* Project "on hold" two years after introduction
* Controversy rare given Israel's security repute
By Dan Williams
JERUSALEM, Oct 11 (Reuters) - An anti-hijack code system that Israel had planned to require of all incoming planes has been bogged down by protests from pilots who argue it would raise new risks, including being shot down by accident. Israel issued the Security Code System (SCS), a customised "smart" keypad, to pilots of five foreign carriers in 2008 in what it called a trial run for the credit card-sized device's general distribution among planes that enter its airspace.
But various global aviation groups have voiced misgivings about the SCS, which purports to point out planes that have been commandeered for al Qaeda-style kamikaze attacks.
Among those reluctant to accept the Israeli innovation has been the European Union, the source of most flights to Tel Aviv. The currently SCS-compliant carriers are non-European: Delta (DAL.N), Continental CAL.M, U.S. Airways LCC.M, Air Canada ACa.TOACa.TO and Ethiopian Airlines.
"It's on hold," a spokesman for Israeli Transportation Minister Yisrael Katz said when asked about SCS distribution.
Under the system, pilots approaching Israel have to type in a code, on the assumption hijackers would fail the verification. A pilot being threatened by a hijacker is expected to enter a bogus code. Either way, Israel would have time to respond.
Complaints against the SCS include that it could create a privileged class of pilots who pass Israeli vetting, that loss or malfunction of the device would cause costly midair delays; and that Israel would be rendering its airports off-limits to pilots from other routes who need to make emergency landings. Some aviation groups say any security benefit would be off-set by the possibility of pilots mistakenly entering wrong codes or, in a hijacking, entering the right code in hope of buying time before Israeli warplanes mount an interception.
"The first priority of pilots is to ensure the safe arrival of their passengers and crew. Therefore, the threat of action by the IDF (Israel Defence Forces) may also act as a strong deterrent to pilots to enter a stress code when the situation may suggest that they should," the International Federation of Air Line Pilots' Associations said in a July 26 statement.
The idea that a country would authorise the shooting down of a civilian airliner suspected of being on a crash course has received currency since the Sept. 11, 2001 attacks on the United States.
For Israel, there is a precedent in its downing of a Libyan passenger plane over the then-occupied Egyptian Sinai in 1973.
Among those lobbying against the SCS has been the Israel Air Line Pilots Association, which counts many former fighter pilots among its members.
"Fear (of an accidental shootdown) is definitely a major motivation," said a person familiar with the Israeli association's involvement in the campaign.
Israeli jets are nowadays scrambled against perceived aerial threats as often as once a month, a security official said.
Another Israeli official, who spoke on condition of anonymity, said the SCS is intended to work as part of a multi-layered defence system, and would prove its worth.
"This will make Israel proud yet," the official said, adding that the SCS could undergo upgrades to address shortcomings. Responding to the European objections, Giora Romm, director of Israel's Civil Aviation Authority, wrote back on Sept. 1 to say that SCS distribution among European airlines would be suspended while the sides meet "in order to address and resolve any concerns the EC (European Commission) might have regarding the implementation of the SCS system in EC Carriers".
Those meetings have yet to take place. (Editing by Angus MacSwan)