Airport Security Mkt. is About to Get More Bullish

The next few years present an excellent opportunity for investing in firms that develop or sell airport-security equipment, according to a new market analysis.

Meanwhile, Frost's Cleetez and Herbert note that numerous smaller firms have jumped into the aviation security market, many since 9/11. To survive, these smaller firms are going to have to make sure they have enough money budgeted for research and development (R&D). In a field with an emphasis on technological updates, change and innovation, this is a critical area. Another factor is that TSA considers R&D investments an important criterion in deciding whether to award certification.

The larger security firms are able to invest heavily in R&D, and it's a prime factor that keeps them on top. L-3 and Bioscrypt, for example, invest as much as 12-18 percent of their revenue in R&D.

To compensate, smaller start-up firms will have to continue in their efforts to attract venture capitalists who specifically agree to help fund this area.

A different kind of market sub-segment involves small U.S. airports, where there is an increasing awareness of security needs. Many have already made significant purchases of digital surveillance and explosive detection systems.

After North America, the next part of the world that is gearing up for a boom is the Asia-Pacific region, Cleetez adds.

>>Contacts: Rani Cleetez, +91-44-52044523,; Ken Herbert, 33 (0) 1-42-81-38-22,; Thomas Frankl, SITA, +41 22 747 6296,

Security Priorities

The following are Frost and Sullivan's 10 sub-segments of the airport security industry as ranked by their growth rates from 2004-2009:

1. Digital surveillance

2. Explosive detection

3. Biometrics

4. Perimeter and access control

5. X-ray and infrared

6. Metal detectors

7. "Others" and integration

8. Closed-circuit television

9. Intercom and video door phones

10. Alarms and sensors

Source: Frost and Sullivan

[Copyright 2005 Access Intelligence, LLC. All rights reserved.]


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