Paul Phelan

March 26, 2013

Six of Australia’s peak commercial aviation bodies have launched a groundbreaking policy document that could well replace the government’s Aviation White Paper in the shaping of their organisations’ futures.

The document, titled The Australian Aviation Associations Forum Aviation Policy, identifies 15 significant problems, besetting the industry across the same number of areas, and spells out the forum’s proposals for available solutions to each.

In doing so, the Forum seeks a comprehensive restructure of the environment in which aviation operates, through the establishment of a strong stand-alone aviation policy base that will be proof against the vagaries of political and administrative changes in direction.

On December 12 the Australian Aviation Associations Forum (AAAF) chief executive officers met media at Mascot to announce the program’s official launch, having already circulated its 24 page manifesto to all federal parliamentarians and their advisors and senior bureaucrats, as well as to each member of their own organisations.

The six Forum member associations’ CEOs and their organisations are Phil Hurst – Aerial Agricultural Association of Australia, Peter Meguyer – Association of Flight Instructors, David Bell – Australian Business Aviation Association, Paul Tyrrell – Regional Aviation Association of Australia and Marj Davis – Royal Federation of Aero clubs of Australia.

The forum represents a significant majority of aviation operators other than the heavy jet operators, and includes aircraft owners, service providers and participants, and has been operating successfully since 2008.

Forum Chairman Chris Manning said the initiative represents a new level of cooperation amongst peak aviation bodies, which have identified a range of practical policy initiatives for government and industry:

“Aviation plays a critical role in providing rural and regional Australians with access to services that metropolitan Australians are fortunate enough to be able to take for granted”, said Mr Manning.

“In addition to easy access to education and business, aviation’s fundamental role in supporting healthcare for rural and regional Australia is easily recognised and supported by all governments.

“The policies call for ongoing access for regional services to the capital city airports, improvement of support for remote area airports and reintroduction of the Enroute Subsidy Scheme.

“It has been decades since a single government agency has taken on the role of fostering and promoting aviation in Australia and governance and regulatory arrangements remain at the heart of restraints of aviation jobs and growth.

“At a time when regional aviation in particular is suffering from pilot and engineer shortages, there is a vacuum of policy aimed at addressing the medium and long-term potential of the industry to make an even larger contribution to the economy and to sustaining satisfying careers.

“The forum provides a comprehensive framework covering regional access and equity, industry regulation, education and training, manufacturing, technology and taxation that will significantly boost the productivity of the sector.

“Forum participants recommend the policies to all political parties and look forward to working with governments to make aviation and even more vibrant part of the Australian National economy and community,” said Mr Manning.

Aviation policy.

The forum attributes the ongoing lack of focus on aviation policy to compromises by political parties through ministerial arrangements, and the endless switching of portfolios and departmental structures over recent decades.

“There is a distinct lack of any government instrumentality with a clear charter to promote aviation, and yet it is the preferred mode of transport for business, tourism and industry.”

The solution, says the forum, lies in the development of specific stand-alone aviation policies, commitments to establishing a Minister for Aviation and a Department of Aviation; or at a minimum, and improved ministerial aviation focus through a Parliamentary Secretary, and a clearly discrete Department or at least Aviation Division. It also seeks government engagement with industry through a Ministerial Council with leading industry associations, and a review of the governance through CASA’s apparently dormant board:

“The CASA board does not appear to contribute to aviation policy or to provide direction to CASA. The role of the CASA board should be reviewed to include industry reputation with authority to direct CASA.

The forum also wants the defined structural responsibilities for aviation-related government agencies to include:

  • CASA – Ensuring the aviation industry functions at an acceptable level of competency and safety.
  • ATSB – fostering and promoting aviation safety (separately from CASA) and administering the Transport Safety Investigation Act.
  • Airservices Australia – current responsibilities, other than removing ARFF services and making provision and management of ARFF the responsibility of airport owners; and compliance with standards established on a risk basis by the Department, and
  • A Department of aviation or aviation division within the Department. This would foster and promote aviation, developing regulations, consulting with industry and managing regulatory reform, aviation security, airport policy, airspace management, and the airport rescue and firefighting (ARFF) policy. It would also continue the work of NASAG,

NASAG (the National Airports Safeguarding Advisory Group) comprises of Commonwealth, State and Territory Government planning and transport officials, the Department of Defence, CASA, Airservices Australia and the Australian Local Government Association.

They believe government must also direct CASA to work more cooperatively with peak industry associations to develop recognised codes of practice that will support aviation safety while reducing compliance costs, in line with ICAO recommended standards and practices.

Also recommended is the maintenance of ASTRA as the primary consultation forum on technology issues for aviation navigational technology direct reporting to the Minister.

Fostering and promoting aviation.

There is a lack of provision in the Civil Aviation Act 1988 of any direction or head of power to foster and promote aviation in Australia. This has a serious and ongoing negative impact on the way CASA operates, and the way it interprets its role and the legislation it manages for the Commonwealth without consideration of the impact of its decisions on the industry.

 in stark contrast with other aviation nations there is no legislated direction or head of power to foster and promote aviation, while significant aviation nations such as Brazil, Canada, France and the USA all have strong support measures in place for their indigenous aircraft and component manufacturing industries.

Policy actions the forum believes need to be established are:

  • Amend the act to include a new power and responsibility for CASA and other aviation agencies to ‘foster and promote the aviation industry in Australia.’
  • A letter of direction from the proposed Minister for Aviation and other aviation agencies, clarifying the means by which CASA is to observe this new responsibility.
  • Government direction towards aviation agencies to incorporate into their corporate planning and procedures that requirement to consider how their policies and regulations will foster and promote aviation.
  • All agencies to cooperate strongly with organisations such as IATA and the tourism industry to develop policies that support aviation.

Australia’s aviation regulatory system.

The reform of Australia’s aviation regulatory system had as its founding guidelines, simplicity and clarity, a two-level rule structure, international harmonisation, outcome-based regulation; and all in plain English.

Instead: “The inability of the new regulations to establish international harmonisation between Australia and major aviation countries is a missed opportunity that underlines the inability of CASA to maintain a steady focus on clear objectives,” says the Forum.

“The new regulations are characterised by a complex approach in both content and drafting style, and seek to obfuscate operational clarity and certainty for the likelihood of a successful criminal prosecution, with a complete failing of the original intent of “safety through clarity”.

“The consultative mechanisms CASA has put in place and especially the standards consultative committee (SCC) and the new safety forums are founded on a flawed culture of instructing industry on CASA decisions rather than genuine consultation.

“Comparisons of regulatory reform with other countries highlight the failure of CASA Management to contain the regulatory reform process, to strategically manage workload on both CASA and industry, or to consider the capacity of industry to adapt to significant change,

“There are currently more than 50 individual regulatory change projects that CASA has established in addition to the already significant workload of the regulatory reform program. CASA has demonstrated very poor control of the workload involved in developing regulations, to the point of the regulatory reform program has itself become a potential threat to aviation safety.

“It is not appropriate for the aviation regulation enforcer (CASA) to draft the law. Policy and regulatory development should be vested in the Department.”

The policy actions (solutions) the forum seeks are:

  • The removal of the regulatory reform process from CASA into the proposed new Aviation Department or division;
  • Strong formal and informal consultative relationships with industry at every stage of the regulatory reform process, and reform based on a sound understanding of international best practice and the regulatory regimes of key trading partners and neighbours where relevant;
  • No uniquely Australian rules unless industry can demonstrate a need;
  • As a priority, a reduction of “red tape” and simplification of processes within the regulator;
  • A review of the US regulatory flexibility act and the US paperwork reduction act with a view to applying similar principles to Australian legislation.

Aviation taxation.

“The current system provides no incentive to CASA to be more efficient. The system provides no incentive for updating of the fleet, due to ATO rulings on useful working life of aircraft, which works in direct opposition to the goals of encouraging new aircraft for improved safety and better environmental performance including both lower noise and lower emissions.”

A nine-point catalogue of suggested policy actions calls for:

  • Abolition of the carbon tax.
  • A 60% first-year depreciation of aircraft assets.
  • A 150% write-off aviation research and development.
  • Provision in tax law for aviation company income-averaging across the rolling five-year span.
  • Establishment of a high-level ATO working group to identify and remove impediments to the aviation industry as in other sectors.
  • Access for all commercial pilot candidates to participate in the HECS scheme.
  • Tax exemptions for agricultural and emergency service operations;.
  • A joint industry/departments/CASA efficiency task force to reduce the need for additional cost recovery, and
  • An industry task force to consider the long-term funding of aviation regulation. This would include a more equitable application and levying of the fuel tax, charging international airlines for the services provided, and identifying potential contributions covering the costs of aviation regulation by other government agencies also charging the industry (such as Airservices etc). A key focus of such a task force should be to identify those operations currently undertaken by CASA and other aviation regulators that deliver a community rather than industry benefit, and to fund those activities from consolidated revenue rather than through industry cost recovery.

Education and training.

For aviation skills shortages in flying and engineering, the forum blames the lethargy of successive governments for a political policy vacuum that has brought the cost of basic airline training (now usually borne by the pilot) to around $100,000, and the supply of licensed aircraft maintenance engineers to a point where it falls far short of national demand.

In line with the proposed policy to foster and promote aviation, the forum seeks a root and branch review of aviation industry vocational training and policy, including the funding of at least one aviation high school in each state and territory, based on the successful Queensland model.

Community-building and sustenance in rural, regional and remote areas.

A wide range of critical or essential services ranging from medical access to freight to education is threatened by the loss of operators due to cost pressures, changing demographics and government policy indifference.

“The trend is continuing and represents a significant decay in regional equity and access in terms of services to communities outside major cities and regional centres. The forum knows that despite government’s commitment in the Aviation White Paper, a replacement for the previous Enroute Subsidy Scheme has not eventuated, and that there is no national system to ensure aviation services to regional, rural and remote areas as a critical part of both the national infrastructure and access to Australians in those centres and regions.”

Policy actions sought are those of honouring the White Paper’s commitment to establishing an Enroute Subsidy Scheme, and a strategic national financial support system to ensure services to other non-viable remote locations.

General aviation infrastructure and operating environment.

Failure to identify GA infrastructure is critical to the national interest, has left the industry sector to fend for itself because governments have not objectively determined its benefit to the community and the economy. The forum observes that: “the contribution made to the Australian economy by GA was underestimated in the government White Paper, where it claimed the sector only employed some 3000 people. In fact, GA employs many times that number.”

Significant GA contributions to the national wellbeing include providing sustainable employment in aviation jobs, facilitating business transport, tourism, emergency services and general transport in the public health environment, the delivery of essential business services in remote areas, specialised aviation services of all kinds, links with provincial and State capital centres, the training of a significant number of airline pilots, and access to remote communities for services that are taken for granted in more populous regions.

The Forum is also critical of the regulatory attitude in terms of heavy-handed regulation and the actual attitude of CASA and others, which it says must be changed so as to clarify the GA should be regulated to as to promote development through simpler and more cost-effective regulation.

A range of proposed remedies includes:

  • Joint industry/government review and implementation of the previous GA action agenda which was published but never implemented;
  • Each state/territory should establish a complimentary aviation policy that recognises and protects the value of aviation in their jurisdiction. In particular, state/territory’s should focus on policies that identify and support social, welfare, health and economic benefits of aviation in regional, rural and remote areas.
  • Remove the mandatory requirement for GA air operators holders to have a drug and alcohol management plan but maintain CASA random testing.
  • Exempt all GA operators from the requirement to have a transport security plan.
  • ASIC card validity for GA personnel should be extended to 5 years.
  • CASA should better delineate between airline type operations and GA in the classification of operations which in turn should drive a simplified approach to the regulation of GA.
  • Increased government support for aviation safety initiatives from the GA associations, including training, safety awareness and safety promotion activities.

Skilled maintenance providers.

Throughout Australia the aviation industry faces longer-term shortages of skilled maintenance providers due in part to an ageing engineer population, a training skills shortage, and a crisis in regulatory framework.

“The new CASA regime for maintenance licensing has totally missed its objective of being harmonised with the European countries and being an improvement on the previous framework. The Australian aviation maintenance qualifications are now unique and not recognised by our major trading partners, nor does CASA automatically recognise European, US or other qualifications. Other countries have been successful in developing a qualification that is recognised by both Europe and the US.

“Maintenance organisations have been confronted with a new and complex regulatory regime that will not sustain either the industry or the services it provides to aircraft operators.

“The ‘unintended consequences’ of this new regime include a lack of harmonisation internationally and with neighbouring countries, Australian industry being placed at a disadvantage to competitors, unworkable distinctions between organisations in Australia and significantly increased costs of compliance.

“The new system of licensing and training of personnel and regulation of the maintenance and repair businesses is unique in the world. It represents a significant de-linking of Australian standards and regulation from international (including Pacific) best practice, and produces no identifiable benefits such as improved safety, reduce costs or greater simplicity.

“Only a thorough independent review – closely considering the advice of local industry – will enable the development of a better system.”

To solve these problems the forum seeks an independent enquiry with significant industry representation and which must make an interim report within a tight ninety-day timeline. “The enquiry must have broad terms of reference to enquire into maintenance training, licensing, and funding. Also current maintenance repair organisation regulation, including consideration of mutual recognition with overseas jurisdictions, simplification of regulations, and reducing costs to industry.

The proposal does not include a recommendation that CASA participate in the investigation.

Aviation manufacturing.

The tribulations of aircraft and parts/products manufacturers are documented in a history of fiascos and are largely summarised by the statement that “Australia is not on a level playing field.”

“Aviation manufacturing in Australia has been characterised by great innovative products hamstrung by governments’ indifference and bureaucratic impediments. The lack of a robust aviation manufacturing policy has left individuals and companies to self-develop global markets and prevented significant investment in the Australian aviation manufacturing industry. Consequently, the sector has suffered in inarguable decrease in capacity and capability.”

Priorities that need to be addressed include skill shortages, bringing innovation in design to fruition and how to progress cost-effective quality manufacturer with a heavily regulated regime:

“Current research and development programs and criteria are not aviation friendly and militate against existing government support flowing to aviation companies. Significantly, increased costs caused by CASA red tape put Australian companies at a clear disadvantage both domestically and in international markets.

“The potential for aviation expertise and jobs to move offshore is real on the current policy settings.”

In this area as well, the forum wants a review of aviation manufacturing impediments, and recommends the provision of a 150% write-off for aviation research and development to encourage skilled jobs in Australian aviation and an indigenous aviation design and manufacturing industry.” Manufacturers join the rest of the aviation community in seeking amendments to the Act to include the principle of fostering and promoting aviation, a focus on developing Bilateral Aviation Safety Agreements and the harmonisation and cross club-recognition of regulations with relevant other countries:

“Aviation should automatically be included in negotiations for any free trade agreement, including fully unhindered export of Australian aviation parts and components. Responsibility for negotiating international aviation agreements should be given to the new Aviation Department/Division.”

Airports

Because its members use airports over a far broader range and capacity, the provision of those facilities can never be taken for granted, nor can the vastly differing attitudes of service providers.

The forum observes that failed assumptions on which airport policy has been based, include the ludicrous proposition that airports actually compete with each other, and that they can be trusted to act in the interests of aviation and not as monopolies.

The fate of numerous airports around Australia also supports the forum’s belief that many rural and remote airports cannot be maintained without support from the Commonwealth.

“There is a policy disconnect between airport policy and wide aviation policy, where decisions on airport development are being made without reference to aviation impacts. Similarly, it was not be integrated into aviation policy where strategic decisions could lead to win-win scenarios.

The worst affected airports are those at urban fringes, where there is no policy cohesion between federal, state and local government in land use management and zoning around airports. These issues have already resulted in developments that degrade airports’ growth capacity, reduce their utility, and in some cases threaten their very future existence, says the forum:

“Some airport owners have deliberately exploited the lack of policy oversight to remove the aviation industry from airports so as to cash in on the real estate value of the airports through non-aviation compatible industries – as witnessed by safety impacts at airports such as Canberra and Bankstown where buildings have compromised operations.

“Similarly, the decline of secondary airports and general aviation facilities at primary airports has been underwritten by poor government policy regarding inappropriate developments that are compromising the ability of these important airports to service the aviation industry. The subsequent loss of aviation support and service businesses and jobs has led to a widespread malaise is continuing to cripple development of the general aviation industry.

The forum acknowledges that while some larger regional airports have survived through industry, resource or tourism growth, a significant number of vital facilities doesn’t enjoy those benefits and need long-range strategic intervention and protection.

Suggested policy actions include:

  • An integrated strategic national airport and aviation policy.
  • Recognition of airports as critical national infrastructure and funding mechanisms to support the ongoing development and maintenance.
  • ACCC to oversee and regulate pricing.
  • Assurance of continued access the regional and business aircraft to primary airports on a fair and reasonable basis.
  • Protection of airports as a primary goal of planning policy and preservation from further destruction of airport infrastructure.
  • Prohibition of airport closure unless an alternative and equivalent airport is constructed and commissioned.
  • Commitment to maintaining, protecting and continuing to develop for aviation purposes and general aviation airport in each Australian capital city.
  • Enforcement of Aerodrome Local Ownership Program (ALOP) deeds to ensure local government retains airports acquired under the plan.
  • Increased education and local government airport owners for Best practice program that identifies airports encouraging GA and the initiatives they use to remain viable.
  • Maintain the airport remote areas scheme or combined into the proposed airport scheme above.

Security

Additional security measures costs continue to affect the industry, and on regional routes the law of diminishing returns has seen security costs soar as a percentage of operator revenue. The provision of sophisticated screening at regional airports may be the gravest overkill of all, when the one-size-fits-all philosophy produces solutions that would be laughable if they were not so expensive.

In extreme cases these may include a 2.5m security fence stretching 20-30 m either side of the terminal, which does nothing but provide additional exercise for pilots moving to and from their aircraft.

To solve these problems forum wants far more meaningful threat assessment, the development of procedures in close consultation with industry, and ongoing financial support for small airports affected by overbearing and unrealistic security requirements.

Insurance and liability

Forum members complain of an additional and unreasonable impost from the Damage From Aircraft Act imposed by a former government to comply with the intent of international treaty obligations.

“In so doing, an additional and unreasonable liability was created for all aircraft operators, whereby they were made liable for any damage from an aircraft, irrespective of contributory negligence or other factors that might otherwise mitigate that liability.

“In addition, the legislation specifically excludes the ’roping-in’ of any other party that may also have played a role in the cause of any damage.

“Consequently, the damage from aircraft act does not work in a fair or equitable way and has been proven to raise a liability, especially for general aviation users, that was not envisaged in the original second reading speech or explanatory memorandum of the legislation.

“In addition, the current government has proposed the creation of a compulsory third-party insurance scheme for all aircraft owners. It is not clear what remedy such a scheme would provide in addition to the current civil remedies, or what market failing it may seek to rectify.”

Suitable policy actions to resolve this issue they say, would be a review of the current proposal in significant consultation with industry and aircraft owners. A further forum recommendation is an amendment to the Act to remove obvious inequities and other unintended consequences, as well is exempting general aviation operations, which was the original intent of the legislation second reading speech and explanatory memorandum. Also requested is the removal of duplication in state-based legislation covering the same issues.

Research and analysis

As amply illustrated by the Aviation White Paper, there is no competent high-level research body to deliver coherent analysis of aviation issues and trends that would serve policy makers and industry.

The forum believes that additionally, statistics collected by the Bureau of Infrastructure, Transport and Regional Economics (BITRE) are collated so as to skew the view of particular industry sectors such as regional airlines and regional airports.

A proposal that carries strong support from several of the member associations is a government-funded Aviation Research Institute that would inform itself, government, bureaucrats and industry of relevant issues and trends, as already happens in other advanced aviation countries:

“The government should partner with existing higher education and research institutions where possible. The Institute should include both the contracting arm to provide research to industry and an extension program to ensure researchers communicated to industry.”

They also recommend a review in consultation with industry of the data collection and allocation processes of BITRE, specifically to ensure they are accurate in the regional aviation and airports environment, and the commissioning of BITRE to undertake a detailed study of the economic and social contribution of aviation to Australia. They want the BITRE to work more closely with international organisations such as IATA to improve the availability of its economic analysis of aviation and to benchmark Australian performance against other relevant countries.

They also believe that any research from the study above should be referred to the Aviation Ministerial Council proposed earlier in their submission.

Technology and the environment

The forum notes that there is enormous potential for environmental improvements through improved access to and use of technology to support air traffic services:

“More accurate guidance and reporting means more direct routes, less time in the air, less fuel burnt and reduced environmental footprint.”

They believe however that there are significant opportunities to maximise the fast-growing menu of navigation technologies for aviation, but that the possible blending of these applications with other sectors is being overlooked, explains Agricultural Aviation CEO Phil Hurst:

“A good example of that is what is going to be the future of navigation systems in Australia. Currently Geosciences Australia are working on a program; Airservices Australia are working on a program; CASA have had a lash at it, but nowhere has it been put back to industry as a coherent discussion paper to say “here are the fors and againsts of this particular direction.

“In the US where they go to a wide area augmentation system (WAAS), they’ve cleverly realised that it’s not just aviation that might have the use of such a system. There’s a use for maritime, for agriculture, for trucking, there’s a whole range of uses for these sorts of system, but here in Australia it’s all going to be bundled onto aviation because there’s nobody to say ‘how about we look at this for the farmers?’ because in every tractor from last year onwards there’s a switch that you can use to go WAAS.”

The group believes there are significant overlooked opportunities firstly to consult closely with various industry sectors on navigational systems advances, and secondly to maintain total transparency of the deliberations of various government agencies which are considering policy:

“Close consultation with industry is essential to ensure the long-term plan for the significant cost impost is manageable.”

Policy actions put forward are:

  • Maintain ASTRA (Australian Strategic Air Traffic Management Group) as the primary consultation forum on technology issues for aviation navigation technology, with direct reporting to the Minister;
  • Coordinate the range of current reviews (including the Geosciences Australia project, CASA and Airservices proposals) of a national navigation and positioning system to ensure consideration of all potential users and contributors including geosciences, aviation, agriculture and land and sea transport.
  • Ensure that any decision on the future technology requirements for aviation includes a comprehensive risk based cost-benefit analysis to ensure the industry can absorb any costs over the short to medium term.
  • Adopt continuous review of the regulatory regime to remove restrictions to new technology and innovation safely.”

Non-aviation issues

Gaps in legislative and regulatory coverage are identified as permitting to continue the impacts on aviation safety of various other technologies without provision for risk assessment or mitigation.

Potentially offending technologies these studies have identified include wind towers, wind monitoring towers, radio masts, smokestacks, coal seam gas plumes, power lines, buildings near runways or proposed buildings that could potentially impact on approaches or departures from airports.

They believe that closer and more informed scrutiny of airport master plans, even those already approved by various agencies, must give detailed consideration to the likely impact of buildings on safe aircraft operation.

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