““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
Strengthening Bizav Security
Taking the business aviation world by surprise in October 2008, the Transportation Security Administration proposed regulations that would have subjected private jet travelers to an airline-like security experience.
Called the Large Aircraft Security Program (LASP), the regulations would have mandated physical screening and watch-list checks of passengers before every flight. They also would have required FBI criminal-history checks and fingerprinting of pilots, the hiring of in-house "security coordinators" and creation of formal security programs by aircraft owners or operators.
The LASP rules would have applied to aircraft with a maximum takeoff weight of more than 12,500 pounds, a cutoff that includes most business jets, some large turboprops and even some helicopters. The general aviation industry strongly opposed the new rules. Aviation associations lobbied for a longer comment period, which was granted. The TSA also went to the trouble of hosting listening sessions around the U.S., inviting any interested person to comment on the proposals.
In the end, five public sessions generated thousands of remarks. The government also gathered more than 7,000 additional comments on its regulation-tracking Web site.
The TSA appears to have taken opposition to its proposed program seriously. In a March 26 speech at a Westchester Aviation Association meeting in White Plains, N.Y., Brian Delauter, the TSA's general manager for general aviation, revealed that the agency will release revised proposed rules later this year. The new proposals were due to be sent first to the Department of Homeland Security (DHS) and Office of Management and Budget for review, he said, adding that they differ significantly from the rules proposed in 2008.
"The [rulemaking] process worked," Delauter said. "We got public comments and we listened to the industry. We've implemented a lot of those suggestions and we've retooled some portions of it that I think make better sense for security and for business." After the TSA releases the new proposed regulations in the fourth quarter, there will be a 60-day comment period as well as another round of public meetings, according to Delauter.
Although the TSA has not specifically said so, comments by several of its officials suggest that the new rules will raise the weight limit to something higher than the originally proposed 12,500 pounds and shift much of the burden for ensuring that passengers are safe to fly to pilots instead of external security personnel.
There are other encouraging signs that the DHS and TSA are taking a more strategic approach to security. DHS secretary Janet Napolitano announced in April that emergency measures implemented in the wake of the December 25 attempted bombing of a Northwest Airlines flight would be modified. Those measures applied to travelers from 14 nations considered to be at high risk for terrorist activity, but the revised rules will apply to all visitors from outside the U.S. "These new measures utilize real-time, threat-based intelligence along with multiple random layers of security, both seen and unseen, to more effectively mitigate evolving terrorist threats," Napolitano said.
Security experts contacted by BJT have long advised such measures. The proper way to tackle security without focusing on tactics, like the possibility of a terrorist hijacking a business jet, is to employ investigation and intelligence tools, said Bruce Schneier, chief security technology officer of British Telecommunications and author of the book Beyond Fear: Thinking Sensibly About Security in an Uncertain World. "You don't want to spend a lot of money on measures that require you to guess the plot because you're probably going to guess wrong," Schneier said.
Until the TSA releases the next version of the LASP rules, the aviation industry won't learn what the agency is thinking and how it will match the needs of securing business aviation with DHS's new strategic approach. Many in the business aviation industry believe that security is already well served by internal corporate policies and by heightened awareness of risks at airports used by business travelers.
The dramatic images of the damage caused when Andrew Stack flew his four-seat Piper into an Austin, Texas IRS building on February 18 reignited concerns about the vulnerability of general aviation airplanes and airports to people who wish to do harm. Obviously, the need for security and the ability to conduct business must be balanced, but how the government chooses to do that remains unclear.