Study on economic and other benefits of one stop security arrangements

Transcription

1 Study on economic and other benefits of one stop security arrangements Project Report by o&i consulting October 2018

2 Contents Contents Disclaimer Abstract Glossary of terms European Union (EU) Member States European Economic Area (EEA) States Non-EU Schengen States Third countries participating in OSS Third countries in negotiations with EU regarding OSS Airports and airport codes (involved or discussed in study) Other acronyms Executive summary Background and introduction Objectives Study approach and methodology Findings Conclusions and recommendations A. Project background and set up Introduction Objectives of the study Project scope Approach Responsibilities Stakeholder engagement Methodology Survey of the status of OSS application in EU Member States and Third Countries Survey of One Stop Security implementation at airports October 2018 Restricted 2

3 7.3 Fact finding discussions with 16 airports Fact finding with other stakeholders Analysis and consolidation of findings Stakeholder workshop B. Findings State participation in OSS Status quo of OSS implementation at a State level OSS implementation at airport level Implementation by airport size Reasons for lack of OSS implementation Lack of transfer passengers State regulation Border control and infrastructure limitations Assessment of cost and benefits Transfer passenger market Study airports Investment required to enable OSS Direct financial benefits of OSS Other airport and airline benefits of One Stop Security Security benefits of OSS: raising global security standards Political benefits of OSS C. Conclusions and Recommendations Conclusions Status quo of One Stop Security Reasons for lack of implementation at airport level Cost of implementing OSS Benefits of One Stop Security Types of airports likely to benefit most from OSS October 2018 Restricted 3

4 12.6 Expanding OSS to new countries Recommendations Alignment of security standards OSS development strategy Acknowledgements D. Appendices Appendix 1: Questionnaire to States / Appropriate Authorities Appendix 2: Questionnaire to Airports Appendix 3: Top 46 third countries from which the EU received transfer traffic in Contact October 2018 Restricted 4

5 1. Disclaimer The information and views set out in this study are those of the author(s) and do not necessarily reflect the official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this study. Neither the Commission nor any person acting on the Commission s behalf may be held responsible for the use which may be made of the information contained therein. October 2018 Restricted 5

6 2. Abstract DG MOVE commissioned o&i consulting ltd to conduct a One Stop Security (OSS) study to understand the status quo of its application, identify reasons for non-implementation and to assess its costs and benefits. OSS is fully allowed at a State level across the EU/EEA, Switzerland and participating third countries, with notable exceptions being the UK and USA. Implementation at an airport level is more varied; small airports with few/no transfer passengers typically do not offer any OSS or provide full OSS using process solutions. Larger airports, which benefit most from OSS due to larger transfer volumes, offer either full OSS, typically following significant investment in infrastructure change, or partial OSS, often for Schengen passengers who are already segregated. OSS is usually achieved via a separate arrivals corridor, or via an additional floor in the terminal. The primary inhibitor to OSS implementation at airports is the cost of making these infrastructure changes, though several airports said they would incorporate OSS into future development plans. Benefits of OSS include cost savings from eliminating re-screening, improved connection times and better experience for passengers, as well as supporting improved cooperation between participating States and raising and aligning overall global aviation security standards. October 2018 Restricted 6

7 3. Glossary of terms 3.1 European Union (EU) Member States Schengen Austria Belgium Czech Republic Denmark Estonia Finland France Germany Greece Hungary Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Slovakia Slovenia Spain Sweden Non-Schengen Bulgaria Croatia Cyprus Ireland Romania United Kingdom 3.2 European Economic Area (EEA) States All EU states Iceland Lichtenstein Norway 3.3 Non-EU Schengen States Iceland Lichtenstein Norway Switzerland October 2018 Restricted 7

8 3.4 Third countries participating in OSS Canada Faroe Islands Greenland Guernsey Isle of Man Jersey Montenegro Singapore USA 3.5 Third countries in negotiations with EU regarding OSS Hong Kong Israel Serbia Japan 3.6 Airports and airport codes (involved or discussed in study) Airport Amsterdam Airport Schiphol Berlin Schönefeld Brussels Calgary Changi Copenhagen Dublin Frankfurt Hamad International Heathrow Helsinki Istanbul Atatürk Code AMS SXF BRU YYC SIN CPH DUB FRA DOH LHR HEL IST October 2018 Restricted 8

9 Airport Code Lisbon Ljubljana Jože Pučnik Lyon Madrid Barajas Montreal Munich Ostend Palma Podgorica Porto (Francisco Sá Carneiro) Prague Rome (Leonardo da Vinci Fiumicino) Stockholm Arlanda Thessaloniki Toronto Vancouver Vienna Vilnius Warsaw Zurich LIS LJU LYS MAD YUL MUC OST PMI TGD OPO PRG FCO ARN SKG YYZ YVR VIE VLN WAW ZRH 3.7 Other acronyms Acronym Meaning A4E CBSA Airlines 4 Europe Canadian Border Security Agency October 2018 Restricted 9

10 Acronym EC ECCA EEA ETD EU HBS IATA ICAO LH MCT MoI mppa MSMs NASP OSS PRM QCAA SAGAS TSA USG Meaning European Commission European Common Aviation Area European Economic Area Explosive Trace Detection European Union Hold baggage screening International Air Transport Association International Civil Aviation Organisation Lufthansa Minimum Connection Time Ministry of Interior Millions of passengers per annum More Stringent Measures National Aviation Security Programme One Stop Security Passengers with Reduced Mobility Qatar Civil Aviation Authority Stakeholder Advisory Group for Aviation Security Transportation Security Administration United States Government October 2018 Restricted 10

11 4. Executive summary 4.1 Background and introduction In the context of aviation security, recognition of equivalence (One Stop Security, or OSS) is defined as the acceptance and formal approval by a State that security measures carried out in another State are at least equivalent, in terms of the security outcome, to its own security measures. OSS enables passengers, their cabin baggage, hold baggage and/or cargo to be exempted from re-screening at a transfer airport. The principle of OSS is to deliver speed and convenience, whilst achieving cost savings and maintaining an equivalent high level of security, avoiding the repetition of security checks to people and items which have remained in a secure environment since their point of departure. OSS is widely established across the EU/EEA and Switzerland, enabled by application of a common set of aviation security rules set by the EU. The EU also has OSS arrangements with the United States, Canada, Montenegro, Singapore, Faroe, Greenland, Guernsey, Jersey and the Isle of Man, with initiatives ongoing to expand the list of countries participating in OSS. Despite formal OSS arrangements being in place at a country level, the degree of application within participating States varies. Implementation at airport level varies considerably, e.g. OSS for baggage but not passengers (or vice versa); or only from certain origins. 4.2 Objectives The study had three core objectives: 1. To understand the status quo of the application of One Stop Security 2. To identify reasons for lack of full implementation 3. To determine the costs and direct / indirect benefits of establishing One Stop Security, establishing which type of airport benefits most from One Stop Security and recommending how to address obstacles to full implementation. 4.3 Study approach and methodology The following schematic describes the methodology o&i consulting used to complete the study: October 2018 Restricted 11

12 Stakeholder communications Development of conclusions and recommendations Analysis European Commission Survey of the status of OSS application in Member States and third countries Stakeholders: Appropriate Authorities of relevant countries Identify audience Survey of the status of OSS implementation at airports and for objective 2 reason for not implementing Stakeholders: Airports of relevant countries Discussions with other relevant stakeholders: Appropriate authorities; airport and airline associations; airlines Identification of 15 airports for further investigation of the costs, benefits and obstacles to OSS Detailed discussions with airports Stakeholders: 15 airports from Member States and third countries Stakeholder workshop Discussion and peer review of conclusions and recommendations Identify audience Draft and final reports for objective 2 Presenting overall conclusions and recommendations; identifying which stakeholders benefit and possible solutions to obstacles Figure 1: Overview of the project methodology employed by o&i consulting An initial survey was distributed to all 37 OSS participating States to understand OSS application at a State level and the States understanding of the extent of implementation at an airport level, including a view of benefits and reasons for non-implementation. A second survey was issued to 51 airports, their selection guided by responses received from the State surveys. From these respondents, sixteen airports of varying size and location were identified with whom to discuss OSS in more detail, to more fully understand the costs and benefits associated with OSS. Table 1: Airports participating in study inc Other stakeholders engaged during the size and OSS implementation status study included IATA, Airlines for Europe (A4E), ACI EUROPE, Transport Canada, the TSA, Montenegro Civil Aviation Agency, Istanbul Ataturk Airport and Hamad International Airport in Qatar. October 2018 Restricted 12

13 4.4 Findings Status quo of the application of One Stop Security State level The following infographic summarises the current global status of One Stop Security type arrangements that were identified in the study: Montenegro Israel Qatar Hong Kong ** Singapore Figure 2: One Stop Security status of all applicable States Out of these States: USA does not allow inbound OSS, the process only works outbound from the USA Canada allows OSS at four Class 1 airports from EU/EEA, Switzerland and USA only United Kingdom (+Jersey, Guernsey and Isle of Man) allows OSS from domestic origins only, with some exceptions Turkey (Istanbul Ataturk) has its own OSS type arrangement for international to international transfer passengers from EU, non-eu Schengen and OSS 3 rd countries Qatar: Independent exempt transfer process for passengers from 12 origin airports Application of OSS at airport level and reasons for non-implementation Although OSS applies throughout the EU/EEA and Switzerland (with the exception of the UK), implementation at an airport level is more varied. The chart below highlights the differences in levels of OSS implementation by airport size: October 2018 Restricted 13

14 Figure 3: OSS implementation summary by airport size Almost all medium to large EU/EEA airports offer full or partial OSS, with the full offering typically requiring significant infrastructure investment. Most of the airports offering partial OSS do so for Schengen origin passengers only, since these passengers are all OSS eligible and are already segregated from non-oss passengers, so there is no additional requirement to create segregated routes. A number of airports said that they would include OSS flows in future terminal development plans but could not justify the cost for a standalone OSS project. For airports below 10 million passengers per annum (mppa), insufficient transfer volumes are the main reason that OSS is not implemented. The majority of these airports state that they offer either full OSS or no OSS. For full OSS, a process solution is typically used to escort any OSS passengers to bypass screening. Although the number of small airports not offering OSS is high, the number of transfer passengers affected is very low Cost benefit assessment The costs of implementing OSS can be significant, requiring major infrastructure change. Some of the larger airports in the study spent between 50m and 100m to deliver full OSS capability, although in these instances, the changes were made as parts of wider airport projects, since OSS could not justify such investment by itself. At the other extreme, some airports spent little or no money implementing OSS, either because their infrastructure allowed for the segregation of passenger flows, or process solutions were used to achieve OSS segregation (typically the case in small airports with few transfers). The main direct financial benefit of One Stop Security centres around reducing transfer passenger security costs which translate into reduced transfer passenger security fees. An indicative assessment of savings for the EU/EEA and Swiss OSS market is shown in October 2018 Restricted 14

15 the table below. This demonstrates that while an estimated EUR 339m pa in savings has already been already realised, OSS is only implemented to 71% of its potential (based on the existing OSS market and including potential from the UK) and that further savings can be achieved by EU/EEA airports implementing OSS fully. Equally, expanding OSS to other countries will create more savings to the aviation industry. OSS market in EU/EEA and Switzerland Transfer passengers % of market Potential OSS saving Total potential market size 116,827, % 571,286,000 Potential OSS market based on existing OSS countries 97,997,498 84% 479,208,000 Realised OSS market based on airport implementation 69,382,229 59% 339,279,264 Table 2: Potential OSS market size and value of OSS within the EU/EEA/Swiss market in terms of transfer passenger security fee savings As well as cost savings, other key benefits are improved passenger processes, with reduced / more robust connection times and better passenger experience of most commercial importance to airports, airlines and passengers. At a more macro level, primary benefits of OSS include global alignment and raising of security standards and increased cooperation between States. 4.5 Conclusions and recommendations OSS is generally allowed at a State level across EU, non-eu Schengen and participating third countries, with the major exceptions being the UK which only allows OSS from (most) domestic origins, Canada which allows OSS at four Class 1 airports only and the USA which does not allow any inbound OSS. OSS implementation at an airport level is more varied, mainly due to the volume of transfer passengers at individual airports and the configuration of terminal infrastructure. Our study draws the following key conclusions: Airport level assessment The largest hub airports (>40 mppa) stand to benefit most from OSS implementation due to their high volumes of transfer passengers, but their size and the fact that they are often multi-terminal (separate buildings) present challenges to full OSS. Medium sized airports appear to be more able to offer full OSS than the major hubs, possibly because most are single terminal, with a larger proportion of transfer passengers being Schengen Schengen than is the case with the global hubs. October 2018 Restricted 15

16 A large number of small airports have few, if any transfer passengers and so many do not offer OSS. Those that do offer OSS typically process eligible passengers by exception, using a low cost, manual (escort) process. A high proportion of eligible passengers and their hold bags already benefit from OSS processes. While some medium-large airports have implemented OSS for all passenger flows, and most Schengen origin OSS flows have been implemented, a significant proportion of non-schengen origin OSS flows are not yet in place. This is often because major terminal infrastructure changes are required to enable OSS segregation, and the costs far out-weigh the benefits in terms of reduced security costs. Many airports stated that they would include OSS requirements in future terminal development plans, and States should encourage airports to do this, thus ensuring the application of OSS will continue to increase across the EU over time. Expanding OSS to new third countries Since airports require significant OSS passenger flows to justify expenditure on infrastructure changes to enable OSS, it is logical to focus on high volume transfer lanes for future OSS countries. The non-oss origins with the largest passenger flows into the EU are China, India, Russia Brazil and Ukraine. However, there may still be political and economic benefit in targeting countries with smaller passenger flows. Montenegro became an OSS country recently but found that many of its airlines passengers flying through EU airports did not benefit from OSS processes. Based on this experience, assessing whether hub airports in existing OSS countries are able to handle OSS flows from potential new States may be a useful part of the decisionmaking / engagement process, especially for smaller countries considering becoming an OSS State. Working with airports, both in existing and potential OSS States, to understand the timing and nature of future facility upgrades and how they fit with the OSS schedule will help provide transparency of achievable OSS benefits. Some States will inevitably set higher security standards than ICAO Annex 17, which provides a defacto baseline for recognition of equivalence of security measures. While making OSS more complex, other countries may still seek to establish equivalence with these States on a bilateral basis if the benefits are sufficient. Such discussions should be encouraged, as, even though they do not fit in with a global standard of equivalence, they can achieve the same outcomes improved security, reduced costs and an improved process for passengers. Similarly, more local and targeted unilateral recognitions of security equivalence, such as those established by Turkey and Qatar, should be encouraged to the same end. October 2018 Restricted 16

17 A. PROJECT BACKGROUND AND SET UP 5. Introduction One Stop Security is a recognition of equivalence of security measures arrangement that allows air passengers, baggage and / or cargo which have been security checked at an OSS approved departure origin, to transfer onto connecting flights without being subject to additional security checks. As the most widely known arrangement of this type, One Stop Security can be holistic, exempting passengers, cabin baggage, hold baggage and cargo from re-screening, or itemised, exempting only passengers & cabin baggage or hold baggage for example. The principle of OSS is to deliver speed and convenience, whilst achieving cost savings and maintaining an equivalent high level of security, by preventing the repetition of security checks to passengers, baggage and cargo which have remained in a secure environment since their point of departure Recognition of equivalence of security measures 1 For recognition of equivalence to operate, a formal arrangement needs to be in place. In the context of aviation security, recognition of equivalence is defined as the acceptance and formal approval by a State that security measures carried out in another State are at least equivalent, in terms of the security outcome, to its own security measures. States can enter into unilateral, bilateral or multilateral arrangements which can include all transfer operations between the States involved, or they may limit the scope to specific airports or terminal operations. In all cases, ICAO recommends States should ensure their national legal framework supports such arrangements and follow a clear process to recognition of equivalence. In the case of unilateral arrangements, even though only one State is recognising equivalence, all involved States must be full participants in the verification process. The recommended process is summarised in the following schematic: 1 Context for this section sourced in part from Recognition of Equivalence of Security Measures, ICAO, August 2015 (Restricted) October 2018 Restricted 17

18 Continuous Verification of equivalence Process Verification of equivalence (all involved States) Outcome Recognition of equivalence (unilateral, bilateral or multilateral) Decision Validation of equivalence Figure 4: ICAO Recognition of equivalence process The formal recognition document should detail the arrangement between the States involved and include a reciprocal review of appropriate documentation as well as a formal on-site assessment of security procedures. The document should also lay out a schedule for ongoing future operational assessments. To ensure transparency and preservation of equivalent security standards, there should be a process in place to inform affected States and stakeholders of new arrangements and to communicate future significant changes to the arrangements to stakeholders. This should include communication mechanisms in the event that a State no longer achieves equivalence so that flights from that origin can be re-classified as non-oss at receiving airports. Additionally, other one stop arrangements with participating States should be considered i.e. passengers and baggage may have already transferred through the origin State before transferring in your State, the origin State airport must therefore be able to demonstrate that effective, and equivalent, security controls of those transfer passengers and baggage have taken place One Stop Security background One Stop Security is widely established across the European Union (EU) and non-eu Schengen countries, enabled by application of a common set of aviation security rules set by the EU. The EU has also entered into One Stop Security arrangements with the United States, Canada, Montenegro, Singapore, Faroe, Greenland, Guernsey, Jersey and the Isle of Man; these arrangements vary in their application to passengers, baggage and cargo. October 2018 Restricted 18

19 These third country arrangements are achieved by virtue of Commission Implementing Regulation amending Regulation (EU) 2015/1998 of 5 November 2-15 which lays down detailed measures for the implementation of the common basic standards in aviation security. These arrangements are not bi-lateral agreements, rather they are unilateral decisions taken by each participating party, though cooperation and coordination between the countries is necessary to facilitate this. Supported by stakeholders including ICAO, airports, airlines and governments, initiatives are ongoing to expand the list of third countries participating in OSS and other recognition of equivalence security arrangements, with the most recent being the inclusion of Singapore since February this year. Further third country OSS arrangements are being explored with Japan, Hong Kong, Israel and Serbia. Recognised local benefits of OSS include removal of duplicate security checks, shorter connection times and fewer delays or missed connections, improved facilitation and passenger experience, cost savings, increased commercial opportunities and making the airport a more attractive choice for passengers and airlines. Broader benefits can also be attributed to One Stop Security. Economic benefits result from the savings in transfer security costs that are ultimately passed on to the passenger. Politically, there is the potential for OSS to contribute to stronger international relations as authorities and airports work together to define, assess and implement common security standards. Furthermore, better national security standards and processes make a country and its airports more attractive travel destinations and, from a transfer passenger perspective, would facilitate quicker and easier global travel. Despite formal OSS arrangements being in place at a country level, the degree of application at airports within participating States varies; some States have worked directly with national airports to encourage them to implement OSS, whereas others advise airport operators of the regulatory framework, but implementation is left to the discretion of the airport. As a result, active implementation at airport level differs considerably both geographically (e.g. partial OSS from specific origins) and in practice (e.g. OSS for baggage but not passengers). In reality, airports are often not set up to offer full One Stop Security and would need to make, for example, terminal and baggage infrastructure changes to enable it; low transfer volumes or limited flight connections may also make it difficult to justify this level of investment. Differences in the level of implementation at State and airport level alongside a range of reasons for the lack of implementation at airport level creates a rather complex picture of the current situation for One Stop Security implementation. October 2018 Restricted 19

20 As a result, o&i consulting was commissioned, following a formal tender process, by the European Commission to investigate and clarify the status quo of One Stop Security, identify reasons for the lack of implementation as well as to develop a cost-benefit analysis which may help facilitate an increased take-up driven by a better understanding of the financial picture alongside the other benefits. At the request of the EC, the study will focus on One Stop Security for Passengers and Cabin and Hold Baggage; therefore OSS for Cargo is excluded from this study. 5.2 Objectives of the study This study on economic and other benefits of one stop security arrangements has three core objectives, as specified by DG MOVE in the Invitation to Tender: 1. To understand the status quo of the application of One Stop Security; One Stop Security is an option and not an obligation; the study will collect information on the current application of One Stop Security arrangements in force now, both in the Member States concerned and the respective third countries. 2. Identification of reasons for lack of full implementation: To determine why One Stop Security has not yet been implemented by certain Member States, third countries or airports. 3. Cost-benefit analysis: To determine the costs and direct / indirect benefits of establishing One Stop Security, studying 15 airports across Member States and in certain third countries (hubs and smaller airports). The study will establish which type of airport will in particular benefit from One Stop Security (size, hub, regional airport) and will make recommendations on how to address the obstacles to full implementation which have / may be encountered. 5.3 Project scope The scope of the project is all Appropriate Authorities of European Union States, and third countries offering One Stop Security type arrangements as well as airports within those countries, regardless of whether One Stop Security has been implemented at those airports. Study participation was also extended out to other parties that have a vested interest in One Stop Security including airlines, ground handlers and industry associations. October 2018 Restricted 20

21 6. Approach With broad experience in airport security operations and in leading large research projects within the transportation sector, o&i consulting took a structured and inclusive approach to engaging the high number of stakeholders involved in the One Stop Security project. It was important to ensure that all relevant parties were appropriately represented in our research. Our knowledge of the complexities of aviation security along with an understanding of the intricacies of airside passenger flows and infrastructure enabled us to communicate with stakeholders at an appropriate level of detail and fully understand One Stop Security arrangements, stakeholder viewpoints, and the challenges faced by stakeholders in realising OSS operations. It was important from the early stages of the project to determine the core responsibilities of each stakeholder, and to have a clear approach to stakeholder communications. 6.1 Responsibilities A large number of stakeholders were involved directly and indirectly with the project. Responsibilities during the project were generally recognised as follows: European Commission, DG MOVE Commissioning body for the study Definition of project scope and objectives Stakeholder communication support o&i consulting Communications with the European Commission Stakeholder engagement and management Survey design, distribution, communications and analysis Pre-workshop communications, coordination and organisation Workshop leadership and facilitation Analysis of results Reporting of findings, conclusions and recommendations based on results from all participant feedback Participating States and Appropriate Authorities Internal survey distribution October 2018 Restricted 21

22 State survey completion Subject matter communications Participating airports Internal survey distribution Survey completion Local workshop organisation Engagement of relevant stakeholders for workshops Participation in discussions and workshops Validation of individual airport responses and details Sharing best practice Peer review of recommendations Airlines and airline associations (IATA and Airlines 4 Europe) Workshop coordination and participation Subject matter input Sharing of experience and opinion Sharing best practice Sharing of data ACI EUROPE Facilitation of airport communications Discussion organisation and participation Subject matter input Sharing of experience and opinion 6.2 Stakeholder engagement It was clear from the outset that the success of this project would be dependent on strong stakeholder engagement and a robust communications strategy. Given the number and broad range of parties that were to be integrated in our research, our strategy was based around communications to ensure that a consistent message was delivered across all stakeholders for each survey (primarily Appropriate Authorities and airports). We were aware that this channel would present some challenges, in particular failure by some parties to acknowledge our communications; we prepared accordingly for this. October 2018 Restricted 22

23 The EC provided support in obtaining the contact details of the Appropriate Authorities for the States relevant to the study. In terms of airport stakeholders, we engaged with our own airport contacts as well as receiving contact details for airports from ACI EUROPE and from some of the Appropriate Authorities involved in Objective 1 of the study. This combination of support enabled us to reach a wide audience. Objectives 2 and 3 required the study to collect information on the level of implementation at airports, reasons for lack of implementation and the costs and benefits associated with implementation of One Stop Security at an airport level. As part of the questionnaires distributed to identify the level of OSS implementation across a number of airports, o&i consulting asked airports if they would be happy to participate in a discussion or workshop on One Stop Security. A number of airports declined to participate. From those offering to participate, we created a list of potential airports for Objective 3 that included a range of airport types, incorporating criteria such as: Size: large, medium and small airports Location: A range of Member States and third countries that allow OSS Level of OSS implementation: full, partial, not implemented, including airports that are in the process of trialling new One Stop Security processes. The following table lists the 16 airports that agreed to participated in the study: Airport Airport 1 Amsterdam 9 Lisbon 2 Brussels 10 Madrid 3 Calgary 11 Munich 4 Copenhagen 12 Ostend 5 Dublin 13 Podgorica 6 Frankfurt 14 Prague 7 Heathrow 15 Toronto 8 Helsinki 16 Vilnius Figure 5: Airports participating in study October 2018 Restricted 23

24 Figure 6: Geographic spread of study airports October 2018 Restricted 24

25 Stakeholder communications Development of conclusions and recommendations Analysis European Commission 7. Methodology o&i consulting followed a structured project plan to facilitate gathering as much relevant information as possible to support the study. The following schematic provides an overview of the methodology used to conduct the study: Survey of the status of OSS application in Member States and third countries Stakeholders: Appropriate Authorities of relevant countries Identify audience Survey of the status of OSS implementation at airports and for objective 2 reason for not implementing Stakeholders: Airports of relevant countries Discussions with other relevant stakeholders: Appropriate authorities; airport and airline associations; airlines Identification of 15 airports for further investigation of the costs, benefits and obstacles to OSS Detailed discussions with airports Stakeholders: 15 airports from Member States and third countries Stakeholder workshop Discussion and peer review of conclusions and recommendations Identify audience Draft and final reports for objective 2 Presenting overall conclusions and recommendations; identifying which stakeholders benefit and possible solutions to obstacles Figure 7: Overview of the project methodology employed by o&i consulting October 2018 Restricted 25

26 7.1 Survey of the status of OSS application in EU Member States and Third Countries With 37 States to contact, we determined that the most appropriate means of communication and distribution of the survey would be via . We distributed a detailed introductory to the Appropriate Authority of each of the 28 EU Member States, as well as a number of Non-EU Schengen States that are SAGAS members and a number of third countries with existing OSS arrangements with the EU. The advised the authorities on the content and significance of the study and our role in the study as well as including a letter of recommendation signed by DG MOVE, a request for participation in the survey and a request for confirmation of the relevant State contact for the study. To ensure an objective assessment and enable comparison of responses from each participating State, o&i created a questionnaire in Microsoft Excel, including a range of standard questions covering key subject matter that we wished to obtain from each State. An example of the survey is provided in Appendix 1. The survey covered the following areas of interest: The States with which the responding Appropriate Authority allows OSS The categories (passenger, cabin baggage, hold baggage, cargo) for which OSS is allowed The States with which the responding Appropriate Authority would allow OSS if an agreement was in place The OSS status of airports in the responding State, for which categories, and if not implemented the reason why, if known Level of State airport collaboration regarding OSS and how it can be improved The State s view on benefits or disadvantages of OSS State participation in OSS initiatives We distributed the survey with completion guidance to the contacts provided by the European Commission or each authority. Where communications were not acknowledged or survey responses not received, we followed a schedule of follow-up communications, emphasising the importance of their participation to achieve broad State representation for the study. October 2018 Restricted 26

27 7.2 Survey of One Stop Security implementation at airports A similar approach was taken in collecting information on the status of One Stop Security implementation at airports. Based on the responses from the Appropriate Authorities and on our own research, we short-listed 51 airports, from Member States and relevant Third Countries, to contact and request participation in a second survey; the full survey is provided in Appendix 2. The airport survey contained questions on the following areas: Whether OSS is in place at the airport and for which categories (passenger and cabin baggage; hold baggage) The number of departing passengers in 2017 and the proportion of transfer passengers Whether the airport would be willing to engage in a fact-finding discussion regarding OSS at its facilities If OSS is implemented at the airport: The proportion of transfer traffic currently benefiting from it at the airport in question The proportion that could benefit from OSS if fully implemented What changes the airport had to make to implement OSS Estimated costs of implementation, if known The reason why OSS was implemented Benefits of OSS for the airport Any negative experiences Whether the airport intends to expand its OSS offering If OSS is not implemented at the airport: Why it is not implemented for an individual or all categories providing specific reasons for lack of implementation Whether the airport plans to implement OSS and the changes that would need to be made In our analysis of these findings, we also integrated the responses given by the Appropriate Authorities regarding the reason for lack of implementation at national airports. 7.3 Fact finding discussions with 16 airports 16 airports, as listed in Section 6.2, were selected for the fact-finding discussions from those who responded positively to a request to participate in this phase of the study. October 2018 Restricted 27

28 From these responses, we selected a range of airports that best represented a broad spectrum of airport characteristics (including size, geography, profile, transfer volumes). Having made initial contact by and telephone, we held the fact-finding discussions at the client airport or via telephone conference. During the workshops, we sought to explore in greater detail the responses given by the airport in the survey response, gain an understanding of the approach taken at the airport to OSS, how flows function at the airport, or why OSS is not possible, as well as the changes made at the airport to enable OSS, the associated costs (if known) and the benefits of OSS for the airport. Typically, the discussion participants provided an understanding of how OSS operates at the airport (if in place) including how OSS passengers are segregated from Non-OSS flows, and how OSS baggage is handled. If OSS was not or only partially in place, the conversation focused on how the flows are not suitable for OSS and how high the investment to make the necessary changes would be. The discussion then progressed to work through the survey responses, covering all areas identified in Section 7.2 and gather additional detail on costs and benefits of OSS, whether there are plans or potential to expand OSS at the airport, or the reason why it has not been implemented. 7.4 Fact finding with other stakeholders Since airports and States are not the only participants and beneficiaries of One Stop Security, we engaged with other parties that have an interest in OSS. This engagement was in the form of meetings and telephone conversations, and explored stakeholder experiences of OSS, benefits and disadvantages of OSS from their perspective, how they would like to see OSS develop in the future, and how they think the implementation of OSS at airports could be promoted and improved going forward. These stakeholders included: IATA Airlines for Europe (A4E) ACI EUROPE Transport Canada Montenegro Civil Aviation Agency TSA Additionally, some of these contacts were able to support us by providing detailed data relating to passenger traffic volumes which was extremely useful for the study. October 2018 Restricted 28

29 7.5 Analysis and consolidation of findings As responses to the State and airport surveys were received, we reviewed them and integrated the findings into a master document to enable us to analyse results and identify trends and common themes. Findings from the individual discussions with 16 airports were added to the database to create a detailed overview of OSS across all States and airports participating in the study. We identified key themes and trends related to OSS participation at State level and OSS implementation at airport level and developed charts and diagrams to illustrate our findings. From the more detailed information obtained from the study airports, we analysed the transfer passenger segment, and the proportion attributed to OSS for each airport, and looked at the overall potential across the study airports. We explored by airport size category the level of implementation of One Stop Security and costs / developments required at each airport to achieve this level of One Stop Security. We considered the range of OSS benefits cited by the study airports and if / how these benefits could be quantified. Moreover, to provide a global view of the potential size of the opportunity to expand One Stop Security across more markets, we analysed a detailed set of passenger volume data provided by IATA. 7.6 Stakeholder workshop In order to peer review and validate the findings, conclusions and recommendations drawn from the project, o&i consulting held a stakeholder workshop on 11 th September 2018, inviting all parties that have been involved in the study. The purpose of the workshop was to share the findings and conclusions with airports, authorities and industry associations and generate discussion on this content, exchange and understand viewpoints, and work towards an approach to improve involvement in One Stop Security at State level and implementation at airport level. Participants included airport operators, ACI EUROPE, IATA, A4E and the European Commission. Feedback and additional findings resulting from this workshop have been incorporated into this final report. October 2018 Restricted 29

30 B. FINDINGS 8. State participation in OSS Overview: Status quo at State level State participation: EU/EEA and Switzerland Within the group of EU/EEA and Swiss State respondents, all except the UK confirmed they allow OSS with all EU and all non-eu Schengen countries that also allow OSS for passengers, cabin baggage and hold baggage. Most States also confirmed that they would offer One Stop Security to any additional countries that enter into recognition of security measures agreements with the European Union in the future. State participation: Third countries One Stop Security is permitted as follows within participating third countries: Canada: Allowed at four Class One Canadian airports, (Vancouver, Calgary, Toronto and Montreal). At these airports, OSS is accepted inbound from Canadian domestic airports, EU / EEA States and Switzerland, and the USA only. Faroe Islands: Approved for Vagar airport Greenland: Approved for Kangerlussuaq Airport Guernsey, Jersey and the Isle of Man: All follow UK security rules and therefore do not offer OSS from origin countries other than the UK. Montenegro: OSS allowed with all participating States approved by the EU. United States of America: All EU/EEA States except the UK, Switzerland, and all third country OSS States except Jersey, Guernsey and the Isle of Man, allow OSS on transfer flights inbound from the USA. The USA does not allow OSS for passengers or bags arriving from any OSS State, with the exception of those specific foreign airports where established pre-clearance operations exist. The reasons for this are both security and legislation related. State participation: Potential future OSS States The EU is currently in discussions about extending OSS to Serbia, Israel, Hong Kong and Japan. Most responding States said that they would allow OSS with these four countries once approved by the EU. However, Bulgaria, Czech Republic and October 2018 Restricted 30

31 Luxembourg stated that they would not allow OSS with these countries; Germany stated that it would allow OSS only with Israel out of the current discussion States. Other States with arrangements to recognise the equivalence of security measures Although not part of EU One Stop Security, some third countries have entered into their own form of security equivalence arrangements for passengers transferring from certain origins; these are: Turkey: Ataturk Airport in Istanbul allows passengers and hold baggage transferring from certain origins to transfer onto departing flights without passing through security screening. Origin countries from which this process applies include the EU/EEA and Switzerland, and all of the non-eu third countries that operate OSS with the EU. The process applies to international to international transfers, but not to passengers transferring onto domestic flights. Qatar: Hamad International Airport (HIA), in collaboration with the Qatar CAA (QCAA) and Ministry of Interior (MoI) has implemented a form of OSS at HIA called the Exempt Transfer Process, whereby passengers and bags arriving from origins that have been granted exemption are able to pass through the transfer process without further screening checks. Currently, twelve airports are included as exempt transfer origins, enabling more than 10% of peak transfer passenger flows to bypass screening. Japan: OSS applies to hold baggage only from the United States to Japan, but not inbound to the USA from Japan. October 2018 Restricted 31

32 For an airport to be able to provide One Stop Security for transfer passengers the process must first be permitted at State level. A logical first step for the study was therefore to understand, at a State level, where OSS was allowed. With the core objective of understanding the status quo of application of One Stop Security at a State level, o&i consulting developed a questionnaire in Microsoft Excel to distribute to the Appropriate Authority of each of the 28 EU Member States, as well as a number of Non-EU Schengen States that are SAGAS members and relevant third countries with existing OSS arrangements with the EU. The questionnaire, as shown in the example in Appendix 1, was distributed to 37 states in total and asked each State to provide the following information: Confirmation of Member States and third countries with which the responding State allows OSS, or would allow if an agreement were in place, and for which categories (passenger, cabin baggage and hold baggage) An indication of which airports in the responding State have implemented OSS, and reasons for not implementing, if known Background on the involvement of the Appropriate Authority in an airport s decision to implement OSS; how collaboration between State and airport and implementation of OSS can be improved; perceived advantages and disadvantages of OSS. The survey received wide ranging participation; the table below indicates the number of responses received and the origins of the respondents. Distributed Responses Received Total Member States Non-EU Schengen 3 3 Third Countries 6 5 Table 3: Distribution and receipt of OSS survey at State level Of the 28 EU states, only France, Estonia and Slovenia did not respond. Similarly, we did not receive a response to the survey from Singapore. The following findings are based on the 33 responses received from EU, non-eu Schengen and third country Appropriate Authorities. In addition, through other sources we have obtained some understanding of the status of OSS in France, Slovenia and Singapore, so have included this information in the status quo findings. October 2018 Restricted 32

33 8.1 Status quo of OSS implementation at a State level From our research, we determined the current status of One Stop Security at State level. This is summarised as follows: Montenegro Israel Qatar Hong Kong ** Singapore * France, Singapore and Slovenia authorities did not respond to our survey, however other sources provided us with confirmation of the OSS status of these States ** Canada: OSS is currently allowed at four Class One Canadian airports, (Vancouver, Calgary, Toronto and Montreal). At these airports, OSS is accepted inbound from Canadian domestic airports, EU and Non-EU Schengen States, and the USA only. USA: All EU and Non-EU Schengen States except the UK, and all third country OSS States except Jersey, Guernsey and the Isle of Man, allow OSS on transfer flights inbound from the USA. The USA does not allow OSS for passengers or bags arriving from any OSS State, except from pre-clearance airports. Greenland and Faroe Islands: for specific airports only Figure 8: Current One Stop Security status of all relevant States October 2018 Restricted 33

34 The table below summarises exceptions to the main trend whereby most participating States allow OSS from all other participating States and will also allow OSS from new States as they become eligible. State Bulgaria EU Schengen EU Non- Schengen Non-EU Schengen 3rd Countries Figure 9: Flows where OSS is limited or not permitted at State level Potential future 3rd countries No OSS Canada 1 USA only No OSS Czech Republic No OSS Germany Israel only Luxembourg No OSS United Kingdom 2 USA France Estonia Singapore Slovenia No OSS 1. OSS only allowed at specified Class 1 airports UK Domestic origins only No OSS No OSS inbound to USA Guernsey, Isle of Man only No State response to survey 2. Includes Jersey, Guernsey and Isle of Man which follow UK regulation No OSS OSS implementation in Europe State Reponses Within the group of responding European countries, all but one State confirmed they allow OSS with all EU / EEA and Swiss nations that also allow OSS for passengers, cabin baggage and hold baggage. Most States also confirmed that they would offer One Stop Security to any additional countries that become eligible for OSS with the European Union in the future. October 2018 Restricted 34

35 * France and Slovenia authorities did not respond to our survey, however other sources provided us with confirmation of the OSS status of these States. Figure 10: Current One Stop Security status within Europe The United Kingdom was the only responding EU state which does not allow OSS; the UK has More Stringent Measures in place in addition to the EU common rules and therefore does not allow One Stop Security for flights arriving from international origins. The UK does allow OSS from domestic airports (including Jersey, Guernsey and Isle of Man) if the airports are appropriately set up to operate this way. It is our understanding that no more than four airports in the UK actually offer any form of domestic OSS. France, Estonia and Slovenia did not respond to the survey at a State level. However, based on feedback from other sources, OSS is allowed at a State level in France and Slovenia. We received no responses to our surveys at State level or from other stakeholders regarding OSS in Estonia OSS implementation in third countries State responses Canada: OSS is currently allowed at four Class One Canadian airports, (Vancouver, Calgary, Toronto and Montreal). At these airports, OSS is accepted inbound from Canadian domestic airports, EU/EEA States and Switzerland, and the USA only. October 2018 Restricted 35

36 Canadian State response The Government of Canada is supportive of the implementation of OSS and has established regulatory requirements for the implementation of OSS; however, the programme is voluntary at airport-level. In the State survey and during a follow-up conversation, Transport Canada stated that it had worked closely with the four Canadian Class One airports listed above to negotiate and implement OSS. Transport Canada continues to liaise with partners (domestic airports and other stakeholders) regarding current and possible future OSS arrangements. The potential of expanding the scope of one stop security style arrangements is being explored in Canada, looking at agreements with other countries and conducting analysis of inbound and transfer passenger volumes to identify other countries that would be attractive partners. The State s view is that the successful uptake of OSS requires commitment from the airports involved. Currently, the four Class One airports are not fully set up to offer all types of OSS transfer; this is infrastructure dependent. Two of the four airports have, however, integrated One Stop Security processes into terminal development programmes. From the Authority s perspective, the individual airports are responsible for facilitating the OSS programme; they feel the airports are more aware of their own needs in order to meet the requirements of OSS and are better suited to weigh up the costs and benefits to identify if OSS is a beneficial investment and subsequently make the necessary changes. The subject of investment has led to some difference in opinion between airport and State, when discussing the future expansion of OSS and attracting new countries. The airports feel that the Authority needs to sign more agreements to justify them making high cost infrastructure changes; at the same time the Authority states that the airports need to make these changes in order to attract other nations to enter into agreements. Faroe Islands: OSS is approved for Vagar airport Greenland: OSS is approved for Kangerlussuaq Airport Guernsey, Jersey and the Isle of Man: All follow UK security rules so do not offer OSS from origin countries other than the UK. October 2018 Restricted 36

37 Montenegro: Allows OSS with all participating States approved by the EU. Montenegro State response Upon being recognised as an OSS State by the EU, the Montenegro Civil Aviation Agency (CAA) asked it national airports (Podgorica and Tivat) to implement that decision. Both airports ensured that OSS compliant processes and procedures were in place for its transfer passengers; these currently involve escorting passengers directly to the departure gate. Whilst not ideal, this is feasible given the low volumes of transfer passengers at these airports; these processes will be improved when infrastructure limitations for transfer passengers are addressed during future airport developments. However, the issue for the Montenegro Civil Aviation Agency is not with the level of OSS implementation at its national airports, rather it is with the handling of Montenegro originating passengers when transferring in other OSS States. Speaking with a representative of the Montenegro CAA, he felt that of the airports with regular connections with Montenegro (Zurich, Paris CDG, Vienna, Rome Fiumicino, Frankfurt, Ljubljana), only Zurich has fully established OSS for outbound passengers from Montenegro. For some airports, the Montenegro CAA accepted that the necessary changes to enable full OSS for all participating States require a high level of infrastructure change and investment and are therefore not feasible in the short-term. For other airports, however, he felt that the changes would be simple (e.g. larger kiosks for border control personnel; change in procedure) but there appeared to be no willingness to do so due to the low transfer volumes originating from Montenegro. During this conversation it was made clear that Montenegro originating passengers are becoming disgruntled as they have been told that they are eligible for One Stop Security but are not able to experience the benefits of it at certain European airports. Accepting that Montenegro is a small country with low transfer volumes and that not all airports can offer OSS for all flows without high capex, the Montenegro Civil Aviation Agency states that it simply asks if an airport is in a position to offer OSS for its transfer passengers, it should do so, which is in line with EU regulation. October 2018 Restricted 37

38 United States of America: All EU/EEA and Swiss States except the UK, and all third country OSS States except Jersey, Guernsey and the Isle of Man, which apply UK security rules, allow OSS on transfer flights inbound from the USA. The USA does not allow OSS for passengers or bags arriving from any OSS State, with the exception of those specific foreign airports where established pre-clearance operations exist. The reasons for this are both security and legislative related. Why OSS is not allowed inbound to the USA US security requirements are different to those in the EU, for example in the US there is a requirement to screen all passengers shoes which is not the case in the EU. US authorities do not currently recognise EU common rules as being equivalent to their own. It is a legal requirement for all passengers arriving in the USA to present themselves, with their hold baggage, to Customs and Border Protection (CBP). Since a passenger can theoretically transfer an item from their hold baggage to their hand baggage at this point, it is necessary to re-screen all transfer passengers before they re-enter the sterile zone of the airport. Pre-clearance overcomes these issues, because US security requirements are met in the pre-clearance airport, and the passenger also presents to a US federal official at that departure airport, avoiding any requirement to collect bags when transferring in the USA Other arrangements for recognising the equivalence of security measures The ability to offer One Stop Security is a decision that can be taken unilaterally by a State. Although not part of the EU s One Stop Security family, Turkey s Ataturk Airport (IST) and Hamad International Airport (DOH) in Qatar both operate arrangements that recognise equivalent security measures, similar to one stop security, for transfer passengers arriving from certain origins. Japan also has an inbound arrangement for hold baggage arriving from the USA. Qatar: Hamad International Airport (DOH), in collaboration with the Qatar CAA (QCAA) and Ministry of Interior (MoI) has implemented a form of OSS at HIA called the Exempt Transfer Process whereby passengers and bags arriving from origins that have been granted exemption are able to pass through the transfer process without further screening checks. The eligible origins (specific airports not States) are October 2018 Restricted 38

39 selected following QCAA risk assessments carried out at the airports, with the cooperation of Qatar Airways. If security standards (including cargo screening and staff access controls as well as primary passenger and baggage screening) are deemed to be at least equivalent to those at HIA, then the airport can be proposed to the QCAA as a potential exempt transfer origin. Currently, twelve airports are included as exempt transfer origins, but these enable more than 10% of peak transfer passenger flows to bypass screening. Operationally, inbound aircraft from exempt transfer origins are allocated to one of 30 (out of 41) stands where there is a capability to direct transfer passengers straight to the international departure lounge, while terminating passengers follow the normal arrivals route one level below. Exempt transfer passengers are subjected to random and continuous ETD screening. While specific cost savings were not available, the airport estimated that the process avoids the requirement to add 10-13% more staff and equipment to its transfer screening process. This process also makes the transfer process more robust, with more passengers able to achieve short connections. [The airport also has a dedicated MCT product, whereby targeted groups of up to 30 passengers on tight connections follow the exempt passenger flow but are screened with X-ray equipment positioned before entry to the departure lounge.] The exempt transfer process also applies to hold baggage, which is typically on the critical path for transfers. It is important to note that despite arriving from exempt origins, passengers may still be subjected to secondary gate screening, depending on their outbound flight destination and additional security requirements required by that State (e.g. USA, UK). To that extent, these passengers still do not truly benefit from OSS. Turkey Ataturk Airport in Istanbul allows passengers transferring from certain origins to transfer onto departing flights without passing through security screening. Currently in Turkey, this is only offered at Ataturk Airport, although other airports are evaluating the opportunity. Origin countries from which the OSS process applies include the EU/EEA and Switzerland and all of the non-eu 3rd countries that operate OSS with the EU (USA, Canada, Montenegro, Faroe Islands, (Vagar airport), Greenland, (Kangerlussuaq airport), Guernsey, Jersey, Isle of Man). The process applies to international to international transfers, but not to passengers transferring onto domestic flights. The decision to allow the OSS process from these countries was taken October 2018 Restricted 39

40 unilaterally by the appropriate authority according to ECAC Regulations, and is a government driven initiative. In practical terms, physical separation of passengers is achieved by flowing them through different corridors from arrival gates via directional signs and using security officers to maintain segregation of OSS/non-OSS passengers. This process can also be applied to coached arrivals. OSS also applies to hold baggage, which is loaded onto a separate conveyor route to bypass screening. Minor infrastructure changes were made to enable OSS for passengers, but no cost information was available for the study. Some minor changes to enable baggage OSS were also required, specifically, the creation of a separate sortation area; costs for making these changes were not known but were not thought to be high. Ataturk Airport handled around 19m transfer passengers in 2017, of which 7.9% were eligible for OSS treatment, equating to over 1.5million annual transfer passengers (and their bags). Benefits derived from implementing OSS at Ataturk include improved facilitation, passenger convenience, reduced operational load on resources and equipment, and improved cost efficiency. Japan OSS applies to hold baggage only from the United States to Japan, but not inbound to the USA from Japan Potential future OSS states The EU is currently in discussions about extending OSS to Serbia, Israel, Hong Kong and Japan. Most responding States said that they would allow OSS with all of these countries once approved by the EU. However, Bulgaria, Czech Republic and Luxembourg stated that they would not allow OSS with these countries; Germany stated in its survey response that it would allow OSS only with Israel out of the current discussion States. It is not clear whether these views would change if and when the States in current discussions about OSS were accepted by the EU. In our discussions with airports, the origins with largest inbound transfer flows were deemed to be most important and to provide the most benefit. China in particular was mentioned a number of times as an origin which would add significant value if it became accepted as an OSS third country. Japan and Russia were also mentioned on a number of occasions; and South America in general was stated by airports with particularly high traffic from this region. October 2018 Restricted 40

41 8.1.5 States perspective on One Stop Security As part of our survey, we asked each State a series of additional questions in order to develop a deeper understanding of their perspective of One Stop Security and how the State works with its national airports in matters relating to OSS. Advantages and disadvantages of OSS All State respondents identified benefits to offering One Stop Security at airports. A range of benefits were quoted ranging from economic and national security benefits to airport and airline operational advantages. The most frequent responses were: better passenger facilitation, quicker connection times, and cost savings / resource economies. In terms of negatives, 24% of respondents identified downsides to OSS; these were typically infrastructure and logistics challenges for airports. Other negatives and concerns noted were implementing, monitoring and maintaining a sterile environment; ensuring airports collaborate with other key stakeholders; and lack of assurance that flights leaving their State would have met national security standards. Level of State involvement in an airport s decision to offer One Stop Security We asked the State / Authority what involvement it has in an airport s decision to offer One Stop Security. In most cases, the Authority is involved from a legislative and security compliance perspective and informs the airport operator of the decision, made at State level, to allow OSS from specific origin countries. For example: The Authority evaluates the compliance of airport structures and equipment to offer OSS. If the Authority/State has any objective reason (risk assessment), it may decide not to apply OSS. We haven't been directly involved, however we expect [our] airports to live up to the EU regulations on OSS. As the Appropriate Authority the only decision taken is from regulatory perspective i.e. allowing OSS. Some States, however, noted a higher level of collaboration with national airports. OSS tended to be in place at eligible airports in these States. They gave the following responses to our survey: October 2018 Restricted 41

42 Our airports are State owned, therefore persons delegated by the Ministry of Transport and Communications to the airport s Management Board have an influence on all decisions. The CAA issued the decision where it is recognised which State is considered as a State with equivalent measures, and asked airports to implement that decision. Our Government has championed OSS implementation and negotiation at all national airports currently practicing OSS arrangements. The Government continues to liaise with partners regarding current and possible future OSS arrangements. However, the program is voluntary. Improving OSS in the future We asked the participating States a number of questions regarding how the take up of One Stop Security can be improved and how they feel that States and airports can better work together to achieve this. The responses were varied, of which we provide a range of examples below. Suggestions by the States on how OSS take up at individual airports can be improved were centred around commitment at airport level to integrate OSS into future plans, infrastructure design and operational change. Specific responses included: From the State perspective there is no improvement possible because the OSSdecision depends on several airport specifics (passenger flow, minimum connecting time, passenger movement, parking position of aircrafts, etc). Therefore, it is the decision of each single airport to implement OSS or not. Normally OSS is a benefit for the airport. The successful uptake of OSS requires commitment from the airports. Individual airports are aware of their needs in order to meet the requirements of OSS and are better suited to make the necessary changes. Increased passenger flow through the airports and the realisation of costs vs. benefits will drive airports to pursue the implementation of OSS. It is more of an operational question to the airport operator. The State cannot oblige airport operators to make specific works in order to facilitate OSS. The above example responses, and indeed others received, suggest that once in place at State level, the airport is largely responsible for the implementation of One Stop Security October 2018 Restricted 42

43 due to the nature of its infrastructure and operations. However, when asked how the State and airport can better work together to improve the take up of OSS, we received a variety of broad ranging viewpoints that suggested a number of stakeholders are / should be responsible for and active in influencing OSS take up. A number of these focused on improved cooperation, communications and the exchange of information and best practices in forums at airport level (e.g. airport security committees) and at national level (e.g. national security committees). Other statements regarding stakeholder involvement in achieving better OSS take up included: As long as we as Appropriate Authority allow for implementation of OSS arrangements, there is not very much more we can do since we have no responsibility or influence on infrastructure investments etc. In some cases, the decision to offer OSS is taken by air carriers. If the Airport Operator and air carriers agree on the procedures to follow, the State will of course provide the necessary assistance. When the design and infrastructure of the airport allows OSS to be offered, its adoption should be made mandatory and not allow it to become the decision of the air carriers. The Government is supportive of the implementation of OSS and has established regulatory requirements for the implementation of OSS. However, the individual airports are responsible to facilitate the OSS program. There is also room for improvement in clarification of lines of responsibilities between air carriers, aerodrome operators, and other stakeholders. To summarise the above, States clearly agree that there are wide-ranging benefits to One Stop Security. However, while there is an expectation that State airports follow national and / or EU regulations on One Stop Security, it is from a State perspective, typically the airport that decides whether it is possible to offer OSS at its facility, with greater involvement in implementation at airport level from a handful of States. Understandably, process, procedures and infrastructure have to be in place to enable OSS passenger segregation and these are largely the responsibility of airport operators. With high capital expenditure involved in infrastructure development, this can clearly be a barrier to OSS implementation at airport level. When asked about how the future take up of One Stop Security can be improved, a number of States suggested that improved cooperation and communication between stakeholders is required, although the viewpoint remained that airports, and in some October 2018 Restricted 43

44 cases airlines, were ultimately responsible for implementing OSS. Overall, there is a clear opportunity to encourage greater collaboration between States and airports to find solutions, and if possible share responsibility, for driving OSS implementation. October 2018 Restricted 44

45 9. OSS implementation at airport level Overview: Status quo at airport level OSS implementation by airport size Based on the feedback submitted by the States and airports participating in this study, o&i consulting has summarised the level of OSS implementation, be it full, partial or none/negligible, by airport size category. This is shown in the table below: The degree of partial implementation covers a variety of situations, including Schengen only flows or other origin country limitations e.g. certain third countries only, passengers/cabin baggage or hold baggage only. Infrastructure constraints were the major reasons provided for not implementing full OSS for airports with more than 10m ppa, with lack of transfer passengers the reason for non-implementation at small airports. The table below summarises, by airport size, the key reasons for non-implementation and typical operating processes for partial and fully implemented OSS operations. Reason for lack of implementation If implemented, typical process Airport size (mppa) None / negligible Partial Full No / low transfer pax <10 Legislation (UK, CA) Manual escort No / low transfer pax Typically applied only within Legislation (UK) Schengen area of terminal, or Segregated flow Legislation (UK) manual process for exception Infrastructure: inability to segregate flows passenger groups (e.g. PRMs) Segregated flow Legislation (UK) >40 Infrastructure: inability to segregate flows Segregated flow October 2018 Restricted 45

46 Large hub airports The largest hub airports (>40 mppa) should benefit most from OSS implementation in terms of reduced security costs due to the high volumes of transfer passengers, but their size also presents challenges to full implementation, hence the large proportion with partial OSS in place. Larger airports are often multi-terminal (separate buildings) which creates a major inhibitor to providing full OSS, since passengers are typically not segregated when travelling between terminals. Infrastructure changes may also need to be completed in multiple terminals to accommodate all OSS flows. Expanding OSS to process third country flows in addition to Schengen origin passengers often requires significant infrastructure change to create the necessary segregated passenger flows; the cost of these changes is often high and may not be justified by the direct reduction in security costs that OSS delivers. While some airports have made the necessary changes already, others stated their intention to expand their OSS offering as part of future terminal developments. Airports with mppa (million passengers per annum) Airports with mppa appear to be more able to offer full OSS than the major hubs. These airports are more likely to be single terminal or single building operations, which eliminates the challenge of moving clean passengers between buildings while keeping them segregated from non-oss passengers. Facilities with mppa are often regional hubs rather than global, with a larger proportion of transfer passengers being Schengen Schengen than is the case with the larger hubs, simplifying implementation of OSS for these flows. These airports are also likely to receive lower numbers of Non-Schengen transfers; for airports which have not fully implemented an infrastructure solution for OSS, these passengers are typically either directed through passenger screening or bypass screening using a manual exception process. Airports with less than 10 mppa The smaller the airport, the more likely it is to have full or no OSS in place. Airports in this category have minimal or no transfer passengers. However, an airport may have a process in place that enables it to offer full OSS. This service is typically satisfied via a manual escorted process utilised on demand to enable pre-advised groups to bypass screening. October 2018 Restricted 46

47 In summary, Schengen to Schengen OSS flows are almost always facilitated, and some airports have invested significantly to increase OSS capability to all eligible passengers. For small airports, although the number of airports not offering OSS is high, the number of transfer passengers affected is very low. However, the cost of infrastructure changes to allow full OSS, particularly for larger, multi-terminal airports, has slowed the pace of full implementation beyond Schengen flows, with a number of airports holding off on expanding OSS capability to all eligible passengers until the necessary segregated flows can be integrated into future expansion plans. Our analysis indicates that OSS is currently implemented to 71% of its potential across EU/EEA and Swiss airports, limited by both State restrictions (in the case of the UK) as well as the airport limitations described above. October 2018 Restricted 47

48 With broad One Stop Security acceptance among States, we asked the Appropriate Authorities to indicate whether, to their knowledge, One Stop Security is in place at its national airports and to what extent - fully, partially or not at all. Their responses are summarised in the table below, which indicates by State how many airports have achieved each level of OSS implementation (full, partial or none), and where provided, the reasons why OSS has not been fully implemented. Country Austria Belgium Bulgaria Canada Croatia Cyprus Passenger & cabin baggage OSS implementation (# Airports) Full Partial None No response Czech Republic Denmark 4 Estonia Reason (& notes) Not transfer airports & Graz has OSS for hold bags but not passengers 1 airport has no transfer traffic, no other reasons provided 1 airport has no transfer traffic, 2 airports do not do OSS because of the infrastructure In place at 4 Class one airports only; one of which is currently trialling its new OSS process with 2 airlines, with the objective of fully implementing 4 airports not fully implemented because of airport design (infrastructure) and operational issues Infrastructure: Air carriers require passengers to report to arrivals transfer desk (airside), access is via the transfer screening checkpoint. OS for hold baggage 3 airports have no transfer traffic, no reason provided for 1 airport. OSS is carried out for transfer passengers at Prague from Schengen area, EEA and EU countries and Switzerland. All transfer passengers from third countries (including UK and Ireland) are required to go through security check. Finland 11 2 airports have no transfer traffic, no other reasons provided France 2 33 No State response (estimate for CDG) Germany No transfers or no reason provided for not operating OSS. Greece 2 19 No reason provided - no transfers? Hungary 5 BUD stated that they have minimal transfer passengers so in practice do not offer OSS Iceland 1 3 No reason provided Ireland 6 Italy airports have no transfers, 9 airports OSS is not applicable (reason not stated), MXP OSS for October 2018 Restricted 48

49 Country Passenger & cabin baggage OSS implementation (# Airports) Reason (& notes) Full Partial None No response passengers not hold bags, LIN & NAP complete OSS for hold bags not passengers. Latvia 2 Lithuania 4 Luxembourg 1 Malta 1 Montenegro 2 Netherlands 1 4 Not applicable at 4 airports (no transfers?) Norway 12 WAW offers OSS to all Schengen passengers and 11 1 only LOT Non-Schengen OSS passengers on Poland request, due to infrastructure constraints Due to infrastructural reasons (border control), 8 non-schengen OSS airports may not be Portugal exempted from screening Romania 7 Singapore 1 No State response; other sources used Slovakia 6 No reason provided Slovenia 3 No State response OSS offered (except for 3rd countries at BCN & MAD. 25 other airports OSS is offered for EU 27 flights with EU destination (and domestically flights). If the passenger has to pass border Spain control, OSS is not applied. Sweden 12 No transfers at 11 airports and infrastructure prevents OSS at ARN. Switzerland 2 1 Not applicable at BSL, since security at EuroAirport is subject to French Regulation International OSS in not applied in the UK - The UK applies a number of 'More Stringent Measures' over and above EU baseline standards 4 25 for passenger and baggage screening. UK allows OSS from most domestic airports if infrastructure allows. (airports not offering partial OSS have no transfer passengers). Our understanding is that UK no more than 4 UK airports offer domestic OSS. Full Partial None No response TOTAL TOTAL 323 airports Total % 28% 15% 45% 12% 100% Table 4: State response summary table regarding OSS implementation at airports It is important to recognise in the numbers above that the airports listed vary significantly in size, from major international hubs to small regional airports, so the proportion of airports participating in OSS does not reflect the proportion of transfer October 2018 Restricted 49

50 passengers benefiting from the process. The chart below shows the airports not offering any OSS by size the small airports typically do not offer OSS because they have no transfer passengers. Figure 11: Airports not offering OSS by size Only one airport offered passenger and cabin baggage OSS but did not offer OSS for hold baggage; nine airports offered OSS for hold baggage but not for passenger and cabin baggage. Reasons given for not offering passenger OSS in these cases were either infrastructure related (6) with the other two responses simply stating that passenger and cabin baggage OSS was not applicable at those airports. The chart below provides insight into the detail behind partial OSS implementation. October 2018 Restricted 50

51 Figure 12: Partial OSS implementation State responses 36 of the 48 airports offering partial OSS allow it for Schengen transfers only, making this by far the largest category of partial OSS provision. This is logical considering a typical Schengen Schengen transfer flow, where passengers disembark into a common departure lounge and then board the departing aircraft from the same area. Many airports have been designed or modified to accommodate the requirement for Schengen passengers to bypass border control, thereby creating a segregated passenger flow. Since all transfer passengers arriving from Schengen origins are by default also coming from OSS origins, the segregation required for Schengen also acts as a segregation for OSS. The UK allows OSS from domestic origins only, if airports have the necessary capability. However, most UK airports do not process transfer passengers so, only the larger airports are able to offer any form of OSS. For the purposes of the study we have assumed only those airports are able to offer domestic OSS. Prague Airport allows OSS for transfer passengers from Schengen area EEA and EU countries and Switzerland. All transfer passengers from third countries (including UK and Ireland) are required to go through a security checkpoint. OSS is allowed at four Class 1 international airports in Canada. OSS flows are permitted at these airports from Canadian domestic airports, the USA, EU/EEA countries and Switzerland. At Montreal Airport, hold baggage OSS is not offered as the OSS transfer volumes were determined to be too low to justify the investment required to modify the baggage system to divert bags past screening. Any decisions about further October 2018 Restricted 51

52 expansions of OSS are to be determined, pending a statistical study of current OSS impacts and a budgetary review. Canada may consider pursuing additional agreements if more Canadian airports invest in the required changes necessary to implement OSS. At present however, there are no discussions underway with other third countries, though countries which join the EU in the future are likely to be added to the range of accepted OSS States. Airport Int l Int l Int l - Domestic Domestic Int l Hold baggage Vancouver Y Y Y Y Montreal Y Y Y N Calgary Trial Trial Y Trial Toronto Y* Y* Y Y* *For T1 only Table 5: Permitted OSS flows at the four Canadian Class 1 airports The other two airports described as offering partial OSS are Frankfurt (FRA) and Paris Charles de Gaulle (CDG). o In Frankfurt, OSS is available in Terminal 1, where the infrastructure allows segregation of passengers to accommodate all OSS flows. This covers around 80% of transfer passengers. Only Schengen - Schengen OSS is possible in Terminal 2, but this is largely a point to point terminal with limited transfer traffic. No inter-terminal OSS process flows exist at Frankfurt. When new routes are introduced to the airport, the management team decides on stand location to accommodate OSS flows; a group decision between Airline, Apron and Terminal management determines whether to offer OSS (e.g. if there is only a small number of transfer passengers, it may be preferable not to offer OSS to them in order to benefit the terminating passengers with a better arrival process). o We have been unable to verify the level of OSS implementation at CDG with either the State or the airport. However, feedback from Air France indicated that for the majority of passengers, cabin and hold baggage transferring from France and/or EU/Schengen origins, OSS is possible (apart for some destinations based on the terminal of departure). For passengers and cabin baggage transferring from third countries (U.S., Canada, Singapore) OSS is not possible due to the specific infrastructure of the October 2018 Restricted 52

53 airport, though for hold baggage from these third countries, OSS works if the terminal they are transferring to is connected to the baggage conveyer system, which seems to be the case for the majority of flights. 9.1 Implementation by airport size To identify whether patterns of OSS implementation exist by airport size, we used the data provided by the States, updated using data from other sources where available (e.g. if an airport survey provided more detail than or different information to the State response) to analyse implementation by airport size Large airports - >40 mppa Eleven airports with more than 40 mppa were included in the study. Country UK Netherlands France* Germany Singapore* Spain Spain Canada UK Germany Airport Heathrow Airport Schiphol Amsterdam Airport Charles de Gaulle Airport Frankfurt Airport Changi Airport Madrid-Barajas Airport Barcelona Airport Toronto Pearson International Airport Gatwick Airport Munich Airport Italy Leonardo da Vinci-Fiumicino Airport * France and Singapore did not respond to State or airport surveys. Table 6: Airports with total annual passenger numbers greater than 40m The following chart describes the degree of OSS implementation at each airport. October 2018 Restricted 53

54 Figure 13: OSS implementation at large (>40 mppa) airports Three airports (Amsterdam, Munich and Rome Fiumicino) offer full OSS for passenger, cabin and hold baggage. Four airports (Frankfurt, Paris Charles de Gaulle, Madrid-Barajas and Barcelona) offer partial OSS; all are limited to what they can offer by airport infrastructure. Frankfurt, as described above, offers full OSS in one terminal, covering around 80% of passengers, and intra-schengen OSS in other terminals, but with no intra-terminal OSS, and Paris offers OSS for most Schengen transfers, plus some third country OSS for baggage. Madrid and Barcelona do not offer OSS for flights from third countries or for interterminal transfers due to the infrastructure and design of the airport and the locations where border controls are applied. The Spanish airports make use of manual processes to offer OSS to third country PRM passengers and families and also by exception when a large number of passengers on a flight have a connecting flight. Only the two UK airports do not offer OSS for hold baggage; these airports are only allowed to offer OSS for domestic flights due to more stringent measures in place in the UK. At all UK airports, domestic OSS (eg. Manchester > Heathrow > Detroit) may be possible but this depends on factors such as terminal layout. For example, transfer passengers arriving on domestic flights in Terminal 5 at Heathrow and departing from the same terminal do not need to pass through security screening, but domestic origin passengers arriving at other terminals or those transferring October 2018 Restricted 54

55 between terminals have to be re-screened. Heathrow does not provide OSS capability for hold bags, since the baggage system routes all bags through hold baggage screening. Toronto offers OSS from the USA, the EU and non-eu Schengen countries, but not other OSS third countries. Although we did not receive a response from Singapore, our understanding is that Changi cannot offer OSS in its main international terminal because security screening is carried out at the departure gate, so potential OSS passengers cannot be segregated from other passengers. Of the four airports offering partial OSS, we held more detailed discussions with Madrid- Barajas and Frankfurt which enabled us to understand how many more passengers could benefit from OSS if it was enabled for all eligible passengers. In the case of Frankfurt, 56% of transfer passengers currently benefit from one stop security. If all eligible passengers were able to follow OSS flows, this would increase to 75%. Similarly, in Madrid, 56% of transfer passengers currently benefit from OSS with the proportion increasing to 70% if OSS flows could be enabled for all eligible passengers. October 2018 Restricted 55

56 9.1.2 OSS implementation at airports handling mppa Information was received for 15 airports processing between 20 and 40m passengers per year. Country Airport Austria Vienna International Airport Belgium Brussels Airport Canada Vancouver International Airport Denmark Copenhagen Airport Germany Düsseldorf Airport Greece Athens International Airport Ireland Dublin Airport Italy Malpensa Airport Norway Oslo Airport-Gardermoen Portugal Lisbon Portela Airport Spain Palma de Mallorca Airport Sweden Stockholm-Arlanda Airport Switzerland Zurich Airport UK Manchester Airport UK Stansted Airport Table 7: Airports with total annual passenger numbers between 20 and 40m The following chart describes the degree of OSS implementation at each airport. Figure 14: OSS implementation at airports between 20 and 40 mppa October 2018 Restricted 56

57 Nine of the fifteen airports listed by participating States were said to offer full OSS for passengers, cabin and hold bags. However, our research discovered some possible discrepancies in this information whereby full OSS implementation as described at State level still has some limitations following discussions with the airports. For example: o Vienna responded to the airport survey stating that 66% of transfer passengers currently benefit from OSS but that this would increase to 70% if OSS was fully implemented for all eligible passengers, implying that a small proportion of eligible passengers are not currently receiving the service. This was validated by discussions with the Montenegro Civil Aviation Agency who stated that their passengers did not receive OSS benefits when travelling through Vienna. o Brussels offers full OSS to all eligible flights, but it is sometimes not offered from a late arriving UK origin flight as border staff have limited resource available at this time. o Dublin is not set up for OSS in Terminal 1, however this terminal is mainly point to point traffic so affects minimal passenger numbers Two airports (Palma and Lisbon) offer OSS for Schengen arrivals only. Manchester Airport does not offer OSS from non-uk origins due to more stringent measures (MSMs) in place in the UK. Vancouver offers OSS from the USA, the EU/EEA and Switzerland, but not from other OSS third countries. Of the other airports in this size category, Arlanda does not offer OSS (except for hold baggage), due to infrastructure constraints, and Stansted does not offer even domestic OSS due to low transfer passenger numbers OSS implementation at airports handling mppa Information was received for 24 airports processing between 10 and 20m passengers per year. Country Canada Canada Czech Republic Finland France Germany Airport Montreal-Pierre Elliott Trudeau International Airport Calgary International Airport Prague Václav Havel Airport Helsinki-Vantaa Airport Saint-Exupéry Airport Berlin Tegel Airport October 2018 Restricted 57

58 Country Airport Germany Hamburg Airport Germany Berlin Schönefeld Airport Germany Cologne/Bonn Airport Germany Stuttgart Airport Hungary Budapest Ferenc Liszt International Airport Italy Orio al Serio Airport Italy Venice Marco Polo Airport Poland Frédéric Chopin Airport Portugal Francisco Sá Carneiro Airport Romania Henri Coanda International Airport Spain Málaga Airport Spain Alicante Airport Spain Gran Canaria Airport Spain Tenerife South Airport Switzerland Geneva International Airport UK Luton Airport UK Edinburgh Airport UK Birmingham International Airport Table 8: Airports with total annual passenger numbers between 10 and 20m The following chart describes the degree of OSS implementation at each airport. Figure 15: OSS implementation at airports between 10 and 20 mppa Almost half of the airports in this size category were stated as offering full OSS capability. October 2018 Restricted 58

59 The four Spanish airports in this size category are primarily point to point airports with minimal transfer passengers. Where there are transfer passengers, OSS is offered for EU flights with EU destinations (we understand this to mean Schengen to Schengen transfers) and for domestic flights. If the passenger has to pass border control, OSS is not applied. Similarly, Francisco Sá Carneiro Airport (Porto) in Portugal offers OSS for Schengen passengers, but no reason was provided for this limitation. Lyon Saint-Exupéry Airport was the only French airport response received in relation to the study. OSS is possible for all Schengen transfer passengers at Lyon, which covers most OSS eligible passengers. The airport stated that it does not have many international connecting flights (non-schengen) and does not expect to develop this line of business in the near future. Lyon has implemented OSS with Air Canada for hold baggage of passengers transferring onto Schengen Flights, but not for passengers. We understand that only one of the three UK airports in this group (Birmingham) offers an OSS process for passengers transferring from domestic flights; UK airports only allow OSS from UK domestic origins due to UK More Stringent Measures (MSMs) where infrastructure allows and where the airport has transfer passengers. The two Canadian airports in this category only accept OSS passengers from the USA, the EU/EEA and Switzerland, but not from other third countries. In Calgary, OSS is still operating in a trial phase with two airlines participating (Air Canada and WestJet). Berlin Schönefeld does not offer OSS, and our understanding is that Luton and Edinburgh airports in the UK do not offer any OSS either. October 2018 Restricted 59

60 9.1.4 OSS implementation at airports handling 1-10 mppa 134 airports between 1 and 10m passengers per annum were included in State responses to the OSS survey. Table 9: Geographic spread of study airports in 1-10m ppa category The following chart describes the degree of OSS implementation at each airport. Figure 16: OSS implementation at airports between 1 and 10 mppa October 2018 Restricted 60

61 A marked difference in OSS implementation exists as airport size reduces below 10 mppa. More than half of the airports do not offer any form of OSS. Of these 78 airports: o 37 do not offer OSS because they have no transfer passengers (this includes the 14 UK airports, where, although OSS is potentially allowed for domestic transfer passengers, airports in this size category are unlikely to have any transfer passengers or transfer facilities to process them). o 8 stated that OSS was not applicable (which we understand to mean there are no eligible transfer passengers) o 11 airports were in Canada, where OSS is not allowed other than at 4 Class 1 airports o 5 airports stated infrastructure as a reason and o 16 did not provide a reason. 28% of airports were stated as offering full OSS. With airports of this size and smaller, offering full OSS does not necessarily mean establishing a complex set of passenger and bag flows to automatically segregate and direct OSS passengers. Many of these airports will not have dedicated transfer passenger facilities, with the natural passenger flow to be for passengers to land themselves and then proceed as departing passengers, with OSS achieved through manual intervention processes. For example, at Thessaloniki in Greece, there is no separate transfer passenger route, but for the small number of transfer passengers passing through the airport, it is possible to instigate a manual process whereby OSS passengers are taken directly from the inbound flight into the departure lounge, avoiding the need to land themselves first and be re-screened. These types of processes are more likely to be carried out for tight connecting passengers, families and PRMs on an ad hoc, on demand basis and can also be applied to hold baggage. 14% of airports (all located in Spain and Portugal) provide OSS for Schengen connections only. October 2018 Restricted 61

62 9.1.5 OSS implementation at airports handling less than 1 mppa 101 airports handling less than 1m passengers per annum were included in State responses to the OSS survey. Country Count of Airports Country Count of Airports Austria 3 Italy 7 Belgium 3 Latvia 1 Bulgaria 1 Lithuania 2 Canada 7 Netherlands 2 Croatia 4 Norway 1 Czech Repubic 4 Poland 5 Denmark 1 Portugal 3 Finland 9 Romania 3 Germany 1 Slovakia 5 Greece 12 Spain 4 Hungary 4 Sweden 5 Iceland 3 UK 8 Ireland 3 Grand Total 101 Table 10: Table 6: Geographic spread of study airports in <1m ppa category The following chart describes the degree of OSS implementation at each airport. Figure 17: OSS implementation at airports with less than 1 mppa October 2018 Restricted 62

63 Very small airports (<1 mppa) follow a similar pattern to those in the 1-10m size category up with 61% of the airports stating they do not offer OSS and a third offering full OSS. The Schengen OSS airports are all located in Spain and Portugal. Based on the airport size, it is likely that all of the airports in this category have minimal or no transfer passengers, but any passengers processed via OSS are likely to follow a manual escorted process to bypass screening Summary of OSS implementation by airport size Figure 18: OSS implementation summary by airport size The chart above summarises the variation in OSS implementation by airport size. The largest hub airports (>40 mppa) clearly stand to benefit most from OSS implementation due to the high volumes of transfer passengers, but their size also presents challenges to full implementation. Schengen to Schengen flows are typically easiest to implement for Schengen hub airports, since passenger flows are already segregated; however, other transfer flows can also be made OSS compatible, typically through either infrastructure or process change. The fact that larger airports are often multi-terminal (separate buildings) creates a major inhibitor to providing full OSS, since passengers are not typically segregated when travelling between terminals. Medium sized airports appear more able to offer full OSS than the major hubs. This could be because: o The airports are typically single terminal (or at least single building) operations, eliminating the challenge of moving clean passengers between buildings while keeping them segregated from non-oss passengers. October 2018 Restricted 63

64 o The airports are more likely to be regional hubs than global, with a larger proportion of transfer passengers being Schengen to Schengen than is the case with the global hubs. Airports located within the Schengen area had to be designed and or modified to accommodate Schengen flows, which did most of the work to allow OSS for a large proportion of transfer passengers. [Passengers are segregated to comply with Schengen requirements and since none of these passengers need to be re-screened, it is straightforward to implement OSS for these flows.] o Expanding OSS from Schengen to full OSS often requires significant infrastructure change to create the necessary additional segregated passenger flows. Some airports have implemented the necessary changes already, either specifically to enable OSS or as part of a larger terminal expansion. Those who have not done so, and currently only offer Schengen OSS, typically cannot cost justify the necessary changes as part of an OSS business case unless they are incorporated into other expansion plans; in such cases, a number of airports stated that they would expand their OSS offering when terminal expansion plans were introduced. Small airports (<10 mppa) typically have very low numbers of transfer passengers, if any. The majority of these airports state that they offer either full OSS or no OSS. For those offering full OSS, the service is typically delivered through process rather than infrastructure change, for example by using airport staff on demand to escort pre-advised groups of passengers to bypass screening. Although the number of airports offering no OSS is high, the number of transfer passengers affected is very low. In summary, OSS is generally allowed at a State level across the EU/EEA, Switzerland and participating third countries, with the major exceptions being the UK which only allows OSS from (most) domestic origins, Canada which allows OSS at four Class 1 airports only and the USA which does not allow any inbound OSS. OSS implementation at an airport level is more varied. For airports of sufficient size to handle significant volumes of transfer passengers, all appear to facilitate OSS to the maximum extent possible within certain infrastructure constraints. Schengen to Schengen OSS flows are almost all facilitated, and some airports have invested significantly to increase OSS capability to all eligible passengers. However, the cost of infrastructure changes necessary to allow full OSS has slowed the pace of full implementation, with a number of airports holding off on expanding OSS capability until the necessary segregated flows can be integrated into future expansion plans. October 2018 Restricted 64

65 10. Reasons for lack of OSS implementation Overview: Reasons for lack of OSS implementation The chart below provides a summary of the reasons for lack of full OSS implementation at airports within the States that responded to the survey. Not permitted in CA, 18, 9% Reasons for airports not fully implementing OSS Other, 1, 1% UK MSM: Domestic only, 4, 2% CA State Limitations, 4, 2% Infrastructure, 14, 7% No transfers, 64, 33% Border control, 33, 17% No reason provided, 42, 22% Not applicable, 14, 7% No or low transfer volumes Assuming not applicable responses meant there were no applicable transfer passengers at the airport, 40% of airports which have not fully implemented OSS cited lack of transfer passengers as the reason. All but three of these airports handle less than 10 mppa. The three larger airports were all UK airports without dedicated transfer facilities and where only domestic OSS is allowed. State regulation United Kingdom: The UK applies a number of 'More Stringent Measures' over and above EU baseline standards for passenger and baggage screening, and because there is a 'host state responsibility' for aircraft leaving the UK, it is not possible to guarantee that flights leaving the UK which were subject to non-uk screening would meet the same security standards as flights screened to UK standards. October 2018 Restricted 65

66 The UK therefore allows OSS only from most domestic origins, including the Crown Dependencies of Jersey, Guernsey and the Isle of Man. Our understanding is that no more than 4 of the 29 UK airports handle transfer traffic and have the capability to provide domestic OSS. Canada: In Canada, the State only allows OSS at four Class 1 airports (Montreal, Calgary, Toronto and Vancouver), and at those airports OSS only applies to domestic flights, flights from the EU/EEA, Switzerland, and the USA. United States of America (US airports not included in the above chart): One Stop Security is not permitted inbound into the USA for both legal and security equivalence reasons. The only exceptions are those specific foreign airports where there are preclearance operations in place. The US did look into establishing a pilot OSS airport several years ago, but the infrastructure and resource challenges associated with segregating passengers arriving from OSS origins from those arriving from non-oss origins proved to be too great. These complexities resulted in the pilot being abandoned at the concept stage. Border control and infrastructure limitation Introduction of the Schengen area required airports to make changes to segregate Schengen passengers so they could avoid border controls. By creating this separate flow, most airports in the Schengen area by default created a flow enabling OSS for transfer passengers from Schengen origins. This explains why many European airports which have partially implemented OSS, have done so for the Schengen area only. Expanding OSS to passengers from non-schengen origins (and introducing any form of OSS for non-schengen airports) requires a method of segregating flows of inbound transfer passengers from OSS and non-oss origins. It may physically be difficult to achieve this without significant investment due to the nature of the terminal infrastructure or the location of border control, and there is often limited financial benefit to be derived since much of the OSS traffic is from Schengen origins where the benefits have already been realised. October 2018 Restricted 66

67 Three primary methods of segregating OSS passengers were identified in the study: 1. A manual escort process typically used for low volume / ad hoc groups of passengers in small airports and in large airports for some passengers where not all OSS flows are otherwise feasible. Reasons why airports have not implemented this method as a general solution to enable full OSS include: o Increased operational costs particularly as volumes increase o Reluctance to introduce non-standard processes, which increase the risk of failure. 2. A separate corridor from arrivals gates in the non-schengen arrivals area which flows non-oss passengers through a security screening area before re-joining the non-schengen OSS flow. There are a number of reasons why airports have not simply added a corridor to their gate areas to segregate OSS flows, including: o Space limitations in existing buildings prevent the additional corridor from being added o Reduction in effective stand capacity and impact on punctuality caused by restrictions on simultaneous use of adjacent stands o Resource cost associated with manually opening / closing / guarding doors to prevent passenger cross flows and sweeping areas after arrival of non-oss flights and / or capital cost of implementing an automated process to achieve the same objectives 2. An additional floor in the terminal building can be added to provide a separate flow for OSS and non-oss passengers and still allows independent use of aircraft stands, overcoming some of the limitations of the corridor solution described above. Creating another level in a terminal (or terminals) is an expensive solution and is not physically feasible for some airports based on existing infrastructure. The business case for making such a change purely for OSS is often difficult to make, especially if the number of passengers benefiting is not large. As such, this type of solution is more likely to be incorporated into a new terminal design. Some airports which have not fully implemented OSS stated in survey responses that they would look to implement full OSS capability into future terminal upgrades / builds. October 2018 Restricted 67

68 Having obtained a high-level understanding at a State level of reasons for nonimplementation of OSS, we developed a second, more targeted questionnaire to distribute directly to airports to understand more about the OSS status at their airports and, if relevant, the reasons for not or only partially implementing. The survey is described in greater detail in Section 7.2: Methodology and a copy of the survey template is shown in Appendix 2. The survey was distributed to a total of 51 airports in EU Member, Non-EU Schengen and Third States. When preparing this questionnaire, we also took the opportunity to request additional information to include in the cost-benefit analysis phase of the project. We received responses from 28 airports, including the 16 with whom we later held more detailed discussions. We used the information from the surveys to obtain a comprehensive understanding of the reasons why airports have not fully implemented OSS. Combining these responses with those received from the State authorities, we were able to develop the following overview of the reasons for lack of OSS implementation at airports. Not permitted in CA, 18, 9% Reasons for airports not fully implementing OSS Other, 1, 1% UK MSM: Domestic only, 4, 2% CA State Limitations, 4, 2% Infrastructure, 14, 7% No transfers, 64, 33% Border control, 33, 17% No reason provided, 42, 22% Not applicable, 14, 7% Figure 19: Distribution of the reasons OSS is not fully implemented at airports within States participating in the study These reasons are explored in more detail in the following sections. October 2018 Restricted 68

69 10.1 Lack of transfer passengers Given that the responses cover airports of all sizes, including small regional point-topoint airports, it is understandable that, in terms of airport numbers, low or no transfer volume is the main reason provided for the lack of OSS implementation. Including the not applicable category, which we understand to mean that OSS is not applicable due to lack of transfer passengers, 28% of all airports for which we received a response in the study fall into this group, where there is no reason for the airports to introduce OSS. The chart below illustrates, by airport size, which airports do not offer OSS for this reason. Figure 20: Airports not offering OSS due to lack of transfer passengers - by size As the chart clearly shows, almost all of the airports not implementing OSS for this reason are small airports, with the others being UK airports which are not allowed to offer OSS for anything other than domestic passengers and are primarily point to point airports. Reviewing full OSS implementation by airport size provides an interesting alternative perspective on OSS at small airports. October 2018 Restricted 69

70 Figure 21: Full OSS implementation by airport size Acknowledging that there are more small airports in the study than large airports, it is clear that a large number of small airports appear to offer either full OSS or no OSS. Those offering full OSS may not in reality have any (or many) transfer passengers but may simply process them as OSS on a manual basis as and when required. Ostend was one of our study airports which provides an example of how a small airport can offer either full and no OSS. Manual processes Ostend Airport (OST, <1 mppa) does not currently offer OSS because it has no transfer passengers. However, in the period following the Brussels terrorist attack, OST accepted some additional flights, which did carry a low number of transfer passengers. Because of the low numbers, it was possible for the airport team to handle these passengers using manual OSS processes, which can work for a small airport, but would not be as feasible solution for large OSS passenger volumes. As a consequence of this experience, during a period of terminal development, Ostend Airport chose to make provision for potential future transfer passengers by integrating an OSS transfer route at relatively low cost. Such manual processes for handling low volumes / infrequent occurrences of OSS eligible transfer passengers can also be used in a targeted way at larger airports. At Madrid-Barajas Airport, PRM passengers and families on transfer flows not currently covered by the standard OSS process are processed manually on occasions, and at October 2018 Restricted 70

71 Warsaw Airport, the airport manually processes non-schengen LOT transfer passengers via OSS when requested by the airline State regulation Three of the States currently included in the OSS arrangements restrict implementation to some extent in their home countries United Kingdom The UK applies a range of 'More Stringent Measures' over and above EU baseline standards for passenger and baggage screening, and because there is a 'host state responsibility' for aircraft leaving the UK, it is therefore not possible to guarantee that flights leaving the UK which were subject to non-uk screening would meet the same security standards as flights screened to UK standards. The UK therefore allows OSS only from domestic origins. The Crown Dependencies of Jersey, Guernsey and the Isle of Man apply in full the UK NASP, including all MSMs over and above the EU baseline, so these are generally treated as domestic. An exception is that in the case of some smaller (eg. Scottish Highlands and Islands) airports, rescreening may be required at UK mainland airports before further transfer is allowed. In order to allow full OSS in the UK, the EU baseline screening standards would need to be raised to UK levels (or there would have to be a lowering of the level of threat to civil aviation which resulted in the UK withdrawing its MSMs). Similarly, to allow OSS from third countries, the UK would require assurance that UK equivalent screening standards were consistently met. Of the 29 UK airports which have not fully introduced OSS due to MSMs, most do not handle transfer passengers so could realistically be placed in the no transfer passengers category. Our understanding is that no more than four of the UK airports handle transfer passengers and may facilitate domestic OSS. Of the UK airports, only Heathrow was included in the airport survey and subsequent study. Heathrow s Terminal 5 was designed with domestic OSS in mind, and passengers arriving on domestic flights into T5 and departing from T5 are not re-screened. All other transfer flows are subjected to re-screening (including domestic T5 to other terminal transfers), so the net benefit of OSS is relatively small, though still significant because of the total volume of domestic origin passengers transferring through T5. As with passengers, there is no requirement to re-screen transfer bags from domestic origins at Heathrow. However, all of the airport baggage systems have been designed to October 2018 Restricted 71

72 screen 100% of bags and the cost of re-designing systems to bypass a relatively small number of bags away from hold baggage screening (HBS) was not considered to be cost effective. All other UK airports have much lower transfer volume than Heathrow, so terminals are unlikely to have been designed to accommodate domestic OSS. Some of these airports may use a manual OSS process for domestic transfer passengers, though this has not been confirmed as part of the study. We understand from our workshop with Heathrow that discussions are ongoing at a senior level between the UK and USA authorities in relation to possible one stop security type arrangements between the two countries. The airport has not yet investigated in detail the cost or feasibility of how this would be implemented, but US flights currently arrive and depart from multiple terminals, which would make segregated flows challenging to achieve Canada In Canada, the State only allows OSS at four Class 1 airports (Montreal, Calgary, Toronto and Vancouver), and at those airports OSS only applies to inbound domestic flights, flights from the EU/EAA, Switzerland and the USA. Other OSS third countries are likely to be included only if they join the EU, and in the case of Singapore, any decisions about further expansion of OSS are still to be determined, pending a statistical study of current OSS impacts and a budgetary review. Canada may consider additional OSS arrangements if more Canadian airports invest in completing the required changes to implement OSS. We received survey responses from Toronto, Calgary and Montreal airports, and held more detailed workshop discussions with Toronto and Calgary to understand their experiences with introducing OSS. OSS is being rolled out in Calgary on a trial basis but is in place in Toronto and Montreal. Infrastructure limitations which restrict the extent of the OSS offering are discussed in the report section addressing infrastructure reasons for non-implementation United States of America As described earlier in Section 8.1.2, One Stop Security is not permitted inbound into the USA for legal and security equivalence reasons. The only exceptions are those specific foreign airports where there are preclearance operations in place. U.S. law requires passengers arriving from an international airport to present themselves to a Federal customs official at the arriving port of entry. Passengers must present October 2018 Restricted 72

73 themselves with all their property, including checked luggage. Following customs and immigration, passengers recheck their luggage for any connecting flight. Because they have had access to their checked luggage, and thus potentially to items allowed in checked luggage but prohibited in accessible property (carry-on luggage), all transferring passengers must go through security screening before being allowed into the sterile area which would negate any potential benefit of OSS. The US did look into establishing a pilot OSS airport several years ago, but the infrastructure and / or resource challenges associated with segregating passengers arriving from OSS origins from those arriving from non-oss origins proved to be too great. The pilot was abandoned at the concept stage so no detailed cost estimates for implementation are available. The closest the USA gets to allowing OSS inbound to the USA is from Pre-Clearance airports, which in the EU/EAA are currently only Dublin and Shannon airports (though the United States Government is looking to expand if possible and is in discussion with Amsterdam and Stockholm). At these agreed locations, passengers clear customs and immigration at the departing airport and their hold baggage is transferred automatically at the arriving U.S. airport; passengers arriving on a pre-cleared flight do not undergo additional security screening as they remain in the sterile area for any transferring flight. Pre-clearance partly overcomes the issues which OSS presents, by ensuring: Passengers are screened to US standards (carried out by additional screening at the gate in Dublin and by screening all departing passengers to US equivalent standard in Shannon) Hold bags are checked by viewing HBS images held at the departing airport The necessary checks are conducted by US Federal officials (CPB staff are based at the pre-clearance airports) However, this process is not true OSS since passengers are subjected to additional screening at the origin airport to meet US requirements because the US does not recognise EU security standards as equivalent Border control and infrastructure limitations Border Control and Infrastructure jointly represent 24% of the reasons given for nonimplementation of full OSS. These typically relate to the design and location of border control facilities restricting OSS flows, the challenges associated with creating segregated routes for OSS flows due to the structure and layout of terminals, and October 2018 Restricted 73

74 baggage infrastructure design. However, in some instances, border control may relate to lack of available resource to man additional border check-points. To understand why infrastructure can be an impediment to OSS implementation, it is important to first understand the process flows and changes required for transferring passengers and hold bags at OSS enabled airports Passenger transfer flows at OSS airports Recognising that all airports are different and that it is impossible to illustrate in a single diagram how passenger flows are organised in all airports, the following schematics describe typical passenger transfer flows in an OSS enabled (single terminal) Schengen airport: Figure 22: Transfer flows in an OSS airport October 2018 Restricted 74

75 Combining these separate flows into a single flowchart illustrates that the key differences in flows, i.e. where infrastructure or process changes are required, take place on arrival. Figure 23: Flow segregations required for OSS Typical infrastructure changes required to enable passenger OSS Introduction of the Schengen area created a requirement for airports to make changes to segregate Schengen passengers so they could avoid border controls. By providing this separate flow, most airports in the Schengen area by default created a flow enabling OSS for transfer passengers from Schengen origins. Many airports direct terminating passengers from Schengen origins through the departure lounge area to baggage reclaim, thereby also eliminating any requirement to segregate transferring and terminating passengers. This simplicity of passenger flow explains why many European airports which have partially implemented OSS, have done so for the Schengen area only. Expanding OSS to passengers from non-schengen origins (and introducing any form of OSS for non-schengen airports) requires a method of segregating flows of inbound transfer passengers from OSS and non-oss origins. This can be achieved in a number of ways, but the cost and challenge of implementation is very much dependent on the layout of the airport. For medium sized airports where much of the transfer passenger traffic is intra-european, the Schengen-Schengen OSS processes are addressed as described above, leaving a relatively small amount of non-schengen transfer traffic. October 2018 Restricted 75

76 The fact that implementing Schengen OSS has been relatively straightforward for many airports in the Schengen area has meant that moving to full OSS is more challenging, since this is where significant infrastructure cost has to be incurred, but the benefit / payback is often only for a relatively low number of (non-schengen) passengers. Three primary methods of segregating OSS passengers were identified in the study: 1. A manual escort process typically used for low volume / ad hoc groups of passengers in small airports and in large airports for low numbers of passengers where not all OSS flows are otherwise feasible. Reasons why airports have not implemented this method as a general solution to enable full OSS include: o Increased operational costs particularly as volumes increase o Reluctance to introduce non-standard processes, which increase the risk of failure. 2. A separate corridor from arrivals gates in the non-schengen arrivals area which flows non-oss passengers through a security area before re-joining the non- Schengen OSS flow. In the schematic below, Schengen arriving passengers disembark directly into the Schengen zone, where they can either proceed directly to baggage reclaim and exit, or in the case of transfer passengers, proceed directly to the departure gate (via passport control for non-schengen departures). Non-Schengen OSS passengers disembark into the non-schengen gate area, where they can transfer directly onto a non-schengen departure, or pass through border control to arrivals or Schengen departures. Non-Schengen non-oss passengers need to be directed on a separate route either via security screening (transfer passengers) or via a separate passport control for terminating passengers, ensuring they do not mix with OSS passengers until they have been screened, and do not mix with Schengen passengers until they have passed through passport control. October 2018 Restricted 76

77 Figure 24: Example of "corridor" segregation to facilitate OSS In the example above, the non-schengen gates are split into three zones, where some gates are dedicated to OSS flights and some to non-oss flights with a number of flex-gates which can be used for either. Operationally, this solution is suboptimal because the flex-gates connected to the OSS/non-OSS corridor cannot be used independently and simultaneously for OSS/non-OSS arrivals because of the risk of mixing clean and dirty passengers. In Helsinki, the airport has some gates available that use doors in a corridor to divert passengers to passport control or not, depending on the flight origin. The process is managed by opening or closing specific doors during aircraft arrivals to prevent cross flows of passengers and ensure OSS passengers do not mix with non- OSS passengers. This may involve holding passengers on aircraft on adjacent stands for a short time until one set of passengers is clear, to prevent mixing of flows. This process creates restrictions on which stands can be used for different flights and can cause delays for passengers if the process is not well not managed. The airport manages these constraints by trying to plan the most convenient sequence when allocating gates to arriving and departing aircraft. As the Helsinki example shows, this method of segregating OSS and non-oss passengers is not perfect and illustrates why airports have not simply added a corridor to their gate areas in order to segregate OSS flows. Reasons include: October 2018 Restricted 77

78 o o o Space limitations in existing buildings prevent the additional corridor from being added Reduction in effective stand capacity and impact on punctuality caused by restrictions on simultaneous use of adjacent stands Resource cost associated with manually opening / closing / guarding doors to prevent passenger cross flows and sweeping areas after arrival of non-oss flights and / or capital cost of implementing an automated process to achieve the same objectives 3. An additional floor in the terminal building can be added to provide a separate flow for OSS and non-oss passengers and still allow independent use of aircraft stands, overcoming some of the limitations of the corridor solution described above. The diagram below illustrates how the additional level works in Frankfurt. Terminal 1 is the Lufthansa/Star Alliance terminal handling 80% of passenger volumes; flows are segregated as follows: o Level 1 Apron o Level 2 Schengen arrivals and departures o Level 3 Non-Schengen OSS arrivals and departures o Level 4 Non-OSS arrivals (incorporating transfer security screening) Figure 25: Cross section of Pier A in Frankfurt Airport, illustrating how different levels are used to segregate passenger flows Creating another level in a terminal (or terminals) is an expensive solution and is not physically possible for some airports based on existing infrastructure. The business case for making such a change purely for OSS would be difficult to make, especially if the October 2018 Restricted 78

79 number of passengers benefiting is not large, as is the case for smaller hub airports which have already enabled OSS for Schengen routes. As such, this type of solution is more likely to be incorporated into a new terminal design rather than a retro-fit to enable OSS. Indeed, some airports which have not fully implemented OSS stated in survey responses that they would look to implement full OSS capability into future terminal upgrades / builds Reasons for non-introduction of hold baggage OSS If OSS is allowed by the State and the airport has transfer passengers, the primary reason for not implementing hold baggage OSS is typically that the costs of infrastructure changes necessary to enable OSS for hold baggage outweigh the perceived benefits of offering it. Most transfer bags arriving on an aircraft from an OSS origin will be mixed, i.e. for multiple departures, so the bags must be sorted, and generally cannot simply be transferred tail to tail as a unit directly to a single departing aircraft. The bags are normally loaded into the baggage system for sortation by departing flight; this creates a requirement for the system to be able to segregate OSS bags, which can go directly to the sorter, from those which require screening. There are three basic ways in which this segregation can take place, all of which have advantages and disadvantages: 1) Create a separate transfer bag input feed for OSS bags, which feeds directly into the baggage sortation system, bypassing hold baggage screening (HBS) Reduces the number of bags which are screened, potentially reducing HBS equipment and resource costs Requires infrastructure change to create the new input and link to the existing baggage system Baggage teams must know which arriving flights are OSS, to ensure bags which require screening are not loaded into the wrong input point 2) Build a bypass conveyor route into the existing baggage system, so when the system reads a tag on a bag from an OSS origin, it is directed to the sorter, bypassing HBS Reduces the number of bags which are screened, potentially reducing HBS equipment and resource costs Requires infrastructure change and the physical space in the system to create the additional bypass route 3) All bags follow the same physical route through HBS, but OSS bags are identified from a bag tag scan prior to the X-ray and simply pass through the X-ray without being screened No infrastructure change required October 2018 Restricted 79

80 Reduced requirement for screeners to view images of bags referred to level 2/3 screening, potentially reducing resource costs Since bags physically pass through HBS, no significant reduction in primary (level 1 HBS) screening capacity. In most case, bypassing HBS will not significantly reduce the bag processing time, since the baggage in system time only makes up a small amount of the overall bag transfer process. Also, most bags pass through HBS without adding any time to the process as they are screened in line, unless they are diverted for enhanced screening, which is a relatively low proportion of bags. October 2018 Restricted 80

81 11. Assessment of cost and benefits Overview: Costs and benefits of OSS Transfer passenger market Approximately 117 million passengers transferred at EU/EEA/Swiss airports in The chart below shows where these passengers originated, identifying whether they arrived from an OSS origin. Only 16% of EU/EEA/Swiss transfer traffic does not come from an OSS enabled origin. However, OSS is not fully implemented at all airports within this area, so the full 84% OSS opportunity has not yet been achieved in practice. As illustrated, 25% of the total EU/EEA/Swiss transfer traffic originates from third countries; this third country traffic is split out by country in the diagram below: October 2018 Restricted 81

82 43% of these transfer passengers originate from countries with existing OSS arrangements with the EU or who are currently in OSS discussions. The biggest other potential targets for future OSS discussion would be China, India, Russia, Brazil and Ukraine. Costs and benefits of OSS Working with 16 study airports, o&i consulting researched the costs and benefits of One Stop Security. The costs of implementing OSS can be significant, requiring major infrastructure change. Some of the larger airports in the study spent between 50m and 100m to deliver full OSS capability, although in these instances, the changes were made as parts of wider airport projects, since OSS could not justify such investment by itself. At the other extreme, some airports spent little or no money implementing OSS, either because their infrastructure allowed for the segregation of passenger flows, or process solutions, such as manual escorts, were used to achieve OSS segregation (typically the case in small airports with few transfers). The main direct financial benefit of One Stop Security centres around reducing transfer passenger security costs which typically translate into reduced transfer passenger security fees. An indicative assessment of savings for the EU/EEA and Swiss OSS market is shown in the table below: OSS market in EU/EEA and Switzerland Transfer passengers % of market Potential OSS saving Total potential market size 116,827, % 571,286,000 Potential OSS market based on existing OSS countries 97,997,498 84% 479,208,000 Realised OSS market based on airport implementation 69,382,229 59% 339,279,264 This demonstrates that while an estimated EUR 339m pa in savings has already been already realised, only 71% of eligible passengers are processed as OSS (based on the existing OSS market and including potential from the UK) and that further savings can be achieved by EU/EEA/Swiss airports implementing OSS fully. Equally, expanding OSS to other countries will create more savings to the aviation industry as only 59% of all transfer passengers in the EU/EEA and Switzerland are currently processed as OSS. As well as cost savings, other key benefits are improved passenger processes, with reduced / more robust connection times and better passenger experience of most commercial importance to airports, airlines and passengers. At a more macro level, primary benefits of OSS include global alignment and improvement of security standards and increased cooperation between States. October 2018 Restricted 82

83 o&i consulting worked with 16 study airports as well as stakeholders from the broader aviation sector to complete an assessment of the costs and benefits of One Stop Security. During this exercise, it became apparent that only a small amount of information about One Stop Security is available. To provide a robust assessment, we therefore worked closely with stakeholders, asking for specific data to help us provide a detailed understanding of the costs and benefits associated with OSS. In addition to the information collected directly from study airports, we analysed data about the broader transfer market. IATA kindly offered to work with us to establish a dataset representative of a large proportion of the transfer market for EU / EEA / Switzerland and OSS third countries Transfer passenger market To provide a full assessment of the economic benefits One Stop Security, it was necessary to develop a full understanding of the current and potential OSS transfer market. From the IATA sourced data, we made the following observations. Approximately 117 million passengers transferred at EU/EEA/Swiss airports in The following chart shows where these passengers originated, identifying whether they arrived from an OSS origin 2. Figure 26: How much of the EU/EEA/Swiss transfer market is covered by OSS arrangements 2 Third country data is made up of the 46 countries from which the EU/EEA and Switzerland receive the highest volume of transfer passengers, regardless of final destination. Details of these countries in Appendix 3. October 2018 Restricted 83

84 The chart shows that 75% of EU/EEA/Swiss transfer traffic is generated internally, with another 9% coming from third countries where the EU recognises security equivalence (USA, Canada and Singapore). Another 2% of transfer passengers come from Japan, Israel, Hong Kong and Serbia, who are all in discussions with the EU about OSS arrangements. This only leaves 14% of transfer traffic that does not come from an OSS enabled origin. (Note that the actual percentage will be slightly higher than this as the data only includes the top 46 third countries.) As described elsewhere in this report, OSS is not fully implemented at all airports within the EU/EEA and Switzerland, so the full 84% OSS opportunity has not yet been achieved in practice. In particular, the UK, which only allows domestic OSS, accounts for around 9% of all transfers in the region, and a number of airports have not implemented OSS for non-schengen origins, reducing the realised percentage further Third country transfers in the EU As demonstrated in Figure 26, the total EU/EEA/Swiss transfer traffic which originated from third countries was 25% of the total market in The chart below shows that, from the top 46 third countries for EU transfer traffic, 43% of transfer passengers originate from countries with existing OSS arrangements with the EU or who are currently in OSS discussions. Figure 27: Third country origins of passengers transferring in the EU October 2018 Restricted 84

85 From the viewpoint of increasing the number of OSS eligible passengers transferring through the EU/EEA and Switzerland, the biggest potential targets for future OSS discussion would be China, India, Russia, Brazil and Ukraine. However, increasing the number of passengers benefitting from OSS is only one of a number of factors to be considered in determining the feasibility of developing OSS arrangements with other countries, and these must also be considered in evaluating the countries with which it would be ideal to start further discussions. Montenegro does not appear in the top 46 third countries for transfer traffic into the EU. The bottom country of the 46 (Kazakhstan) generated 102,000 EU/EEA/Swiss transfer passengers in While we do not have the figure for the number of EU/EEA/Swiss transfer passengers originating in Montenegro, knowing it is below 102,000 means it would be at a maximum 0.3% of the total EU transfer passenger opportunity from third countries. This, combined with the typical cost of making changes to accommodate OSS flows, may help to explain why, at an airport level, some operators have not chosen to reconfigure their infrastructure to enable OSS for Montenegrin transfer traffic Study airports To obtain more detail about OSS implementation, o&i consulting engaged closely with 16 airports. These airports were selected from those who responded positively in the airport survey to a request to participate in this phase of the study. From the survey responses, we selected airports that best represented a range of airport characteristics (including size, geography, profile, transfer volumes) to further the study objectives. As shown earlier in this report, the participating airports were as follows: Airport Size (mppa % Transfer Level of OSS departing) passengers implementation 1 Amsterdam Full 2 Brussels Full 3 Calgary Trial 4 Copenhagen Full 5 Dublin Partial / Trial October 2018 Restricted 85

86 Airport Size (mppa % Transfer Level of OSS departing) passengers implementation 6 Frankfurt Partial 7 Heathrow Partial Domestic 8 Helsinki Full 9 Lisbon Partial 10 Madrid Partial 11 Munich Full 12 Ostend Full 13 Podgorica Full 14 Prague Partial 15 Toronto Partial 16 Vilnius Full Table 11: Airports participating in study including size and OSS implementation status Our team engaged with each airport to develop a detailed understanding of: Transfer passenger statistics, including the proportion benefiting from One Stop Security The level and maturity of One Stop Security implementation at their airport and the reasons for lack of full implementation The developments and investments required to enable OSS at its facilities The cost of implementing OSS Benefits of OSS, for the airport and other stakeholders Whether the airport plans to expand OSS and the costs associated with this Any other relevant information relating to OSS. For context, nine of our study airports are in the top 20 EU airports by passenger numbers. These 9 airports account for 59% of the total EU transfer traffic and the top 20 account for 87%. This is shown in the chart below, split by airport: October 2018 Restricted 86

87 Study airports account for 59% of EU transfer traffic and the top 20 EU airports account for 87% Other smaller airports, 13% LHR, 8% AMS, 12% BRU, 3% Other top 20 apts, 27% LIS, 3% CPH, 3% MUC, 8% DUB, 1% FRA, 15% MAD, 7% Figure 28: Study airports within the top 20 EU airports The remaining 7 airports selected for the study were selected to provide geographic spread, represent third countries (Calgary, Toronto and Podgorica) and provide a range of airport sizes (Helsinki, Prague, Vilnius and Ostend) Investment required to enable OSS The o&i team worked closely with each of the airports involved in the study to understand the level of investment required to realise One Stop Security in their operations and the nature of work that was required to ensure segregated passenger flows. The following sections provide more detail, grouping airports by size. October 2018 Restricted 87

88 Study airports >40 mppa o&i consulting worked with 5 airports handling over 40 mppa as part of this study. The table below summarises the level of OSS implementation at each of these hub airports and the changes and investment required to deliver this level of One Stop Security. OSS implementation level Amsterdam Frankfurt Heathrow Madrid-Barajas Munich Full Partial (Schengen and Non- Schengen in T1; Schengen possible in T2; no interterminal OSS) Partial (Domestic > International in T5) Partial (Schengen only in T2; other by exception; no interterminal OSS) Full Change made to enable OSS Construction of a new pier level Change of gate and stand allocation T1: an additional level was added to a section of the terminal Not yet required Terminal redevelopment Development of an additional level to terminal Adaption of IT systems and baggage flows Modification of door management Modification of passenger flow Dedicated OSS implementation project Investment level EUR 100+m for pier level construction as part of broader terminal redevelopment N Y N N N No additional cost for change of allocation EUR 250m for T1 developments to satisfy Schengen requirements Part of original terminal design as Major infrastructure development to British Airways has a high enable Schengen flows proportion of such Dom > Int flows EUR 60m for additional level to terminal, as part of developments to implement Schengen flows Plans to expand OSS Not required Not planned Early stages of discussion focusing on flows from USA No plans Not required Changes required to expand OSS Not required Major infrastructural change to Terminal 2 OSS flows will be integrated into new Terminal 3 flows Reciprocal convergence of security arrangements between UK and USA Major infrastructural change Movement of aircraft between terminals Change of aircraft stands Major infrastructural change to other terminals (separate passport control and potentiall separate levels) and Not required consideration of how OSS passengers connect between terminals Table 12: An overview of the investment required to achieve current levels of OSS at study airports with +40 mppa October 2018 Restricted 88

89 Two of the five hub airports have fully implemented One Stop Security and are therefore able to handle all OSS flows. In both cases, this has been made possible as part of a broader airport development project: Amsterdam Airport Schiphol: OSS for non-schengen / third country flows was made possible by the development of an additional level, Level 2, to the pier serving Terminals 2 and 3. Level 2 enables the segregation of non-oss transfer passengers, for transfer screening, from OSS and terminating passengers, who are directed along Level 1. Schengen OSS flows were already served via the airport s Schengen facility. While the construction of the additional level was for One Stop Security handling purposes, these developments took place as part of a broader airport development programme. The overall objective of the programme was for the airport to move from gate screening to central security which was also a requirement for the implementation of OSS. Munich Airport: Implementation of One Stop Security was relatively straightforward for Munich Airport as the airport had already constructed an additional level onto its Terminal 2 in 2006 to enable Schengen flows. With transfer screening on the new upper floor, non-oss transfer passengers can be directed to this level while OSS passengers bypass screening via Level 5, flowing directly to passport control if required. Additional considerations for the airport were door management for passenger flows and IT modifications for OSS baggage flows, however these were at no additional cost to the airport. Terminal 1 at Munich Airport is typically a point-to-point terminal that only processes a very low proportion of transfer passengers. The small number of OSS passengers transferring at this terminal and between terminals are handled by exception. A further two of the study airports with more than 40 million passengers per year have international OSS in place, however only partially. Madrid-Barajas Airport is only able to offer OSS for Schengen passengers; Terminal 4 was designed to handle these flows. The other three terminals are somewhat older and would require significant redevelopment to enable One Stop Security flows. Non-Schengen OSS flows can only be handled by exception, for PRM passengers or groups of around passengers, who are escorted to their transfer flight once corridors are cleared of other passenger flows. The key issue at this airport, as with most Spanish airports, is a result of the positioning of border control within the arrivals / transfer flows. While the airport would like to be in a position to offer full OSS, the operator states that it would be very difficult to adapt the design of existing terminals and far easier to accommodate October 2018 Restricted 89

90 in new building designs, however this would need to be part of future capital expenditure plans. Frankfurt offers partial OSS across the airport. Terminal 1, which processes around 80% of passengers, is set up to offer full OSS, as a result of a EUR 250m construction project to raise a section of the terminal by one level in order to accommodate Schengen requirements. This development also made Non-Schengen OSS possible in Terminal 1. In Terminal 2, Schengen > Schengen OSS would be possible however it is not required due to the terminal predominantly receiving point-to-point traffic. Non- Schengen OSS is not possible due to the design of the terminal flows. There is no capability (and no current requirement) to accommodate inter-terminal OSS passenger flows. The new Terminal 3 at Frankfurt Airport, expected to be commissioned in 2022/23, is designed to be fully One Stop Security enabled. However, it will still not be possible to offer inter-terminal OSS. There has been discussion of a long-term plan for a potential inter-terminal bus or train service that will segregate OSS passenger flows; this however remains a discussion point. It is important to note a clear distinction between the two sets of hub airports discussed above. The first two airports that have fully implemented One Stop Security are effectively single terminal hub operations: one has multiple terminals which are all linked by a large, single departure lounge; the other operates one major hub terminal which handles almost all of the transfer traffic, with a separate predominantly point-to-point terminal. The second pair of airports that have partially implemented One Stop Security have at least two separate terminals with no physical link (e.g. corridor, bridge), with distinctively different layouts and flows. In these instances, not all terminals are appropriately structured to enable OSS. Notably, it is typically extremely challenging to segregate OSS passengers transferring between terminals from other passengers, without a dedicated service which would be both resource and cost intensive. Heathrow, the final airport in this group, is currently only able to offer OSS for domestic origin flights due to More Stringent Measures (MSMs) in place in the UK. In Terminal 5, only domestic to international intra-terminal OSS flows are possible. These flows were built into the original terminal design to accommodate the high proportion of British Airways traffic of this nature set to use the terminal. October 2018 Restricted 90

91 The potential to enable One Stop Security for passengers transferring at Heathrow from the USA is currently in the early stages of discussion at senior level between UK and USA authorities. As an airport with a number of separate terminals, and with US flights operating from three of its terminals, it will be important for the operator to consider the cost and feasibility of how OSS passengers would move within and between terminals. Currently, based on IATA 2017 data, around 22% of Heathrow s transfer traffic (ca. 1.9 mppa) originates from the USA, so this would be a key lane on which to introduce OSS type arrangements. October 2018 Restricted 91

92 Study airports of mppa Six study airports handle between 20 and 40 mppa. The table below summarises the level of OSS implementation at each of these hub airports and the change and investment required to achieve this level of One Stop Security. OSS implementation level Full Full Brussels Copenhagen Dublin Lisbon Calgary Toronto Partial / Trial (Full OSS in Terminal 2; currently trialling new transfer security area and flows) Partial (Passengers: Schengen only; Baggage: Full) Partial / Trial (currently trialling new OSS infrastructure and flows with 2 airlines; potential to extend airportwide) Partial (Terminal 1 only) Change made to enable OSS Adapted all airbridges to allow 2 (split) levels to be accessed. No change required: all gates have a multifunction for different passenger types New transfer security area Modification of HBS system This facility is currently being trialled; parameters it has been in place for ca 3-4 months. Integration of OSS flows and infrastructure into ongoing terminal development programme Integration of 2 screening points as part of broader terminal development programme Dedicated OSS implementation project Y N/A Y Y N N Investment level EUR 3 m on airbridge adaptation No additional cost EUR 15m No additional cost EUR 46.2m Unknown cost for the OSS aspect of the overall terminal However the OSS dedicated investment development programme was the cost of the two screening points Plans to expand OSS Not required Not required The airport is working to facilitate OSS in T1 Not planned Yes, as part of the current OSS integration programme. The trial currently involved two airlines. The airport would like to gradually roll out across airlines. Expansion of OSS would be when T3 is reconfigured Changes required to expand OSS Not required Not required Structural development of T1 Infrastructural change to the airport would be required Gradual implementation of OSS arrangements airport and airline wide. This would need to be part of a broader full terminal development Table 13: An overview of the investment required to achieve current levels of OSS at study airports with mppa October 2018 Restricted 92

93 Two of the study airports in this size bracket are able to offer full One Stop Security. Copenhagen Airport was able to achieve this at no additional cost to the airport as the infrastructure and flows already in place provided the flexibility to accommodate different passenger types. At Copenhagen, the gates in the main non-schengen pier are multifunctional, meaning they can handle Schengen and Non-Schengen passengers. When passengers disembark, certain doors are opened and closed automatically, triggered by the flight number (which defines the aircraft origin and whether the passengers are eligible for OSS). OSS passengers are routed directly to passport control, which takes them into the Schengen departure lounge. Different doors are opened for non- OSS arrivals, and these passengers are directed to an upper floor, where they are screened, before dropping down a level to pass through the same passport control as OSS passengers and joining the Schengen departure flow. After each arrival the corridors are swept to ensure no passengers or objects are left there. This used to be manual process, but cameras have recently been installed to allow the task to be carried out by viewing CCTV. In addition to the primary non-schengen pier described above, Copenhagen has another set of stands which can facilitate non-schengen OSS arrivals. These stands are located at the opposite end of the Schengen area, and the introduction of a passport control desk in the arrival flow has enabled non-schengen OSS arrivals to be processed before entering the Schengen area of the terminal. Non-OSS origin flights cannot be processed here as there are no screening facilities. With Schengen and Non-Schengen passengers in separate buildings, Brussels Airport implemented One Stop Security at a relatively low cost to the airport. Investing around EUR 3 million, the airport adapted all airbridges to the Non- Schengen building to enable 2 split levels to be accessed, therefore providing the flexibility to segregate passenger flows. Toronto and Lisbon airports, with 24 and 26.6 mppa respectively, offer One Stop Security on a partial basis. OSS has been in place for 2 years at Toronto Airport, one of four Canadian Class 1 airports offering One Stop Security. As Air Canada s main hub, it was important to the airport to be able to process OSS passengers; however, reconfiguration of the airport was necessary to achieve this. As part of a broader terminal construction programme in Terminal 1, OSS flows were integrated into the design. October 2018 Restricted 93

94 International passengers only arrive at the Hammerhead end of the main pier in T1. Figure 29: Terminal 1 Toronto Airport, with 65% of the airport s passenger volume The Terminal 1 pier has two levels, arriving and departing passengers move up or down between levels (depending on where in the terminal they arrive). Non-OSS passengers are 'captured' and rescreened and OSS passengers follow a separate flow, without screening, on one side of the pier. Both flows clear the Canadian border. The OSS aspect of the terminal redevelopment expenditure required the installation of two new screening points within the secure side of the terminal as well as enabling the necessary flows to ensure OSS and non-oss passengers are segregated. Toronto Airport fully supports the expansion of One Stop Security at its facilities. However, this can only be achieved when Terminal 3 is reconfigured, which again would require a full terminal redevelopment. Lisbon Airport has Schengen flows in place, which benefit from OSS. However significant infrastructure change to Terminal 1, the airport s main international terminal, would be required to adapt terminal flows to process Non-Schengen OSS flows effectively. The airport has, however, been able to easily adapt its Hold Baggage System by adjusting the system parameters, at no additional cost, and is therefore able to offer full OSS for baggage flows. A further two airports in this category, Dublin and Calgary, are currently trialling new One Stop Security related infrastructure and processes. October 2018 Restricted 94

95 Until recently, to offer One Stop Security to Non-Schengen passengers, Dublin Airport had to engage personnel to complete a sweep of airside areas to verify that they were clean after non-oss flight arrivals. This was cumbersome and costly. Over the past few months a new transfer security area has been opened and is being trialled in Terminal 2, alongside new transfer flows to complement the new area. At a cost of ca. EUR 15 million, the new screening area location and associated flows provide the airport with the flexibility to segregate transfer passengers by type and therefore eliminate the need to manually security sweep corridors following the arrival of Non-OSS flights. One Stop Security is not currently possible in Terminal 1, however transfer volumes are much lower here as a large proportion of flights in this terminal are point-topoint. Configuring Terminal 1 to accommodate OSS flows would require redevelopment of airside infrastructure to ensure flows are segregated. One Stop Security operations have been on trial at Calgary Airport for the past 2 years. These were introduced as part of a broader development project that involved the commissioning of a brand-new international facility. Figure 30: Airside areas of the new international facility at Calgary Airport OSS flows were not part of the original plan for the new facility, however during the design stage, it was agreed to integrate OSS into the developments. This added ca EUR 46.2 m (CAD$70m) to the overall project. The trial is currently taking place with two airlines, Air Canada and WestJet, alongside CBSA (Canadian Border Security Agency). The airport is awaiting final approval of its processes at State level to enable it to extend the trial out to other October 2018 Restricted 95