Securicor Says Airport Law Will Hurt Profit

The largest operator of airport security in the United States warned that its profit will be hurt by a new U.S. law, which President Bush plans to sign today, making the federal government responsible for airport safety.

London-based Securicor Group, which screens baggage and provides other services at 34 U.S. airports, said the planned law will eat into profit at its U.S. unit Argenbright Holdings. House and Senate negotiators last week agreed to make most airport security screeners federal employees for three years as the government seeks to assuage public concern about air travel after the Sept. 11 terrorist attacks.

The law’s “implications would be greatest for Securicor, which has a 40% share of the U.S. market,” said David Greenall, an analyst at Commerzbank in London.

Securicor’s British shares have lost a quarter of their value this year.

The company will face a net one-time charge in the “low single-figure millions” of pounds for winding down its aviation-related business, spokesman Scott Fulton said, adding that the rest of Securicor’s business will be unaffected.

Argenbright’s U.S. aviation-related business has annual sales of less than $172 million, the company said. Commercial security has annual sales of $180 million, it said.

Under the U.S. proposals, airports will be able to seek private contractors or local police for security after three years.

The company’s Argenbright unit provides security checks at U.S. airports, including Los Angeles International Airport, Dulles International Airport in Washington and Newark International Airport in New Jersey.