Frost: Euro Airport Security Equipment Market Sees Growth
October 11, 2007 // Published as a news service by IHS
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The European airport security market looks set for robust growth, according to Frost & Sullivan, particularly in the wake of continued threats, new European Union (EU) airport security regulations, rising passenger traffic and the increasing need to upgrade installed security equipment and integrate it with newly implemented technology.
Opportunities are particularly lucrative in the biometrics and explosive detection sub-segments, analysts said, where small start-up companies offering innovative technologies can expect favorable financial backing from venture capitalist firms.
"While there are over 491 airports in Europe as of March 2006, another five to six airports are currently under construction with a plan for 20 other airports to be upgraded," said Frost & Sullivan Financial Analyst Rani Cleetez.
"In addition, the privatization of certain European airports will necessitate better security equipment in order to meet the latest international security standards, as well as to ensure world-class airport status."
Analysts said EU legislation aimed at imposing standard security requirements across all member states is likely to heighten demand for airport security equipment.
The European Commission moved to pass legislation in 2005 to bring simplification, harmonization and clarification of existing rules in order to improve levels of security in the civil aviation industry across the EU. This refined existing measures contained in the 2002 regulation and led the EU to pass the legislation aimed at imposing standard security requirements across all member states.
This initiative is likely to increase demand for more advanced security technologies, including biometrics and advanced scanning technologies.
These positive trends aside, analysts said the sluggish response from the EU and individual governments when it comes to prioritizing airport security has resulted in low purchase rates for airport security equipment. The high costs associated with the purchase of airport security equipment also remain a major barrier to the faster adoption of this increasingly essential equipment.
"However, this is all likely to change with the increased government budgets available for the countries looking at entering the EU," said Cleetez. "The EU's decision to standardize airport security measures across member countries is also expected to go a long way toward alleviating these concerns."
Going forward, analysts said the biometrics sub-segment is likely to witness major growth. This is particularly likely given the renewed push by European authorities to study measures similar to the U.S. Registered Traveler program, after uncovering an alleged plot to blow up passenger jets en route to the U.S.
Concrete decisions regarding deployment are due in late 2007 or 2008, analysts said, meaning this market presents robust potential opportunities for venture capital investors.
Source: Frost & Sullivan.