New types of detection equipment will become a priority after British police foiled a plot to blow up planes.Makers of security equipment are the most likely to benefit from the heightened alert at airports after British police foiled a plot to blow up planes flying between Britain and the US.
Authorities said the planned attack appeared to involve liquid chemical threats, prompting US officials to ban passengers from carrying on beverages, shampoo and other common items.
The threat of people turning common fluids into weapons will likely inspire new investment in airport security systems, security consultants said, potentially boosting companies such as defence contractor L-3 Communications Holdings and diversified conglomerate General Electric (GE).
"The days of a terrorist just having a hand grenade and threatening to pull out the pin are basically over… It`s now focused on more sophisticated explosives such as the liquefied explosive," said Matthew Farr, senior homeland security analyst at Frost & Sullivan, a consulting firm.
"That`s a highly advanced threat and our security today needs to be able to meet that threat," said Farr.
The problem is that even the most advanced scanning machines cannot detect liquid explosives.
"It`s certainly a new threat that the systems we`ve invested in up to this point aren`t prepared to address," said Carl Rysdon, VP of homeland security and critical infrastructure at diversified manufacturer Honeywell International, which makes airport security products including perimeter controls, video monitoring systems and gas detection devices.
"Our current scanning technology can tell if you have some liquid in your bag, but we can`t tell you if it`s the right liquid or not," Rysdon said. "There is no way to distinguish that now."
Creating new types of detection equipment is bound to become a priority for manufacturers, given the emergence of new threats, analysts said.
"Unfortunately it is the type of event that gets people thinking about these sorts of things more often," said Eric Schoenstein, principal at Jensen Investment Advisors, in Portland, Oregon, which owns GE shares.
GE, a leader in the security business, is in a good position to develop new products as the technology overlaps with its growing medical equipment business, he said.
"It`s one of many platforms that they [GE] have got good growth opportunities in," Schoenstein said. "It`s certainly something that, unfortunately for the world we live in today, probably is a growth opportunity."
GE declined to comment on the matter. Its shares rose 39c to close at $32.67 on the New York Stock Exchange.
New York-based L-3, which makes devices used to inspect travellers` luggage at major airports, said it had no immediate comment. Its shares climbed 4.9%, to $69.83. Honeywell shares were up 0.3%, at $37.24.