BUSINESS

Garda wants to convince Washington to adopt Canadian model for airport screening

06/15/2012 05:30 EDT | Updated 08/15/2012 05:12 EDT
MONTREAL - Garda World wants to convince Washington to imitate Canada by giving private security companies control of screening at airports.

In the United States, the job is generally performed by Transportation Security Administration (TSA) employees, while in Canada the work is subcontracted to companies like Garda, the industry leader in airport pre-clearance screening.

At its annual meeting on Friday, Garda CEO Stephan Cretier criticized the TSA, pointing to a House of Representatives committee report published last November that concluded the federal agency was ineffective as at least 25,000 security breaches have taken place in the 10 years since it was launched.

Several legislators, primarily Republicans, have demanded that the TSA's activities be partially privatized.

Seeing a potential business opportunity, Garda (TSX:GW) has started to lobby to sell the merits of the "Canadian model."

However, a 2008 TSA report said screening costs are nine to 17 per cent higher when done by private firms instead of the TSA's 65,000 employees. The findings have been contested by another government agency.

Garda estimates that the U.S. airport security clearance market is worth US$3.5 billion a year.

The Montreal-based company hopes to gain its first U.S. airport contract within two years.

It mainly operates in the cash logistics business in the United States, where it provides armoured truck and money room operations for banks and retailers.

In 2009, Garda sold its business for guarding buildings in the U.S. but believes it will be able to use its network in Canada and experience to win lucrative airport contracts in the United States.

The Screening Partnership Program allows American airports to replace TSA agents with private sector employees. Only about a dozen airports have done so thus far, most notably in San Francisco.

Meanwhile, Garda said it is starting to look at opportunities from the Quebec government Plan Nord development program. It recently opened another office and added employees in two cities. It sees an opportunity to gain further revenues in the natural resources sector in addition to the $100 million gained from Alberta's oilsands.

Garda also protects embassies and oil and gas employees in dangerous areas like the Middle East.

It has 45,000 employees and provides security, cash logistics and global risk consulting to clients in North America, Europe, Latin America, Africa, Asia and the Middle East.

On the Toronto Stock Exchange, Garda's shares closed down three cents at C$8.07 in Friday trading.

Note to readers: This is a corrected story. A previous version said the TSA report was from 2009 sted 2008