U.S. Aircraft Portable-Missile Defense May Cost $43 Billion

Arming U.S. passenger aircraft to deter shoulder-fired missiles may cost $43.3 billion over 20 years, the Homeland Security Department says in an unpublished report that may reignite debate about the vulnerability of planes to terrorists.

Airlines say the expense exceeds the risk, and oppose installing the systems, made by BAE Systems Plc and Northrop Grumman Corp.

The missiles “could easily be smuggled into an airport in a western country,” said Matt Schroeder, manager of the arms- sales project of the Federation of American Scientists, which calls the portable weapons “an imminent and acute threat” to airliners. The Washington group disclosed the report after obtaining it through a Freedom of Information Act request.

The analysis was requested by Congress following the introduction of legislation in 2003 by Democratic Senators Charles Schumer of New York and Barbara Boxer of California that would have required defense systems on U.S. passenger planes. The lawmakers acted a few months after missiles were fired at an Israeli passenger plane in Kenya.

The proposed legislation stalled in disputes over the cost and reliability of the defense equipment. Since then, the BAE and Northrop systems have been tested for live fire and multiple missile attacks during more than 16,000 flight hours on AMR Corp.’s American Airlines’ planes and FedEx Corp.’s cargo jets by Homeland Security officials, who declare the technology effective in the report.

The systems foil attacks by using lasers to deflect heat- seeking missiles.

$12 Million a Plane

The $43.3 billion estimate is based on installing, operating and maintaining the defense systems on all large passenger planes, which the report defines as wide-body aircraft and narrow-body planes the size of the Boeing 737 and Airbus A318 and larger. The cost equals almost $12 million over 20 years for each plane, based on 3,636 aircraft as of 2008.

John Verrico, a spokesman for the Homeland Security Department’s Science and Technology Directorate, confirmed the report’s authenticity in a phone call yesterday.

An attack on a U.S. passenger plane by a shoulder-fired missile would have an economic cost of more than $15 billion, assuming it led to a week-long shutdown of airspace, according to a 2005 report by the Rand Corp., a policy research group based in Santa Monica, California.

The risk of an attack outside a combat zone may be too small to justify the cost of the added protection, said David Castelveter, a spokesman for the Air Transport Association, which represents airlines including Delta Air Lines Inc., American and UAL Corp.’s United Airlines.

Airline Opposition

“We don’t support the installation” of the systems, Castelveter said in an interview. “They represent only one possible deterrent of a number of ways in which to attack Americans.”

If Congress required equipping airplanes with a defense system, the Washington-based airline association would want the U.S. to pay all costs, including maintenance, Castelveter said.

The Transportation Security Administration canceled Delta’s plan for flights to Kenya and Liberia a year ago, citing the threat of shoulder-fired missiles, the Homeland Security Department’s Science and Technology Directorate said in the report dated March 30.

In November 2002, terrorists linked to al-Qaeda fired at and missed an Israeli jet talking off from Mombasa, Kenya. The next year, a missile struck a DHL International cargo plane taking off from Baghdad’s airport, wrecking the plane while the crew survived.

The missiles are five-feet (1.52 meters) long, weigh 35 pounds (15.9 kilograms), and could easily be smuggled into the U.S., said Schroeder of the Federation of American Scientists, which also works against the proliferation of nuclear weapons.

Black-Market Missiles

“Just because attacks have occurred in war zones or near war zones thus far doesn’t mean that will be the case in the future,” he said in an interview.

Russia and China have developed missiles that the BAE and Northrop technology would combat, while Iran, North Korea and Eritrea are among countries that traffic in the weapons, Schroeder said.

“The values for black-market missiles range from about $500 to about $250,000,” he said.

The technology for passenger planes is prone to breakdowns, and a lack of reliability may delay flights or result in cancellations unless airlines are permitted to defer maintenance, the Homeland Security Department says in the report.

Reliability Tests

The BAE and Northrop systems “currently fall short” of reliability requirements measuring their “ability to perform as designed in the operational environment without any failures,” the report finds. “This shortfall results in increased spares and maintenance costs.”

Doubling reliability would reduce the $43 billion cost of the systems by $10 billion over 20 years, according to the report.

The findings on reliability and maintenance are based on tests completed in 2007, Jack Pledger, spokesman for Los Angeles-based Northrop, said in an interview.

Since then, Northrop has upgraded its system, called Guardian, producing 1,750 units now installed on 500 planes among 50 different types of aircraft in the U.S. Air Force fleet and those of U.S. allies, Pledger said.

“All those concerns about reliability have been addressed,” he said.

BAE, based in London, said it has a maintenance system to reduce the upkeep costs of its technology.

BAE’s Jeteye system completed more than 2,000 hours of flight tests without failure on American Airlines flights from New York to Los Angeles, Program Director Burt Keirstead said in an e-mailed statement.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net.

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