Although the increase in fuel prices and the credit crunch have forced some airlines (including Luton Airport-based business concern Silverjet) and tour operators (such as West Ham United FC’s former sponsor XL) out of business in 2008, the encouraging news is that security spending in airports is still expected to increase at double digit rate in the years to come.
The deepening crisis in the airport sector is taking its toll. Companies such as Italian flagship airline Alitalia (which filed for bankruptcy in late August) and London-based K&S have been hit hard, with the global economic downturn and volatile fuel prices playing a significant role in their fate. With a worldwide recession seemingly only a step away, the crisis in the airports industry doesn’t have any precedent.
Cutting security costs ‘not an option’
Securing airports and flights from terrorist and criminal attacks is a major issue for airport administrators. National and international bodies including the International Air Transport Association (IATA), the International Civil Aviation Organisation (ICAO) and the European Organisation for the Safety of Air Navigation (EUROCONTROL) are unwilling to reduce security levels as part of the cost-cutting frenzy.
Security spending in airports is often charged back to airline companies which already face increasing operational costs on oil and commodities. Consumers are also faced with recession-based worries and credit restraints, and are obliged to cut back on luxury spending such as holidays and travelling. Airline companies are therefore squashed between the increasing costs of fuel and security and the reduction of their customer base, on to whom they could pass additional costs.
Double-digit growth forecast
Speaking about the new Frost & Sullivan report entitled ‘European Security Services Market’, Matia Grossi (an industry analyst employed by the Electronics and Security Group) explained: “To maintain high security standards, the security spending in the transport sector in Europe is expected should show double-digit growth in the following three-to-five years. Video surveillance equipment and analytics software are increasingly deployed in airports, with growth of over 10% year-on-year.”
Grossi concluded: “On the other hand, security officers are now being deployed more and more – in conjunction with additional police personnel – to operate the ever-increasing security systems deployed in airports.”
Security Growth Partnership Services Programme
Frost & Sullivan’s Automatic Identification and Security Growth Partnership Services Programme also includes research on the following markets: electronics and security, the European security industry and the CCTV industry (European video surveillance equipment market).
The Growth Partnership Company partners with clients to accelerate their growth. The company’s TEAM Research, Growth Consulting and Growth Team Membership is designed to spur on clients in creating a growth-focused culture that generates, evaluates and implements effective growth strategies.
To purchase your copy of the report contact Joanna Lewandowska in the Corporate Communications Department at Frost & Sullivan (e-mail: [email protected])
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