May 26, 2023
A $189 Airport Travel Hack Is No Longer Working Very Well
(Bloomberg) -- Few things are more tiresome than slowly shuffling forward in an airport line with one anxious eye on the ticking clock, especially as US travel surges with the end of the pandemic.
That airport anxiety has become a lucrative business line for Clear Secure Inc. Customers pay $189 a year to breeze through to the front, using the company’s eye-scan or fingerprint technology to avoid the security backups that often develop at peak times.
Only that lately Clear’s lines have been backing up themselves, and annoyed travelers have taken to social media to complain. In interviews, some cited a lack of staff, fickle computers and the at-times clumsy process of escorting people to Transportation Security Administration checkpoints. Some openly wonder whether the Clear Plus service is worth the price.
“Hard to justify the $$ when the line is really long,” Andrea Yoch, a Minnesota businesswoman, said in a recent tweet about her slog through Minneapolis-St Paul International Airport.
Clear’s success may be partly responsible for the complaints. The company has logged explosive growth, forcing it to rapidly hire and train new staff. While it doesn’t disclose paid subscribers, Clear reported a 53% increase in the first quarter from a year earlier.
The company also faces a review of “security vulnerabilities” in which the TSA is investigating Clear’s process of verifying people’s identities, TSA Administrator David Pekoske said. He didn’t comment on the lines, but it’s possible that the added ID checks the TSA has imposed are adding to the waits.
In a statement, Clear said its business is thriving because travelers are pleased. It plans to expand lanes at major airports such as at Atlanta Hartsfield and Washington Dulles, and has increased its airport staff 35% this year compared with 2022.
“Obviously, travel is hard and getting harder, but we know that traveling with Clear Plus is better and faster because we hear it from our members daily,” the company said, while declining to comment on the TSA probe.
This summer is shaping up to be the busiest travel period since 2019, and lengthy waits at US airports will likely be common. Clear’s expedited screening might be a welcome alternative for vacation-bound Americans if it offers reduced wait times. The service appeals to business travelers, a market that has yet to return to pre-pandemic levels.
Read more: Americans Flying Abroad Face Bigger Fares and Crowds This Summer
Clear doesn’t do any actual security screening of passengers, a process reserved solely for the TSA. The New York-based company verifies customers’ identities and escorts them to the front, using revenue-sharing agreements with the airports or airlines that control the lines to secure an advantage for its fliers.
A Clear Plus subscription, available at 52 airports, is 12 times more expensive than the TSA’s PreCheck program, which costs $78 for five years and allows people to keep shoes on and liquids in bags. Some airlines and corporate partners offer discounted or free Clear memberships.
Yoch, who is president of the Minnesota Aurora women’s soccer team, noticed longer waits at Clear during the past six months, she said in an interview, adding that normal TSA lanes have often been faster. Her experience was echoed by more than 100 people who have posted complaints about Clear on Twitter since mid-April. They cited backups at major hubs such as Atlanta Hartsfield, New York LaGuardia and San Francisco International airports.
Kamran Asghar, chief executive officer and co-founder of ad agency Crossmedia Inc., tested Clear Plus with two colleagues at Kansas City International in late April. One went through the regular TSA line, one used PreCheck, and Asghar went through Clear. The others both beat him through security, he said.
Clear wasn’t adequately staffed, its computers added to the delays and the escort process was cumbersome, Asghar said in an interview. “It’s gone completely backwards in efficiency,” he said.
There’s also pressure from Congress, where members of the House Homeland Security Committee have demanded Clear customers use the latest TSA technology to verify people’s identities instead of the company’s alone, according to a letter sent to the agency in December.
Read more: Lawmakers Cite ‘Vulnerabilities’ in Clear Airport Screening
Clear, which went public in 2021, has a market value of almost $4 billion. Co-founder and CEO Caryn Seidman-Becker has touted a broader mission to get people moving through lines, including for sporting events, medical records and social-media platforms.
Justin Oberman, a former TSA official and longtime Clear critic, said the company’s limited mission clashes with the agency’s security edict, and its rapid growth creates problems: the more people who join Clear, the harder it becomes to ensure they can skirt long lines.
“When you add in space and staffing and economic constraints, then you’re getting to a stage where it’s going to collapse of its own weight,” said Oberman, now an aviation and security consultant. “If everybody cuts in line, the line cutters will start waiting.”
Not everyone is critical. Numerous users tweeted praise of Clear for allowing them to sidestep security gridlock.
Joshua Reilly, a Needham & Co. analyst who recommends buying Clear, said the company has expanded its airport footprint to address growth and scores well on customer satisfaction. “People have been too critical of the company,” he said. “From my perspective, you always are going to find people who are not happy with a service.”
Two of the five Wall Street analysts tracked by Bloomberg recommend buying the stock, with three saying hold. Short sellers have sold borrowed shares representing about 14% of Clear’s float as of May 24, wagering they’ll be able to replace them later at a lower price.
Jonathan Page, a pastor at the Herndon United Methodist Church in Virginia, was supportive of Clear after joining in 2018 after almost missing a flight. But in the past six months, “it’s pretty consistently understaffed,” he said in an interview.
On May 9, he tweeted a photo of the line at Dulles. A Clear staffer told him it was faster to go through TSA lines, he said. For a Dulles flight in April, he waited 10 minutes, while TSA lines were nonexistent.
“It’s just another example of how I’m paying however hundred dollars a year to wait in line,” Page said.
--With assistance from Jack Gillum.
©2023 Bloomberg L.P.