Homeland Security to Attract increased Usage of Automated Decision Support

Systems (Airport Security)

Ravi Madavaram, ConsultantAerospace & Defense

29 August 2012

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Today’s Presenter

Ravi has extensive experience in Aerospace and Defense consulting for clients in Asia Pacific and India. His expertise includes Business Transformation Strategies, Market Entry Strategies, Business Plan evaluation, Technology Trends for airlines, MRO’s, Defense and Home Land Security participants, Regulatory Authorities of different countries.

Ravi Kumar Madavaram, ConsultantAerospace & DefenseFrost & Sullivan

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Agenda

2

3

Drivers and Challenges

Future Outlook

1 Overview of the Homeland Security Market

4 Way Forward

5

2

3

Drivers and Challenges

Future Outlook

1 Overview of the Homeland Security Market

4 Way Forward

6

Homeland Security

Border Security

Maritime Security

Airport Security

Immigration

Recognition

Verification

Access Control

Customs

Export Duties

Import Duties

Excise Duties

Quarantine

Biological

Plant

Inspection

Infiltration

Smuggling

Economic Security

Disaster Response Cyber Security

Critical Infrastructure

Security

Homeland Security – Market Segmentation

Included in the study

Not covered in this study

7

2

3

Drivers and Challenges

Future Outlook

1 Overview of the Homeland Security Market

4 Way Forward

8

Asia Pacific is now emerging hub for global economical, trade & tourist activities. The attraction to Asia Pacific countries has encouraged the growth of air travel in & out & within Asia Pacific Region. This increased demand has meant that the security & safety of the passengers & the airports is of critical importance.

Increasing activity in Asia Pacific Region

Many airports have been built or refurbished to cater to the rising demand.

Introduction

9

After the sub-prime crisis in 2009, the Asia Pacific countries are experiencing significant economic growth. The strong economic growth has resulted in higher traffic volume of both passenger and cargo in the region.

2008 2009 2010 2011 2012 2013 2014 20150

500

1000

1500

2000

2500

3000

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Air Passengers Growth (2008 – 2015)

2008 2009 2010 2011 2012 2013 2014 20150

10000

20000

30000

40000

50000

60000

70000

80000

90000

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

Car

go (

Tho

usan

d M

etric

Ton

)

Air Cargo Volume (2008 – 2015)

Source : Frost & Sullivan

As airports in the region flourish & grow, safety and security become major concerns

Airport Traffic Projections

Pas

seng

er (

In M

illio

ns)

10

Source : Frost & Sullivan

Increasing Air Passengers & Cargo has meant that like rest of the world, Asia pacific also faces several issues regarding Safety & Security. However, the Airports in the region are better placed to handle these issues as they are still in the development stage.

Terrorist Threats

Low Med High

Ma

rke

t D

rive

rs

Health Threats

Increasing Passenger Volume

Increasing Cargo Movement

Airport Expansion Plans

Technology Adoption

Impact

Market Drivers

Market drivers & challenges come hand in hand.

Challenges

Cost

Lack of Staff Diligence

Privacy & Other legal Issues

Faulty / Obsolete Equipment

Disconcerted Efforts

Drivers and Challenges

11

2

3

Drivers and Challenges

Future Outlook

1 Overview of the Homeland Security Market

4 Way Forward

12

Source : Frost & Sullivan

There will continue to be many opportunities in the airport security market for the foreseeable future.

Screening

Access ControlSurveillance

Intelligent surveillance will increase as security focus shifts to identifying the threat as opposed to

finding the bomb.

Adoption of biometric solutions will

increase in the market.

Strong growth as operators upgrade current systems

that are coming to the end of the lifecycle and more advanced technology is

introduced to the market.

The airport security market has remained unaffected by the global financial crisis and will continue to show strong growth. Asia-Pacific will be the region with the biggest growth in this decade.

Integration

Integration of security systems is becoming a

priority for airport operators, especially in new infrastructure and

terminal buildings.

Market Growth Potential

13

Source : Frost & Sullivan

2008 2009 2010 2011 2012 2013 2014 2015 2016 20170

2

4

6

8

10

12

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Rev

enue

(In

Bill

ion

US

D)

Asia Pacific Airport Security Market (2008 – 2017)

Security Screening;

65.00%Video Sur-veillance & Monitoring;

7.80%

Perimeter & Access Control; 12.80%

Others / In-tegration; 14.40%

Revenue Segmentation by technology, Asia Pacific Airport

Security(2011)

The expected rapid economic growth for the various Asia Pacific countries, leading to an increase in the passenger traffic, is likely to be the main driver for the airport security market in first half of the decade. The market growth is expected to slow down later as after the upgrade at the major airports, various airport operators may struggle to find incentives to fund the installation at the other airports.

The rate of growth in APAC airport security market is forecasted to flag off during second half of the decade.

Market Growth Potential

14

Source : Frost & Sullivan

Functionality Factors

Cost Factors

Efficiency Factors

High degree of system intelligence

Maturity of technology

Latest technology

Ease of installation and integration

Compatibility with existing security systems

Low purchase price

Low installation cost

Low operating cost

Return on investment (ROI)

Durability

Excellent installation support

Excellent maintenance support

Ease of use

High reliability

Imp

ort

ance

in

P

urc

has

ing

Dec

isio

n

High

Low

Influences on purchasing decision of security technologies and systems

15

Source : Frost & Sullivan

Since the inception of Electronic Passports and Electronics Visa, automation of immigration functions has been significantly improved. As of now, the e-Gate facility is available for nations of the installed country.

The need for speed and increase in passengers, the e-Gate adaptation is high and in next 5 years is expected to be used by more than 90% countries in Asia Pacific

2009 2010 2011 2012 2013 20140

1000

2000

3000

4000

5000

6000

7000

Total e-Gates installed, Global

Countries using e-Gates, 2012However, US and Korea have been working together to provide seamless immigration facilities for low risk category of passengers

e-Passport, e-Visa and e-Gates

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As the technology of various security equipment advance, the various airport operators are faced with the delicate balance between customer satisfaction and security integrity. Issues such as privacy and potential health concerns, brought about by new technology such as X-ray, will be a key challenge for the various airport operators.

Integrators / Service Providers

Airport Operators

Manufacturers

As this industry moves towards integration of various security systems working seamlessly together to have a more complete profiling of a threat this presents a huge opportunity for participants in this segment.

Due to the advancement of technology, the various key major manufacturers will be required to continue to invest significantly in R&D. Manufacturers that are able to achieve the most efficient R&D capabilities will gain a significant competitive advantage in this market.

The advancement in technology has resulted in both challenges and opportunities for the different stakeholders in the airport screening and inspection security market.

Airport Security Market Value Chain

The challenge is to minimize the waiting times at the same time ensuring highest security

Stakeholder Challenges & Opportunities

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The dynamics of the market will slowly shift away from labour-intensive activities to an increasingly technological approach. Source : Frost & Sullivan

Scr

eeni

ngS

urve

illan

ceA

cces

s C

ontr

ol

2011 2015 2018

X-ray / Metal Detector

Thermal Lie Detector

Behavioral Detection

Computer Tomography

Checkpoint of the future

Gamma-millimeter wave

Fingerprints Face DetectionE Passport

X-ray / Metal Detector

IRIS ScannerRFID

Hi Def Video cameras

Perimeter Intrusion Systems

Bluetooth Tracking

CCTVVideo Content

Analysis

Thermal Security Systems

Inte

gra

tion

of d

iffere

nt S

ecu

rity Syste

ms

Airport Security Technology Roadmap

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2

3

Drivers and Challenges

Future Outlook

1 Overview of the Homeland Security Market

4 Way Forward

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Source : Frost & Sullivan

Airport Security Solutions are evolving & the ‘Product & Services Strategy’ must be in line with the changes expected in future.

Airport Security Solutions

Integration of Multiple / Varying security Platforms

Efficient & Reduced Time on Security Procedures

Real Time Data Intelligence & Decision

Modular & Upgraded Systems

Training & Simulation

The Way Forward

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Source : Frost & Sullivan

Identification of ‘Competitive Strategy’ is a must in the environment where it is necessary to keep up with changes in Technology.

•Invest in technology as security industries are highly technologically driven due to constant evolution of security threats

Investment in R&D

•Identify best business partners & formulate strategic alliances to offering security platforms & ensuring systems interoperability

Strategic Alliances

•Device efficient supply chain management to ensure fast delivery, responsive after sales support & cover widespread distribution into markets efficiently

Supply Chain Efficiencies

•Located close to customers to respond to requirements timely & efficiently

Customer Centric Services

The Way Forward

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