The Australian government Office of Best Practice Regulation has recommended the use of cost-benefit assessment for all proposed federal regulations. Since 9/11 government agencies in Australia, United States, Canada, Europe and elsewhere have devoted much effort and expenditure to attempt to ensure that a 9/11 type attack involving hijacked aircraft is not repeated. This effort has come at considerable cost, running in excess of US$6 billion per year for the United States Transportation Security Administration (TSA) alone. In particular, significant expenditure has been dedicated to two aviation security measures aimed at preventing terrorists from hijacking and crashing an aircraft into buildings and other infrastructure; (i) Hardened cockpit doors and (ii) Air Security Officer (ASO) program (air marshals).These two security measures cost the Australian taxpayers and the airlines nearly $60 million per year. This paper seeks to discover whether these new aviation security measures are cost-effective. The preliminary cost-benefit analyses considers the effectiveness of security measures, their cost and expected lives saved as a result of such expenditure. An assessment of increased expenditure on the Air Security Officer (air marshals) program since 2001 suggests that the annual cost is $157.2 million per life saved. This is greatly in excess of the regulatory safety goal of $1-$10 million per life saved. As such, the ASO program seems to fail a cost-benefit analysis. In contrast, hardening of cockpit doors has an estimated annual cost of only $700,00 per life saved, suggesting that this strategy is a much more cost-effective security measure.
Centre for Infrastructure Performance and Reliability Research Report 266.04.08