An Assessment of the Impacts of Inspection Time on the Airline Industry’s Market Share after 9/11

The main objective of this paper is to examine the impacts of inspection times on the airline, as well as the overall economic optimality of current goals in terms of inspection times. The analyses are conducted by means of the combined use of discrete choice models to quantify passenger behavior after 9/11, a discrete event simulation of security screening operations to quantify the performance of alternative screening procedures, and an economic formulation to compute welfare. The behavioral modeling results indicate that inspection time, travel cost and travel time play critical roles in mode choice. The simulation results show that reducing inspection times had a noticeable effect on the airline market share: for an average inspection time of about two hours (the situation immediately after 9/11), the market share would have been about 32% for the corridors considered in the paper, while reducing inspection times to ten minutes leads to a market share of 49%. The results of economic welfare indicate that an inspection time of ten minutes is not much better than twenty minutes. This suggests that a relaxation of the ten minutes goal recommended by the Transportation Security Administration may be in order.