Sniffing Out Bombs Before Takeoff. WILL TICKET PRICES REFLECT COSTS?

LIKE consumer demand for the fabled ``better mousetrap,'' the world seems ready to beat a path to the door of the company that devises a better bomb detector. ``The potential market for explosives detection equipment is in excess of $1 billion,'' says Tina Rizopoulos, an analyst with Paine Webber in New York. She points to an instant market for the first such device - at the US State Department's roughly 120 embassies and 140 consulates around the world, not to mention the 1,400 airport concourses in the United States alone.

``What we've got are rudimentary systems that are not really able to detect bombs,'' Ms. Rizopoulos says.

She refers to the thousands of X-ray machines in place in airports and embassies worldwide, most of which cannot detect plastic explosives in luggage, but only the metal fuses, batteries, and timers that detonate them. Hidden in a cluttered suitcase interior, fuses can be difficult to spot.

Public pressure for increased security - without long delays or prohibitive costs - is mounting in the wake of the Pan American Flight 103 bombing that killed 270 people. In committee hearings in the US House of Representatives last week, congressmen and relatives of those killed in the December bombing over Scotland urged that more money be spent on high-tech equipment to detect bombs in luggage.

Already, the Federal Aviation Administration and State Department have spent millions to fund development of thermal neutron activation (TNA) detectors, ``mechanical sniffers,'' and ``backscatter'' X-ray machines.

Since the Pan Am bombing, the FAA accelerated the timetable for delivery of six TNA machines - a radical new radioactive approach from Science Applications International Corporation of La Jolla, Calif.

AT these TNA machines, each costing $1 million, a conveyor belt hauls baggage through a stream of subatomic particles. The gamma rays flying off the baggage are then analyzed by computer for the telltale atomic signatures of various explosives. Some experts say this approach is technologically impressive, and may provide an ultimate solution.

``A terrorist can't stop gamma rays; it's the solution of the future,'' says John Flinn, a Stafford, Va., consultant on explosives detection who previously served with the US Secret Service.

Yet, Mr. Flinn also says the current generation of TNA equipment is too big and expensive. And even this high-tech response will not provide the ultimate stopper for terrorist bombs. A bomb could be encased in a special wrapper such as cadmium TNA can't see through.

Aside from the radioactive bombardment technique, there is another detection method with promise: the mechanical sniffer. The sniffer, called EGIS, is made by Thermedics, a Woburn, Mass., medical-instrument maker. It is a portable, 300-pound, $135,000 machine that can detect traces of various explosives down to one part in 100 trillion by ``sniffing'' a sample of air in or around baggage.

Full-scale production of EGIS begins this spring, with first units to be delivered to the State Department, which will use them to check vehicles entering US compounds. A different version is to be sold to the US Customs Service to detect traces of cocaine and other drugs - a potential $1 billion market, Rizopoulos says.

Thermedics has another, $235,000 version of the sniffer that looks like a phone booth. Airline passengers walk through the booth, where an air sample is whooshed aside for analysis.

With the airport passenger sniffer operating at the rate of just two passengers a minute, it is still too slow. Critics also suggest that a sniffer might be fooled if terrorists encased plastic explosives in an impermeable plastic that would contain any vapor.

But Thermedics president John Wood believes there would still be trace vapors to detect. His company is also aiming to increase the throughput of passengers to 10 a minute - about what it takes now to go through metal detectors and X-ray equipment.

US airlines last year spent an estimated $500 million on domestic security, according to the Air Transport Association.

Craig MacKay, senior vice-president for marketing at AS&E, a manufacturer of X-ray security systems, estimates that the annual worldwide market for X-ray detectors is 800 to 1,000 units (at less than $100,000 a machine), or about $75 million to $80 million.

A new technology explosives detector might boost the market into the billion-dollar category - but could also increase ticket prices as airlines absorbed the cost of new equipment.

Though radically new technology is still being developed, backscatter X-ray machines are capable of highlighting plastic explosives. The backscatter machine detects them by pointing a pencil-thin beam of X-rays, rapidly scanning luggage. The X-rays, scattered backward and forward, reveal plastic explosives in bright white relief.

``Unfortunately, no matter how good the machine's operator is, a bomb is very easy to get past a conventional X-ray system,'' says Mr. MacKay.

``Technology is important,'' adds Michael Kraft, an aide in the State Department's office of counterterrorism. ``But there are other ways of trying to head off terrorists, through better police work'' and by trying to get countries to unify against them.

You Think US Gas Is Expensive? . . . or Cheap?

Here's what you'd pay per gallon in other countries:

SUPER EXPENSIVE Abidjan, Ivory Coast $4.16 Tokyo, Japan 4.10 Milan, Italy 3.80 Naha, Okinawa 3.77 Copenhagen, Denmark 3.75

SUPER CHEAP Caracas, Venezuela .14 Lagos, Nigeria .30 Quito, Ecuador .37 Santo Domingo, Dominican Republic .53 Kuwait .54

Source: Runzheimer International

Wall Street Studies Corporate America What global research firms kept an eye on the most companies in 1988?

COMPANIES REPORTS

FIRM COVERED GENERATED Merrill Lynch 1608 1847 S.G. Warburg 1444 605 Shearson Lehman Hutton 1103 691 Prudential-Bache 1082 1764 Goldman Sachs 996 1140 James Capel 926 328 UBS Phillips & Drew 913 1003 Kleinwort Benson Securities 907 1300 County NatWest 885 396 Drexel Burnham Lambert 854 1960 Salomon Brothers 841 658 Barclays de Zoete Wedd 788 1595 PaineWebber 745 867 First Boston 711 1221

Source: Nelsons's 14th Annual Survey of Investment Research

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