
GDP
Geopolitical
tension
TSA
Government
suppliers
Freight
Mail
Passenger
Airport
suppliers
Airline
suppliers
Customers
Airlines Airports
Government
Dept. of
Transportation
Travel
industry
GDS
State and
local
Cargo
Small
Medium
O-D
Large
O-D
Passenger
Medium
connect
Large
connect
Dept. of
Homeland
Security
Critical
factors
Figure 1: The USCAP model divides the US commercial aviation industry into four major sectors: government,
customers, airlines, and airports. Each sector is segmented into critical subsectors. For each sector and sub-
sector, the model develops operational and nancial reports that capture high-impact aviation-security statistics
on a quarterly and annual basis for its 25-year planning period. The model tracks trends so that all stakeholders
understand the impact of security proposals.
Tool Set Architecture
Recognizing USCAPs ongoing need for analytical
exibility, we focused on designing an adaptable sys-
tem that would satisfy the following requirements:
It had to compare alternative policies or security
protocols.
It had to identify the effects of security policies
or protocols.
It had to include all the entities in the US com-
mercial aviation industry.
It had to respond quickly to what-if questions.
It had to be extendible to meet new, currently
unforeseen security proposals.
It required a lean analysis team because some of
the stakeholders were in a dire nancial position (for
example, the airlines).
It had to be based on the knowledge and partic-
ipation of SMEs.
It had to be realistic and pragmatic.
Because the tool is intended to set policy direction
and not implementing budget, we used simple ana-
lytical tools rst and added complexities only when
they would signicantly improve the results.
We used operations research techniques in the ana-
lytical process and in the core model. The process
that USCAP goes through is as important as the
model itself. The model does not expand operations
research techniques. It uses tested and proven oper-
ations research techniques in a holistic approach. At
the core of the USCAP analytical process is an over-
arching system dynamics model describing the com-
mercial aviation system and providing a 25-year look
into the future. We developed multiple task-specic
tools to support the analytical process and to provide
input to the system model.
Model Architecture
The primary model sectors are customers, airlines,
and airports (Figure 1). Customers are dened as
passengers, freight, and mail. The airline sector is cap-
tured in two prime subsectors that serve the passen-
gers and air freight, the passenger airlines, and the
cargo airlines. The model tracked 430 commercial avi-
ation airports in ve categories to enable us to cap-
ture the differing costs and capabilities that result
from airport size and complexity. The government
sector includes the federal and local governments.
Within the federal government, the Departments of
Transportation and Homeland Security have primary
responsibility for commercial aviation security. They
perform the multiple functions of regulation, taxation,
capital support, and of course, security.
The airlines and airports include specic supplier
subsectors. These suppliers include caterers, fuel sup-
pliers, airplane and engine manufacturers, car rental
companies, and construction companies. Last, we in-
clude a travel subsector that includes travel and
tourism industries, such as hotels, restaurants, theme
parks, and global travel distribution systems (GDS),
for example, Expedia. Each sector is affected by typi-
cal geopolitical factors and economic drivers, includ-
ing gross domestic product (GDP), costs, and yields.
When we apply the model to trafc growth, we
expand the economic equation to include the impact
of travel-security measures, which travelers perceive
as causing fear and hassle. Fear affects demand
because of air travelers dramatically increased con-
cerns about personal safety. Hassle affects demand
because of the frustration associated with changing
security measures. As fear or hassle increases, some
passengers will cancel their travel plans or seek alter-
Suppliers
Rates
Suppliers
Government
Airports
Passenger demand
Airlines
Rates
$
Demand
Fares
Security
processing
times
Security
rules
$
Rates
Fees
and
taxes
Fees
and
taxes
PFCs
Fee and tax rates,
security rules
Operations
and fees
Security
rules
trust
fund money
and
Figure 2: In this diagram showing the economic data and information ows between the USCAP model sectors
and subsectors, the primary dynamic loop starts with passenger demand. The airlines adopt operations-based
costs, fares, and regulatory requirements. As the airlines change operations, the airports adapt their fee struc-
tures to maintain the nancial targets mandated by their nonprot status. The government sector completes the
cycle, collecting fees and establishing regulations.
ative modes of travel (for example, traveling by car
for short trips).
The system-dynamics model has many feedback
loops. The primary loop starts with the passenger
demand equation, which uses passenger enplane-
ments as the primary forecasting variable because the
passenger screening load is the most important factor
in estimating passenger security costs (Figure 2).
The airline industry is highly competitive with very
low barriers to entry. Competitive forces continuously
push fares lower, while the industry can increase
fares only in times of constrained capacity. Classi-
cal microeconomic pricing theory does not apply,
and the model reects market conditions effects on
fare adjustments, airline operations, and future eet
plans.
Airline operations and passenger enplanements
drive airport operations and nances. In the United
States, virtually all commercial service airports are
public, nonprot entities. For the airport sector, the
model included adjustments to tenant rates and pro-
vided for future capital investment. The model fed
fees associated with airlines airport operations to the
airport sectors cost structure, and it fed adjusted rates
for other airport tenants (restaurants, retailers, and car
rental rms) to the calculation in the airport suppliers
section.
The US government regulates airlines and airports,
operates air trafc control (ATC) facilities, provides
security, and collects taxes and fees from passengers,
cargo shippers, and airlines. The model fed back data
on ATC and passenger screening delays into the time
component of the demand equation. The model cap-
tures and tracks capital funds allocated from the Avi-
ation Trust Fund, which is funded by air travel ticket
taxes. The capital funds are allocated to airports and
the FAA to pay for future capacity expansion.
Passenger Demand Equation
Although three of the USCAP stakeholders forecast
annual US passenger air travel independently, we
built yet another passenger-forecasting model for the
USCAP model to meet its requirements. Most air-
travel forecasting models focus on long-term trends,
with horizons of ve to 20 years. These models are
not useful for making near-term, tactical decisions.
The model calculates direct and consequential effects
of security policies. Direct effects are the immediate
effects of security policies. Consequential effects are
the effects of actions industry entities take as a result
of the original policy.
To assess the direct and consequential effects of
security policies, the USCAP model must predict the
near-term effects of security measures. Further, as all
of the sectors respond to the new security measures by
changing procedures, plans, employment, rates, and
fees, the USCAP model must predict those changes
and effects on air travel. As the USCAP model is
dynamic, it executes the forecasting equation for each
time period and bases its forecast of the changing
impacts over time, including the most recent time
period. The forecasting model must deal with fear
and hassle because they were the major causes of the
25 percent drop in air travel following 9/11. Because
9/11 was a one-time event and we have no metrics for
fear and hassle, most forecasting organizations made
no attempt to quantify their effects. For the USCAP
model, we focused precisely on the effects of such
an event because the model would inuence policy
actions that could affect travelers fear of air travel and
their perception of the hassle associated with it.
The Demand Equation Requirements
Because stakeholders differ in their concerns, the
model had to include a range of factors and have a
strong what-if capability. For the core passenger-de-
mand equation, the USCAP members identied ve
parameters as causal and signicant: the underlying
economy (represented by US GDP), ticket price, travel
time, fear, and hassle.
The Demand Equation
For any given time period (quarter),
pax = (exp((intercept) +a
G
ln(GDP)
+a
P
ln (price) +a
T
ln(trip time)))
(1 fear factor) (1 hassle factor)
(1 operations factor), where
pax =passenger enplanements,
GDP =US gross domestic product,
price = average total fare for a 1,000 mile trip, in-
cluding taxes and surcharges (e.g., $132.50),
trip time =total door-to-door planned trip time (for
example, 310 minutes),
fear factor = expected reduction in enplanements
due to an event causing fear (e.g., initially 25.5 per-
cent, declining with an exponential half-life decay
prole),
hassle factor =expected reduction in enplanements
due to an event causing hassle (e.g., initially 2.0 per-
cent, declining with an exponential half-life decay
prole),
operations factor = expected reduction in enplane-
ments due to reduced operations from a fear-inspiring
or other event (e.g., 13.5 percent response to 9/11),
a
G
=elasticity coefcient for GDP (e.g., 0.973),
a
P
=elasticity coefcient for price (e.g., 0.625),
a
T
=elasticity coefcient for trip time (e.g., 0.54).
We used the exp(. . .) form of the equation through-
out the model to facilitate the use of linear interpo-
lation between xed values of variables. Trip time is
door to door and includes the time a passenger allows
for security screening to be condent of arriving at the
airport gate before ight cut-off time. Although the
average security-processing time in the model aver-
ages about 10 minutes (for baseline cases), condence-
security-processing time averages about 25 minutes.
The average security-processing time is the mathemat-
ical mean of the reported time for passengers to pro-
ceed through security. The condence-security time is
the amount of time the average passenger includes
in his planning to ensure that he will get through
security. That is, he will typically add a 15 minute
uncertainty buffer to his planned arrival time at the
departure airport just to ensure that he gets through
security and makes his ight.
We dene hassle as the frustration passengers ex-
perience as they encounter cumbersome and ever-
changing security procedures, and we input hassle as
the resulting reduction in enplanements. We dened
fear as the potential harm passengers perceive as
resulting from a terrorist event. In the model, we
input fear as the reduction in enplanements caused
by an increase in fear. We assume that the effects of
hassle and fear dissipate over time following an expo-
nential half-life decay prole.
In the USCAP model, we explicitly included the
effects of taxes and surcharges by using airline rev-
enue plus taxes and surcharges per enplaned passen-
ger as the price measure. We normalize fares at a xed
passenger-trip distance (1,000 miles) and explicitly
modeled the distance of the passenger journey, which
has been increasing over the last 60 years. While the
forecast is nonseasonal, we handled seasonality as a
xed factor multiplier of nonseasonal values.
The Delphi Method for Hassle Values
To develop a useful and representative set of values
for the hassle factor, the USCAP team used a modied
Delphi approach (Mosenthal et al. 2000). Subject mat-
ter experts in the stakeholder group identied has-
sle events and developed related values for them by
consensus. Using these relative values in the demand
equation regression, we determined a set of factors
representing the hassle events impact on enplane-
ments (Table 1). The hassle effect dissipates quickly,
with a half life of one quarter.
These event magnitudes, combined with a one quar-
ter half-life, create a hassle multiplier prole for the
regression model (Figure 3). We reduced the magni-
tude of each events impact to reect when it occurred
during the quarter.
Derived
Implementation Delphi enplanement
Hassle events date magnitude reduction (%)
Laptop removal and inspection Apr-95 2.98 0.8
Post September 11 changes to Dec-01 7.92 2.2
screening process
Checkpoints staffed by TSA Nov-02 4.69 1.3
100% passenger check for Dec-02 3.08 0.8
explosives
Shoe removal at screening May-03 5.00 1.4
Pat downs added to secondary Sept-04 6.85 1.9
screening
Coat and sweater removal Oct-04 3.46 0.9
Table 1: Subject matter experts evaluated the different hassle events and
rated them in intensity on an arbitrary 110 scale. We used these scores
in the demand regression to assess their impact on demand and statistical
signicance. We show the identied hassle events, their initiation dates,
magnitude, and the resulting impact on trafc.
Estimating the Effects of Fear
We identied and assessed the historic events that
may have made the traveling public fearful, includ-
ing Air India 747 (1985, a bomb killed 329 in an
in-ight explosion), Lockerbie (1988, a Pan American
747 blown up over Scotland by Middle Eastern terror-
ists), Bojinka (1995, an Al Qaeda plot to blow up 11
airliners), TWA 800 (1996, a 747 destroyed by explo-
sion over Long Island), the shoe bomber (2001, Robert
Reid carried a bomb in the heels of his shoes aboard
an American Airlines ight from Paris to Miami),
the Chechnya bombers (2004, women carried bombs
aboard two Russian passenger aircraft), as well as
9/11. Except for 9/11, these events had no statistically
measurable effect on enplanements. Therefore, we
included only one fear event in the demand equation,
9/11. Our decision conforms to the general observa-
tions of social scientists and anthropologists that dis-
ruptive events must occur in clumps to affect peoples
decision making. People tend to view single events
as random, but four airplane hijackings on one day
and their use as bombs had memorable impact that
changed peoples perceptions and behavior.
We decomposed the 9/11 event into a fear event
and an operations impact (airlines ceased ying com-
pletely for three days and operated a reduced number
of ights for the rest of the month). To quantify the
fear event, we used the regression model to nd an
initial value and dissipation prole that represented
0.950
0.960
0.970
0.980
0.990
1.000
1.010
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
F
a
c
t
o
r
Figure 3: We show the net impact of hassle on quarterly airline trafc. Since 2001, the ongoing changes in
security policies have continued to inuence trafc negatively.
a best t (highest
2
) of the data. We implemented
an exponential half-life dissipation prole. An initial
value for the reduction in enplanements of 25.7 per-
cent, with a 10.9 quarter half-life, provided the best
t. (A small group of experts from within Boeings
marketing organization, including this models chief
architect, had predicted a 25 percent decline in trafc
on the afternoon of 9/11.) These gures imply that, as
of the rst quarter in 2006, 70 percent of the demand
lost because of the fear caused by 9/11 has returned
and another 30 percent has yet to be recovered. In
the regression modeling, we took into account the
occurrence of 9/11 late in the period (73 days into a
92-day period) and incorporated that factor into the
demand modeling for the third quarter in 2001 (Fig-
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
F
a
c
t
o
r
Figure 4: The events of 9/11 made the traveling public fearful. The initial 25.7 percent decline in air travel
resulting from this fear has abated, but air travel is still affected negatively by about 10 percent.
ure 4). Our regression model provided an operations
factor of a 13.5 percent reduction in enplanements for
the quarter.
The Demand Regression Solver
To fully explore the issues associated with forecasting
air travel demand, we developed a detailed regression
analysis Solver tool with special capabilities. Because
the stakeholders had diverse opinions, the demand
equation, its derivation, and its operations had to be
transparent. The Solver provides transparency and,
given the value for one coefcient, will choose the
values for the other coefcients that provide the best
overall t of the data. The Solver produces standard
2
values, as well as a custom volatility index mea-
230
250
210
50
70
90
110
130
150
170
190
50
100
150
200
250
1990 1992 1994 1996 1998 2000 2002 2004
0
A
v
g
.

1
,
0
0
0

m
i
l
e

f
a
r
e
E
n
p
l
a
n
e
m
e
n
t
s
Actual deseasoned enplanements
Average total fare
Figure 5: The double-headed arrows show how major inections in prices directly affect enplanement levels.
Because changes in demand with price uctuations are important to many of our stakeholders, it is essential that
we model these up and down effects well. The total fare includes taxes and surcharges. Our use of a volatility
index to drive the regression best t provided a quality predictive capability.
sure. In modeling demand, we used coefcients that
are multiplicative factors, mixed with those that are
exponential, which makes solving regressions chal-
lenging. The Solver uses a brute-force iterative search
algorithm to nd the set of coefcients that best t the
data.
Price Elasticity and Best Fit vs. Highest
2
In our early application of the Solver, we used
2
to measure best t. However, this standard approach
produced a value for price elasticity that many SMEs
viewed as too low. Gosling (2003) obtained levels of
price elasticity much higher than the data yielded. We
compared the predicted trafc and actual trafc and
found that the actual trafc levels are more volatile
than the regression equation predicted although the
trend t is very good. By analyzing real data in
detail, we found that volatility increased around
price changes. Major changes in prices directly affect
enplanement levels (Figure 5). Because many of the
stakeholders considered changes in demand follow-
ing price uctuations important, we needed to model
these effects as well. We developed a volatility index
in the regression model, dened as the sum of the
period-to-period changes in predicted values divided
by the sum of the period-to-period changes in the
actual values, which we used to determine the best
t. The new regressed value for price elasticity fol-
lowed the quarter-to-quarter changes better (volatility
index of 92.88 percent versus 76.92 percent) with only
a slight loss in
2
value (97.39 percent versus 97.70
percent).
Developing Data for the Slider Tables
Analysts can use the system-dynamics model to eval-
uate scenarios with different regression parameters by
using slider bars. To create this feature, we developed
a set of coefcients that represented the spectrum
around each regression parameter. Analysts ran the
solver to explore the universe of reasonable param-
eters, creating a look-up table for use in the model
(Figure 6). Because demand variation with price rep-
resents one of the stakeholders more hotly debated
model elements, the slider bar for price elasticity
effects is of particular interest. As price elasticity
is changed, stakeholders can see and discuss the
changes in other elasticities needed to maintain best
t.
Analysts use the slider bars to evaluate changes in
scenario metrics that may occur if the baseline elastic-
ity assumptions change (Figure 7).
Using the Demand Slider Bars in
the System Model
By hypothesizing a price elasticity value of zero, we
can calculate a new set of coefcients resulting in a dif-
ferent t of the historical data (Figure 8). Then, we can
10
5
0
5
10
15
20
25
30
35
1.50 1.25 0.50 0.25 0.75 1.00 0
Fare elasticity
C
o
e
f
f
i
c
i
e
n
t
Intercept:
GDP elasticity
Fare elasticity
Trip time
SARS
9/11 Operations factor
9/11 Fear impact factor
9/11 Fear dissipation (quarters)
Hassle initial multiplier
Hassle dissipation (quarters)
Figure 6: This graph shows the variation in the other regression parame-
ters that occurs as an analyst changes the fare elasticity from1.5 (highly
elastic) to 0.0 (absolutely inelastic).
assess each scenario with the new values. With this
approach, we can use the model to combine unique
factors in a visually intuitive way to make quick
comparisons that represent the stakeholders myriad
and, at times, conicting views. By honoring all view-
points and providing rapid feedback on the quanti-
tative results, we can use the model to inform the
0.75
1.50
1.00
0.50
0.50
Reset to baseline
Off
On
3.00
1.50
0
0
1.25
0.973
0.625
0.536
1.000
1.000
GDP
Price
Travel time
Fear impact
vs baseline
Hassle impact
vs baseline
Developer override
Actual
Pred
2004 Act / Pred
Q1 Q2 Q3 Q4 Avg
1.017 0.990 0.989 0.983 0.994
J
u
n
-
9
1
J
u
n
-
9
3
J
u
n
-
9
5
J
u
n
-
9
7
J
u
n
-
9
9
J
u
n
-
0
1
J
u
n
-
0
3
Coefficient
Historical regression fit
Figure 7: We show the demand slider set at the baseline values incorporated in the system-dynamics model with
the demand coefcients for the baseline settings displayed, along with a graph of the historical and predicted
values for enplanements. The predictive equation produces a very good t to the historic data when we use the
baseline demand coefcients (GDP elasticity is 0.973, price is 0.625, and so forth). The predicted curve tracks
the ups and downs of the actual data very well.
debate and help the stakeholders to make good policy
decisions.
Modeling the Passenger Screening
Checkpoint
Since 9/11, passenger screening has become cumber-
some and changes regularly, increasing processing
time and hassle. As a result, air travelers sometimes
change their travel plans. USCAP stakeholders need
an extensive model of the screening checkpoint to
analyze the effects of potential policy changes on
travelers waiting times and on airport employees
productivity. We needed to include the passenger-
screening function so that we could quantify passen-
ger waiting times, security checkpoint throughputs,
and the costs of changes in security policies.
Security Screening Stafng: BODs, BBs, and FTEs
To understand and assess the security process, we
need to accurately track employees working at the
airport. In the USCAP system model, we count
employees in three ways: as bodies on duty (BODs),
as belly buttons (BBs), and as full time equiva-
lents (FTEs).
BODs represent the number of employees on duty
in a given day. We track BODs in the model so that we
0.75
1.50
1.00
0.50
0.50
Reset to baseline
Off
On
3.00
1.50
0
0
1.25
1.188
0.000
0.428
0.808
0.440
GDP
Price
Travel time
Fear impact
vs baseline
Hassle impact
vs baseline
Developer override
Actual
Pred
2004 Act / Pred
Q1 Q2 Q3 Q4
Avg
1.0012 0.9931 0.9737 1.0159 0.9960
J
u
n
-
9
1
J
u
n
-
9
3
J
u
n
-
9
5
J
u
n
-
9
7
J
u
n
-
9
9
J
u
n
-
0
1
J
u
n
-
0
3
Coefficient Historical regression fit
Figure 8: In this example of the use of the slider bar, we set price elasticity to zero, which changes the values
required for the other elasticities to maintain best t.
can estimate how many employees must be screened.
BBs represent the number of employees needed to
staff a given task seven days per week, 52 weeks
per year. The count of BBs in the model is critical
because it determines the number of people who need
security training or background checks. FTEs is the
number of employees that would be required if they
all worked eight hours per day, ve days per week,
and 52 weeks per year (2,080 hours). FTEs will dif-
fer substantially from BODs or BBs depending on the
extent to which part-time labor is used at the airport.
We track FTEs in the model primarily because most
businesses express the costs for salary and benets
per FTE. For the TSA, the congressionally mandated
limits on the number of employees are expressed in
terms of FTEs.
Stafng for Security Screening
Based on lane-stafng data provided by the TSA, a
passenger-screening lane requires 14.876 BODs (not
all airports operate three full shifts). TSAs BOD to
BB ratio is 1.76, and its BB to FTE ratio is 1.059.
All of these factors plus some screeners who work
at employee-only screening lanes make up a total
screener workforce of 46,900 FTEs (as of the third
quarter in 2005). In addition, TSA headquarters staff
consists of about 1,500 FTEs.
Screening Lanes for Passengers, Employees, and
Others
We have examined passenger screening lanes and
employee-only screening lanes, which we assume to
have different stafng levels and different capital and
operating costs. We can also use the model for the
proposed airport operating area (AOA) stations for
screening vehicles and personnel working on the tar-
mac. To support future analyses, we added capability
in the model for evaluating the addition of checkpoint
lanes along the airport perimeter fence. This enables
us to assess screening vehicles arriving at the airport.
All the screening location types have separate inputs
for stafng levels, capital and operational costs, and
nominal throughput levels.
Our operating assumption was that most employees
go through passenger-screening lanes, through dedi-
cated employee-only stations, or through AOA screen-
ing stations. We assume that employees screened at
passenger lanes have zero queue wait times because
they have priority over passengers. Passenger waiting
times go up as a result.
Quantifying Screening Throughput
Two metrics for the TSA screening function, screening
time and hassle, are causality factors for the demand
equation. We use other metrics to assess airports, air-
lines, airport tenants, and the TSAs costs for screen-
ing. We modeled queuing at the screening location to
facilitate calculation of these metrics. These metrics
are a function of passenger arrival rate, screener ser-
vice rate, and number of servers; a classical queuing
problem. We needed to quantify the followings set of
expressions:
{AvgWaitTime
i
, PeakWaitTime
i
, CondenceWaitTime
i
]
= n(Enplanements
i
, #Screeners
i
, ScreeningLanes
i
],
where i represents a time period.
Several other factors contribute to the calculation,
such as the construction costs of additional lanes, lane
geometry, and screening protocol. The model had to
provide for a commutative set of assumptions and
calculations, allowing users to explicitly dene any
one variable in the equation set, with the model solv-
ing for the others. For example, a user might ask: How
many lanes and screeners does the airport need to
maintain a constant 10-minute service level? or What
is the average wait time for a screener force con-
strained by a TSA budget of $3.7 billion?
Passenger arrival rates at the screening locations
are not well behaved because they are dictated by
the many different airplane departure proles at the
different airports. Stakeholders disagreed about how
to establish baseline throughput rates for passenger-
screening lanes. Data on throughput or, inversely, the
average service time is available only as manufac-
turing specications for the equipment or as labora-
tory results. Neither of these sources accounted for
lane geometry or variation in passenger arrival rates
and behavior. The TSA collects waiting time met-
rics, and we used them to calibrate the model. The
model requires realistic throughput assumptions that
include geometry and geography issues, time-of-day
arrival rates, and stafng levels. We dened passen-
ger screenings per day per lane as the primary per-
formance metric. Our analysis of TSAs waiting time
data showed that in the second quarter of 2004, the
average processing time for passengers going through
the screening lanes was approaching 15 minutes for
over 1,700 lanes. We concluded that as the screen-
ings per lane per day in the system approached 1,000,
the average security processing times began to climb
above the target of 10 minutes.
A closed-form solution to the queuing problem
wouldhave providedanaccurate assessment of screen-
ing waiting times based on a ratio of screening demand
(D) to the number of servers (C). After an exten-
sive literature search and unsuccessful efforts by the
USCAP modelers to nd a closed-form solution, we
modeled this effect with tables of wait times derived
from the D/C ratios. We used a Monte Carlo simula-
tion to populate the tables.
Segmenting the Airport Sector into Categories
For this type of model to be useful, it must be simple,
lean, representative, andresponsive. To keepthe model
lean, we followed a guiding principle in the modeling
effort: detail must earn its way into the model. For
example, because airports differ in size (measured in
number of daily enplanements) and type (connecting,
hub, or origin and destination), we could not group
all airports together for the analysis. Each airport cat-
egorys characteristics affect operations and expenses.
The airports differ in daily distribution of arrivals of
aircraft of different sizes and types, in ratio of origin-
and-destination (O&D) passengers to enplanements
(the number of screenings required is a function of
the number of enplanements), and in capital develop-
ment costs per incremental unit of capacity. In assess-
ing the diversity among airports, the airport SMEs
determined that the model analysis would be greatly
improved by segmenting the airports into ve airport
categories (Table 2). Thus, this increased level of air-
port detail earned its way into the model.
Origination-and-
Number of destination Enplanements
Airport category airports passenger ratio (%) (2004millions)
Large connecting 9 46.2 20353
Large origination-and- 5 79.3 9389
destination
Large-medium 10 44.8 9301
connecting
Medium origination-and- 44 91.8 22672
destination
Small or nonhub 375 99.7 7480
Total 443 71.2 69196
Table 2: We divided the airport sector into ve subsectors. The ratios of
origination-and-destination passengers to total trafc volume vary widely
among these categories. For each airport category, the model incor-
porates a table that we built using external simulation that contains
security-processing times as a function of the ratio of screening demand
to screening-lane capacity.
Security Processing Time
The average security-processing time includes the
time a passenger waits in the queue to reach the
screening station and the time it takes the passenger
to go through the screening process. We assume that
the physical screening takes 1.5 minutes, which rep-
resents the average time for normal screening plus
occasional secondary screening for some passengers.
As the ratio of demand to capacity increases, average
wait times increase exponentially.
We dene condence-security-processing time as
the time a passenger plans to allow for security
screening to ensure at a 95 percent condence level
that he or she gets through the security process and
arrives at the airport gate before the ight cut-off
time. With a 10-minute target for average security-
processing time, the condence-security-processing
time is just under 25 minutes, which we included in
the total door-to-door planning time that is one of the
causal factors in the passenger demand equation.
Analytical Products and Their Impacts
In the rst three years of USCAPs existence (2003
through 2005), we conducted many analyses of pro-
posed security measures. Some proposals died quickly
as we analyzed them using the USCAP analyti-
cal process. Many proposals are still under con-
sideration, require technologies under development,
involve unresolved privacy issues, or are subject to
political debate. In all cases, however, all the stake-
holders have relied on the USCAP process to under-
stand the potential effects of the analyzed proposals.
Employee Credentialing and Screening
During the initial proof-of-concept phase of the devel-
opment of the USCAP model in 20032004, we
focused on security scenarios associated with con-
templated government policies for credentialing and
screening employees working at the airport. We eval-
uated four scenarios:
(1) The baseline scenario (Scenario 0) describes
the existing system for credentialing and screening
on-airport employees.
(2) Scenario 1, 100 percent credentialing, requires
background checks and picture identication cards
for all employees with access to the airport oper-
ational area (AOA), the security identication dis-
play area (SIDA), or the sterile area of the terminal.
The AOA, the SIDA, and the sterile area are parts
of the airport with different security and operational
considerations.
(3) Scenario 2 includes Scenario 1s requirements
and a requirement that employees working in the
sterile area of the terminal (the portion of the air
terminal in which screened passengers wait for or
board their airplane) must pass through TSA screen-
ing every time they enter it.
(4) Scenario 3 includes all Scenario 2s requirements
plus the requirement that all employees entering the
AOA (the portion of the airport where the airplanes
are operating) must pass through TSA screening
every time they enter the sterile area or the AOA.
We calculated the economic impact on all stake-
holders for each scenario relative to Scenario 0, the
baseline (Table 3).
We provided results to various industry leaders,
including the TSA administrator, in early 2004. Gov-
ernment policy makers consider many factors, so we
cannot construe our analysis as causing the outcome.
When we presented our results, however, the gov-
ernment and industry leaders generally agreed that
Scenario 3s increased costs would have to be offset
by major security benets before they would consider
implementing it.
In 2004, the TSA ruled that all employees enter-
ing the sterile area, in addition to background checks
and being credentialed, must be screened every time
USCAP scenario 20 year cost
Scenario 1 Increase the area where credentialing is required $0.3 billion
Scenario 2 Add sterile area workers must be screened $1.3 billion
Scenario 3 Add expanded required screening area $93.0 billion
including AOA
Table 3: We compared scenarios for increased levels of airport employee
credentialing and screening. As part of validating the USCAP model,
the stakeholders dened three scenarios for potential increased airport
employee credentialing and screening: the baseline scenario was the
then-current credentialing and screening level. The data reects the incre-
mental costs for the scenarios. After thoroughly evaluating the model and
its assumptions, the stakeholders unanimously endorsed the model. The
TSA has adopted policies that fully encompass Scenario 2 and has not
implemented policies as onerous as those in Scenario 3.
0
10
20
30
40
50
60
70
80
90
M
i
n
u
t
e
s
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Passenger average
security-processing times
Base case passenger average
security-processing times
Figure 9: Average security-processing time increases dramatically with the proposed reduction to 39,000 screen-
ers. At the current stafng level, 45,000, the TSA is committed to a 10-minute average processing time. The
proposed reduced staff would create an immediate increase in processing time to 35 minutes, growing eventually
to more than 90 minutes.
they enter the sterile area, essentially implementing
Scenario 2. It is evident that the USCAP analysis con-
tributed to the decision-making process by informing
the discussion about the policy.
TSAs What-If Analysis
In late July 2004, a congressional committee started to
consider a reduction in the TSA screener force from
approximately 45,000 to 39,000 FTEs. Four days after
the proposal became public, we provided the stake-
holders with the USCAP assessment of the impact.
Over the 25-year study period of the analysis, the
reduction in screening staff would cause an annual
average eight percent reduction in air travel, cutting
airline revenues by an estimated $10 billion in annual
airline revenue. This quick response validated that we
have achieved our objective to provide information to
the dialogue in a timely manner.
The stakeholders validated the analytical results
and generally accepted them as a reasonable estimate
of the potential consequences of the proposed reduc-
tion in staff. However, a few stakeholders differed
over some of the modeling assumptions. Because we
were unlikely to gain stakeholder consensus on these
assumptions, we ran sensitivity analyses on the chal-
lenged variables. These sensitivity analyses showed
that the differing stakeholder assumptions did not
cause an order-of-magnitude change in our pro-
jected outcome of the proposed reduction in stafng,
enabling the various stakeholders to accept the ana-
lytical results.
In examining the case of the likely impact of a 6,000
reduction in screeners and the resulting loss of screen-
ing lanes, we considered two sensitivities: (1) the
effect on peak and average passenger-screening times
due reducing the number of screening lanes, and
(2) the types of changes in screening policies and
protocol that might enable the TSA to maintain the
10-minute average screening time.
If the number of lanes in operation were reduced
to reect the number that could be fully staffed
by 39,000 screeners (assuming that all throughput
rates remain unchanged), then the average security-
processing time would initially rise to about 35 min-
utes (Figure 9). If no additional stafng ever became
available, the security-processing time would eventu-
ally exceed 90 minutes. Such an increase would sub-
stantially discourage passenger air travel.
In the near term, such an increase in security-
processing times would cause an approximate six per-
cent loss in demand. In the long term, if the situation
persisted, it would cause as much as a 25 percent loss
in demand (Figure 10).
Recognizing that travelers would not tolerate such
long screening times, we ran sensitivity analyses to
shed light on alternative security approaches that
would maintain a 10-minute average screening time
while constrained to 39,000 screeners. Although some
suggested alternatives worked better than others,
2004 2010 2012 2014 2016 2018 2020 2022 2024 2026 2030 2028
M
i
l
l
i
o
n
s
120
100
80
60
40
20
0
30
25
20
15
10
5
0
Passengers
% Change from base
P
e
r
c
e
n
t
2000 2002 2006 2008
Figure 10: The proposed reduction of 6,000 screeners (without an improvement in productivity) would cause an
increase in preight screening time and a reduction in trafc as some passengers would either cancel their travel
plans or use alternate modes (car, train, bus). With trafc growth, a higher percentage of air travel passengers
would be lost as the increased slope of the lost passenger and percentage lost lines indicate. By the end of
the study period, the industry could lose 25 percent of the passenger demand. (The quarterly variation reects
quarter seasonality.)
each alternative had some perceived negative impact
on security.
While Congress was undoubtedly inuenced by
political pressures and other factors, our impact anal-
ysis, which all the stakeholders supported and eas-
ily understood and accepted, clearly contributed to
killing the proposed cuts.
Increase in Passenger Security Charges
Also in the summer of 2004, Congress considered
changes to the security-fee structure that could have
tripled the security charges levied on the air trav-
eler. At the time, several stakeholder leaders believed
that air travelers would willingly pay a bit more for
enhanced security and that small increases in secu-
rity fees would have no effect on air-travel demand.
After much discussion within the USCAP coalition,
we conducted an extensive investigation into the
USCAP demand equation. We demonstrated with the
demand modeler that fare changes had historically
affected air-travel demand and that a curve t of
demand with a price elasticity of zero poorly t the
historical data. The demand models intuitive, ani-
mated displays helped all stakeholders to understand
historical market behaviors.
Eventually, after much debate, Congress did not
change the fee structure. It is unlikely that the stake-
holders leaders changed Congresss beliefs, but our
analysis clearly contributed to the dialogue. In the
subsequent USCAP meetings of 2005 and 2006, the
discussion of price elasticity usually did not include
assertions of zero elasticity. All stakeholders accept
and support the current price demand elasticity factor
in the model, which is 0.625.
Improved Cargo Security Proposals
In November 2004, the TSA issued a notice of pro-
posed rule making (NPRM) that included multiple
provisions focused on enhanced cargo security. The
TSA assessed the implementation costs, following
Ofce of Management and Budget (OMB) estimat-
ing guidelines, as $83.1 million annually. A subset
of USCAP participants, excluding the TSA because
of government rules barring its participation in this
stage of the rule-making process, projected these costs
as being $174 million. In May 2006, the TSA published
an update of the actual rule that reected many of the
costs USCAP had included and contained a revised
estimate for cargo-security screening of $167 million,
which is very close to the USCAP estimate.
Other Benets of the USCAP Analytical Process
We cannot quantify all the benets of the USCAP ana-
lytical process. In working together, the USCAP team
members who are SMEs share information with less
informed members. As the SMEs assess a proposed
policy, they describe the actions needed to implement
it. These actions include estimating xed and vari-
able cost changes, process changes, employee pro-
ductivity, and impacts on customers. The discussion
among USCAP members often reveals unanticipated
problems with a proposed policy, enabling them to
improve the proposal or, in some cases, to drop it.
One such discussion centered on the security vul-
nerability associated with the door and stairway
between the passenger-loading bridge and the tar-
mac. Seeing the door and stairway as giving bad
guys access to airplanes, some stakeholders proposed
requiring that the door be locked and that access
between the passenger-loading bridge and the tarmac
be prohibited. However, other stakeholders brought
up many operational and regulatory problems with
such a prohibition, and the proposal did not move
forward.
Conclusions
We brought the USCAP model from concept to appli-
cation in less than three years. We originally viewed
it as an exploratory proof-of-concept research activ-
ity; it is now an operational model and analyti-
cal process. In January 2006, following the models
successful beta test, the Aviation Security Advisory
Committee (ASAC) declared the USCAP model oper-
ational and valuable for assessing aviation security
policies. (ASAC is the government-industry advisory
committee formed under the Federal Advisory Com-
mittee Act to provide for open dialogue about gov-
ernment aviation security policies.) In surveying the
literature, we found no other policy analysis method
with as broad or deep a modeling scope as ours
and no other model that combines all the same tech-
niques. Program ofces within the US Department
of Transportation, the US Department of Health and
Human Services, the US Department of Homeland
Security, the National Aeronautics and Space Admin-
istration, the US Federal Aviation Administration, the
US Department of Defense, the US Department of
Commerce, and the US Ofce of Science and Tech-
nology Policy have requested information on the
USCAP model so they can evaluate its applicability
to issues beyond commercial aviation security. The
International Civil Aviation Organizations Commit-
tee on Aviation Environmental Protection (CAEP) has
sought information on USCAP because it is trying to
assess the economic impacts of potential environmen-
tal regulations on commercial aviation.
This pragmatic application of operations research
techniques in government policy analysis is pay-
ing big dividends. The immediate savings identied
through the use of the USCAP model are in the
tens of billions of dollars with the 20-year impact
estimated as over $100 billion. The discussion and
shared understanding of the direct and consequen-
tial impacts of proposed government policies pro-
vides a way to address one of the major concerns
of the September 11 Commission, that the country
cannot afford to implement all possible security mea-
sures against all possible threats. With the USCAP
analytical process, it is more likely that the limited
amounts our country can afford to spend on avia-
tion security will provide both improved security and
minimal adverse impact on key commercial aviation
stakeholders: air passengers, air-freight shippers, the
airline industry, and the government.
Acknowledgments
Many people contributed to the development and imple-
mentation of the USCAP model and analytical process.
We thank the following people for their efforts in the
project: Richard F. Marchi, Airport Council International;
John M. Meenan, Air Transport Association; Ronald H.
Robinson and William D. Droppelman, Boeing; Laurence
T. Phillips, Department of Transportation; and Michael
Derrick, Richard E. Hansen, Bruce M. McDaniel, Greg
E. Moxness, and Russell Wooten, Transportation Security
Administration. The dedicated collaboration of these people
was critical to our shared success.
References
General Accounting Ofce (GAO). 2002. Review of studies of the
economic impact of the September 11, 2001 terrorist attacks
on the World Trade Center. GAO-02-700R, Impact of Terrorist
Attacks on the World Trade Center, 24.
Gosling, G. D. 2003. Independent review of the Finance Canada
revenue model for the air travelers security charge: 1. Depart-
ment of Finance Canada, Tax Policy Branch, Ottawa, Ontario,
Canada.
Mosenthal, P., R. Prahl, C. Neme, R. Cuomo. 2000. A modied
Delphi approach to predict market transformation program
effects. 2000 ACEEE Summer Study on Energy Efciency in Build-
ings Proc. American Council for Energy Efcient Economy Pro-
ceedings, Washington, D.C., 6.2896.300.
National Commission on Terrorist Attacks on the United States.
2004. The 9/11 Commission Report. Government Printing Ofce,
Washington, D.C.
The following testimonials are excerpted from the
Edelman competition video:
Jim May, president of the Air Transport Associa-
tion, stated, It gives us great pleasure to have part-
nered with the USCAP team to achieve the greatest
benet from every security investment through a risk-
based priority setting. Development of the USCAP
model, which utilizes the best of operations research,
has enabled us to expand the ability of government
and industry to work more closely, particularly in the
area of security enhancements. During the past three
years, USCAP has grown from a concept to a highly
usable process and model that provide reliable facts
and data for the consideration of the aviation secu-
rity priorities. As a result, todays shared understand-
ing between government and industry enables us to
make more informed decisions while enhancing avi-
ation security. Im delighted that ATA has played an
important role in this program. We salute the USCAP
team and their commitment to keeping our passen-
gers, our crews, and our country safe.
Greg Principato, president of Airports Council
InternationalNorth America, stated: My experi-
ence with the United States Commercial Aviation
Partnership has been quite positive. This project uses
the analytic skills of the team members in creative
ways to address pressing aviation security issues. This
allows both government and industry to improve
their understanding of issues affecting commercial
aviation security. Without a doubt, this project has
contributed to improved security policy. The govern-
ment can make decisions to provide better security at
lower costs as a result of USCAP.
Al Martinez-Fonts, Assistant Secretary, Private Sec-
tor Ofce, US Department of Homeland Security,
stated: Over the past three years, I have observed
USCAP go from concept to a valuable risk man-
agement tool. The teams creative use of operations
research to develop a model where government and
industry can sit down together and discuss security
policy issues before issuing a rule-making has been
wonderful. The dialogue, the understanding of the
issues, to the benet of commercial aviation has been
very very helpful. At the end of the day, security poli-
cies and the implementation protocols issued by DHS
and TSA are more effective and less costly. We there-
fore have a win-win-win situation; government, pas-
sengers, and industry are all winners.

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Vol. 37, No. 1, JanuaryFebruary 2007, pp.

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