MAJOR ISSUES

Overview

Our main issues at present appear to stem from the lack of a coherent set of policies for either transport or regional Australia, although we are aware of substantial efforts by Department of Infrastructure, Transport, Regional Development and Local Government to resolve some of the major policy issues. There appears to be a struggle going on between the economic rationalists who believe that the future of regional Australia should be left solely to market forces, and those who believe that all Australians are entitled to a certain minimum level of service and amenity.

The key issue in understanding the current position of regional aviation is that with a few notable exceptions, the industry provides an inadequate return on investment, and without an adequate return, no industry is sustainable.

The industry is faced with rapidly escalating costs for regulatory services (CASA), security, fuel, airports, and, if the En-route Charges Subsidy Scheme is terminated, then Airservices En-route charges as well. Those operators who have survived have already cut their overheads ruthlessly, and there is little scope for most to grow their businesses due to the shrinking rural population and the effects of the current drought. Yet government imposed and related costs continue to rise, while public pressure in relation to fares is constantly downwards.

CASA Regulatory Costs

Something clearly has to be done about excessively high regulatory costs. The costs are artificially high because much of what CASA does has no safety benefit, and should therefore be abandoned, but field officers seem unable to let go of functions they once performed, even when it is evident that those functions are valueless, and while high priority tasks are either not performed at all or are delayed typically by six months or more, allegedly because of a “lack of resources”. Yet CASA seems disinterested in becoming more efficient. After all, when it can simply charge industry whatever it costs to run its regulatory services, why should it? It is becoming increasingly clear that only an external review will resolve the unjustifiable costs that CASA imposes on the industry.




Security Costs

Security compliance costs are very significant and constantly growing. Yet in most cases the costs do not necessarily enhance security. In a great many cases they appear designed to give the public the perception that something is being done, rather than to actually achieve a practical result. We understand that managing perception is a vital task of government, and we are not suggesting that the enhanced security arrangements are all bad. But we do believe that it is time to review what we have to ensure that the balance between what is necessary and appropriate, and that which is merely very expensive window dressing.




Airport Privatisation

The privatisation of airports brought significant problems for the industry. These include substantially increased costs, loss of investments in buildings and infrastructure, occasional difficulty in accessing appropriate terminal and other facilities, and loss of security of tenure at some airports. The sense of betrayal felt by those who have essentially lost their life savings to airport owners as a direct result of privatisation is palpable.




Staff Shortages

The current staff shortages are the end result of years of neglect of trade training by both government and the industry. We need to do something fairly fast about the overall cost and availability of trade training. The Queensland Government has put its money firmly where its mouth is with the establishment of Aviation Australia and related developments, but more needs to be done by both state and federal governments to encourage and foster trade training. We as an industry need to review how we treat our technical staff and do what we can to make it an attractive career. As an industry, we need to market our industry to school leavers. With low rates of unemployment, we can not expect to get adequate numbers of recruits without effective marketing. We have to realise that we are now competing with industries offering more money, better conditions and less responsibility, and do something about it.




Aging Aircraft

Our current fleet is beginning to age. Yet there are no low capacity airliners in production any where in the world. Perhaps this unanimous vote of no confidence in the future of low capacity airlines is the most telling answer to the question “what is the future of the regional airline industry?” Clearly the manufacturers see no future in producing aircraft for low capacity airlines. What this means is that the existing fleet is going to be with us for perhaps the next ten to twenty years, but we can expect the cost of operating them to the high standards that we require to increase substantially in that time. And since we expect CASA to be an integral link in gathering, analysing and disseminating airworthiness information, its continuing airworthiness function will demand better use by CASA of its existing resources overall in order to allow increasing resources to be allocated to the continuing airworthiness function.




Deteriorating Airport Infrastructure

We are seeing the smaller and more remote airports starting to deteriorate due to lack of funds, which is a potential problem both for the air service operators (including RFDS) and the communities we serve. We believe that there is a strong case for government assistance to the affected communities in order to keep airports open to essential services, including especially aeromedical operations. While the economic rationalists might think that the cost of maintaining runways in remote communities for use by aeromedical services is high, one can only assume that the alternative cost to the public purse of building, equipping and staffing hospitals in those areas if aeromedical services were to fail, would be difficult if not impossible to sustain.




Infrastructure Recognition

The Federal Government does not record aviation infrastructure seperately. It is recorded under road infrastructure. So if, for example, you build a runway or taxiway or other aviation structure it is recorded by the Government as a statistic towards roads. No one from the Government to date has given thought to aviation having its own statistical category. Although we understand that this is being amended we do question how Infrastructure Australia analyzed the countries aviation infrastructure needs. This may explain to some extent why in 90 odd recommendations from Infrastructure Australia to Government about the countries infrastructure needs, only one related to aviation.

Conclusion

Unless we can find solutions to these issues, we must expect to see a continuation of the current trends. We must expect that there will be fewer but larger airlines, as the smaller ones are either acquired by the larger companies or fall by the wayside. We must expect to see the smaller and older aircraft gradually retired as they reach the end of their economic lives, leaving the smaller communities without scheduled air services, and the larger aircraft to service fewer but more profitable routes. The centre of gravity of regional airlines will tend to follow the population drift to the major coastal cities, where they will face increasing competition from the major airlines as they build up the routes to the point where heavy jets can be justified.

What do we want as an Association? We do not want hand outs. What we want is a fair go for our members and for the communities who depend on us for their social and economic well-being. We want government to recognise that regional aviation is different from the trunk route airlines. While the major airlines fulfil an important role, many of our operations are essential to the social and economic well-being of the communities in rural and remote Australia. With a declining regional population, policies based purely on market forces can only be expected to accelerate the demise of regional aviation and with it rural Australia.