This is a partial transcript from "Your World with Neil Cavuto," November 25, 2004, that was edited for clarity.

STUART VARNEY, GUEST HOST: One guy helping to keep these air travelers safe is Frank Lanza (search).

Frank is the CEO of L-3 Communications (search), a company behind many of the airport scanners in use and approved by the Transportation Security Administration (search) at airports all around the world.

Frank, welcome.


VARNEY: Look over the horizon for me, if you would. What's the next generation of scanners and detection devices that you're going to bring into the airports?

LANZA: Well, we just got recertified a couple of months ago for our next generation system, which will start being delivered in the first quarter of next year.

VARNEY: What does it do?

LANZA: Well, basically, it speeds it up dramatically, so you can get more passengers through. It's networked so one operator can look at many machines. It's got lower false alarm rate, which also saves labor.

VARNEY: But it's basically a baggage-checking device.

LANZA: For checking baggage.

VARNEY: For handguns in checked baggage.

LANZA: No, this is for bombs and for handguns and for weapons. In other words, the checked baggage systems, unlike the carry-on bag, which does not do a good job on bombs, checks for bombs as well as weapons. OK? So it's a good system for anybody shipping bombs.

VARNEY: As soon as you introduce new technology, the bad guys try to look for a way around it.

LANZA: Of course, yes.

VARNEY: So you've got a window of opportunity to stay ahead of the game.

LANZA: That's what we're trying.

VARNEY: How long is that window of opportunity?

LANZA: Well, who's going to predict the next act? I mean, as far as I'm concerned, it's Monday morning.

We are spending our own money, about $50 million a year, trying to get the next generation systems, which will start incorporating things like neutrons instead of X-rays, using nuclear or neutron-type devices, which are in development over the next couple of years.

But more important than that is let's say we've gotten most of the checked baggage solved. Now we really have the Achilles' heel with the carry-ons, or the checkpoints.

Carry-on systems now do not check, really, for bombs. I mean, you can walk through a magnetometer yourself, and if you don't have a metal on you, or you have something like happened in Russia several weeks ago, where they had a bomb strapped to their waist, you've got a problem.

So we are accelerating the development of what I call a body scanner.

VARNEY: Let me jump in for a second. You're telling me that I walk through a magnetometer at an airport...

LANZA: Sure.

VARNEY: And I've got a bomb made of plastic or something strapped to me.

LANZA: It won't see it.

VARNEY: It won't be seen?

LANZA: No. You will not see it, and that's the Achilles' heel. That's what I'm trying to say. And what we're trying to do is develop a scanner, which we'll test the first quarter of next year, that will scan your body, and not be intrusive, not using X-rays, which you won't tolerate.

VARNEY: Now, we've got a problem here, with many women complaining about the humiliation and exposure sometimes of the pat-down search.

LANZA: Well, I get searched myself. I get searched every time I walk through the airport, for some reason, and every other time, I get a body search. We want to avoid that.

VARNEY: But have you got anything coming on stream?

LANZA: There's a product.

VARNEY: What have you got?

LANZA: It's called a millimeter portal. It's passive. It does not eliminate X-rays, which you won't tolerate. Through our Department of Defense research over the last ten years, we can scan your body and look for energy coming from your body, like I'm taking a picture of you to determine if you are carrying a bomb or a weapon on you. It's passive.

VARNEY: Is it personally intrusive?

LANZA: No, it's a wire diagram. What happens is no intrusion. What comes on the screen will be an automatic alert of a frame of a person, and if you have something on you, it will show a red alert saying there's something that you shouldn't have.

VARNEY: I want to see that soon. Frank Lanza, thanks very much.

LANZA: Thanks for inviting me.

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