Mutiny of the Bountiful

The Parliament at least was already listening. Last December, the Senate set up an Inquiry into “The Organisation and Operations of the FAC and CAA” by motion of Senators David MacGibbon and Norm Sanders, both pilots in high places. (See the box for some of the privileged highlights). The impact of the GAIT charges (refer p. 10, Mar 89 AA) was also brought up in the NSW Parliament with Beryl Evans stating that she had “no doubt that these charges are . . . another crack at the aviation industry”.

The Senate Inquiry expects to report in October 1989. Thus Australian Aviation is taking a detailed look at the situation in this special feature timed for the benefit of the Senate Inquiry and, we hope, the industry.

Present Conditions

For the last half century the industry accepted that the Government was generally doing things right. But with the way the new policy of cost recovery is being implemented, the industry questions if the government is now indeed doing the right thing.

Today there is a cold front passing through an industry that is now only considered in terms of what is best for ‘consumers’. Indeed the motto of the ‘new’ Civil Aviation Authority (CAA) is to “enable more people to benefit from safe aviation”. One wonders if they mean paying passengers or bureaucrats.

The head of the old Department of Aviation and now the Chief Executive Officer of the CAA, believes that “questioning and criticism . . . is one of the purposes of charging: to bring home to the user the costs involved so that rational debate can ensue on the worth of the services provided”.

Well, sorry boss, this debate isn’t rational anymore, but there’s plenty of questioning and criticism. His statement contradicts the 1984 Bosch Report recommendation that only a direct link between expenditure and cost recovery would provide the necessary discipline to improve efficiency. See the clever sidestep? Bosch wanted cost recovery to smarten up the bureaucracy. What the bureaucracy is doing instead is “bring(ing) home to the user the costs involved”. Each aircraft on the Australian register is still feeding 1. 01 public officials. This compares with the figure found by Bosch in 1984 of 1. 24 bureaucrats for each aircraft.

The proof of over-regulation is the many concessions and exemptions given; every exemption is an admission that the regulations are inadequate; every concession represents an unnecessary overcharge because of the staff and resources needed to sidestep the regulation. This reinforces the sneaking suspicion that underneath the rhetoric and emotion of cost recovery, the government’s hidden agenda is simply to raise revenue. The unnecessary change in the administration of aviation suggests this is being achieved by ‘divide and rule’. As Tony Wilkinson of AOPA says “You cannot argue effectively with two authorities”.

The FAC was set up as a corporate entity under its own Act of Parliament. It has 1,176 staff and a $400m debt to the government plus their equity of $696m. There is considerable independence although the Minister is empowered to give directions to the Board and must compensate the FAC if such interference costs money. (Perhaps the FAC should sue the government for its five year ban on research into the third runway at KSA. ) The Minister also enjoys a sixty day veto when new charges are proposed. This obviously has never been exercised!

The decision to establish the CAA was “based on the need to . . . reduce costs to the industry”. The CM also has its own Act of Parliament but the 7,000 plus staff are still public servants. This is about as uncommercial as you get – and it shows. Even Dick Smith, now a CAA Board Member, believes that this makes it difficult to introduce change.

Its role is much more ambiguous than the FAC. It is struggling to decide what it is supposed to do with only its infamous past and international obligations to set the signposts. Regardless, the Act stipulates that the CAA must earn a reasonable rate of return on its assets (including a $150m Commonwealth. loan), maintain Commonwealth equity of $217. 8m as well as retain reserves for future infrastructure. ‘Reasonable’ turns out to be 20%, about six times the average international return on the operations of an airline!

The CAA Act also instructs that their charges “shall be reasonably related to the expenses incurred or to be incurred by the Authority in relation to the matters to which the charge relates and shall not be such as to amount to taxation”. The Minister may also veto CAA charges within sixty days.

Both authorities have inherited the overcapitalised airways and airport facilities left over from the squirrel mentality of an earlier era. The FAC Chairman even comments that the “Federal Government’s determination of the Corporation’s capital structure has heavily burdened us”. The FAC paid $21. 9m in interest to the Government in 1987/88; that equals $2,861 for each aircraft on the register. As Tony Wilkinson of AOPA logically points out, this interest is for assets already paid for by the taxpayers: “We’re paying twice for the same thing”, he said.

Under this previous system it was impossible to upgrade the value of appreciating assets such as land and the assets of the Department of Aviation were increasing by about 15% per annum over its last six years. Similarly, assets were traditionally logged at purchase cost which led to anomalies such as the $71,000 worth of mooring buoys on the books decades after flying boats went out of service.

Equally as silly, the book value of the replacement facilities at Darwin was entered as $Nil because it was paid by direct government grant after Cyclone Tracy! Further, generous staff superannuation benefits were paid directly by the Government. Although the old Department charged for services, there was no real attempt to justify the charges. It was token pricing and arbitrary services.

Bosch Report Begins Cost Recovery

So what is the present fuss all about? At its surface it is about money. Underneath it is about structural change and the best way to go about it. You see, the days of the highly regulated and developing industry saw covert subsidies and massive overcapitalisation. The industry accepts and understands that robbing Peter to pay Pauline couldn’t continue.

But the pendulum has swung too far the other way. Full cost recovery implies that there is absolutely no community benefit rom aviation. This fails any test of reason.

The fuss then focuses on the speed of the adjustment and the equity of today’s industry having to pay for yesterday’s mistakes. The authorities are forcing the pace in this ‘transition decade’ instead of allowing the industry to lead as the Bosch Report envisaged. Maybe the destination is the same but the industry believes it should be on top, not on tap. Both the FAC and CM have consequently taken up the philosophical guidelines laid down in the Bosch Report. Thus cost recovery is “the means of disciplining demand for, and provision of, aviation infrastructure and services”.

Note that there is no allowance for ability to pay. This is like going solo because the instructor bailed out. Basically, every expense is passed on to the industry except for safety regulation and search and rescue. These alone, according to Bosch, provide a community benefit though elements of the former are beginning to be charged for. To add insult to injury the CAA even wishes to introduce some degree of ‘self administration’ of safety by the industry. In other words it will cost the industry in kind rather than cash.

The Bosch Report did consider that there could be some community benefit from aviation but it put this in the too hard basket. Instead it concluded that this should be covered by overt government subsidies. On the other hand the Bosch Report rejected any claim for compensation by the industry for the costs of curfews. Heads – the community benefits; tails – the industry loses.

The overriding theme of Bosch cost recovery is that each aircraft using a particular facility pays the direct attributable cost for that location; the costs are apportioned by aircraft weight; any remaining joint and overhead costs of the system as a whole are then shared on a ‘flexible’ basis. For ‘flexible’ read “what the market can bear!” (Some of the crucial ideas of the Bosch Report are summarised in the box).

As we’re witnessing, the Bosch Report was great on theory but rotten in arithmetic. And, you must know, Henry Bosch, Deputy Chairperson of the Authority, put out the following pearl of public relations: “Individual operators . . . mistakenly perceive the advent of the CAA as causing cost increases, whereas in fact they are facing adjustment in charges . . . “!

This is the same CAA which has as one of its priorities “to rebuild and strengthen the co-operative relationship with the aviation industry”. Similarly, the FAC has “moved to eradicate the image of airport authorities as obstructive and regulatory institutions. ”

What Bosch Wanted

* A direct link between expenditure and cost recovery to provide the necessary discipline to improve efficiency.

* Capital costs would be handled by periodic revaluation of assets and a charge for the opportunity cost of the capital by reference to the real bond rate.

* Community benefits would be recognised by a subsidy. No allowance would be made to the industry for the cost of curfews.

* Investment policy was to write off obsolete or surplus inventory and no longer charge them to the industry. All airport investments were to be evaluated before the FAC took over to ensure that full cost recovery was possible.

* All airport and airways charge were to be separated into individual facilities

* Fuel and excise taxes were to be increased to ensure full cost recovery.

* Landside charges were to offset airside recovery.

* Cost recovery should be implemented by as wide a range of charges as possible.

* Charges would be calculated by aircraft weight rather than the class of carrier. System wide costs were to be paid by system wide users.

There is perhaps a fine line between Bosch (Report) and bunkum.

The current debate is so widespread and wide ranging that it is impossible for Australian Aviation to cover all the injustices and anomalies. Consequently this feature will look at some of the major topics and consider the problems of putting the Bosch Report into practice.

Tax(V)Ing Issues

All the old ways have changed with the new ‘commercial’ regime. Now the authorities regularly revalue their assets. In one stroke the industry is responsible for decades of inflation. This charge against the industry is not money that has been spent on the industry; it is the quoted replacement cost for old fac1ht1es the industry may not need any longer. Further, the industry is not given the opportunity to purchase facilities outright.

Associated with these revaluations is a charge for the ‘opportunity cost’ of capital. What this means is that the authorities have to equal the return they could get elsewhere. So if you would only stop flying, the CM and FAC would be free to play the stock market with all your money. That is like Basil Fawlty believing he could run a brilliant hotel if it wasn’t for the bloody customers.

All this is unbelievable enough to repeat: The authorities revalue their old assets then charge the industry for the interest they could get elsewhere on the inflated book values! Neat, eh?

Depreciation is now more realistic but because this is a debit in the authorities’ accounts, it increases the charges on the industry. For example, FAC depreciation went from less than one hundred dollars a year to $9. 8m the next. It is irrelevant whether the industry wants the asset or not; the family heirlooms cannot be thrown out. The crunch of superannuation is still to come. Witness what happened a few years ago to Australian Airlines because of its superannuation legacy. The Government eventually had to bail them out. Well, the same superannuation system is affecting the centre of gravity of the present authorities. For example, FAC contributions to superannuation amount to $4. 2m in a full year. Private industry cannot enjoy benefits equal to that of public servants yet aviation is expected to pay through cost recovery.

Still more: Because of ‘corporatisation’ the FAC now has to pay a whole range of Government charges which were previously exempt. These include sales tax, payroll tax, customs duty, fuel excise, vehicle registration, company tax, council rates and fringe benefits tax (refer p. 11, Mar 89 AA). Happily, the CAA Act exempts it from Commonwealth and State taxes except for Customs Duty and Commonwealth Sales Tax. However, these cost the CAA alone $21m last year.

Guess who has to pick up the tab?

Austra1ian Aviation has prepared the accompanying table which summarises the current CAA and FAG charges. These are the ‘bottom line’ which has led to the industry revolt.

Another trend in the CAA is equally clear. The Bureau of Transport & Communication Economics reveals that the real cost of both Avtur and Avgas have fallen by about 10-15% in the last five years after allowing for inflation. In other words revenue is dropping. This will not be allowed to happen because annual dividends to the government are more important than long-term viability of the industry. At least the Avgas excise is relatively easy to administer with little overhead. The same cannot be said however for the new FAG and CM charges.

The ‘Corporatisation’ of the aviation bureaucracy was necessary to allow ‘commercial’ management of the industry. Corporatisation has regrettably turned out to be the modern version of Pontius Pilate washing his hands of blame.

Bosch Rotates

There are many problems with the implementation of cost recovery. It is not a perfect system yet the authorities still try to pass it off as flawless.

For example, the Bosch Report wanted each individual facility to be separately self-funding so the FAG insists that each airport trades in the black. They don’t-yet- but overall the FAG manages to make an overall profit from the cash flow alone on KSA, Tullamarine and Coolangatta. The other irony is that cost recovery was an attempt to shift some of the burden of cost recovery from GA to the international sector. Tourists don’t vote after all. GA is indeed paying a smaller proportion but the overall bill is much larger so they are actually worse off.

Meanwhile, John South, Head of Air Operations for a multinational, points out that it costs more in airways charges for them to fly from Melbourne to Perth than does the rest of the flight to Europe!

This raises one of the more interesting anomalies of the Australian charging system. You can see the formula the CAA uses to calculate en route charges for Avtur aircraft in the table provided with this feature.

Well, the Europeans use the same formula except the last part of the equation for aircraft over 20,000kg (ie the square root of the aircraft weight in metric tonnes (W½)) is divided by 50 for overseas cost recovery.

Because the CAA left out the denominator it makes a substantial difference to say the least. Doug Bencham, a regular international pilot, wonders if the CAA can explain why they didn’t adopt the Eurocharge formula without changing it?

Another twist is that cost recovery must operate in a narrow margin where costs must be high enough to break even but not so high as to deter use of the infrastructure. The scales have tipped badly into injustice. There is no doubt that cost overrecovery is occurring when judged by the reluctance of operators to use CAA and FAC services. The worry now becomes that with potentially fewer operators paying the charges, the remaining outfits will have to pay even more. In the particular case of the peak period penalty charges at KSA, the FAC is creaming off windfall profits because there are no extra costs possible when movements are already at a maximum.

It also puts an artificial ceiling on airways efficiency. How does the industry know it is paying for the best and cheapest air traffic control when market forces are thwarted by artificial charges in another authority? Further, the $200 minimum charge is completely arbitrary. The figure was simply plucked out of the air as a nice round figure to see what happened. If it is any consolation to GA, they are not even the real target. Commuter airlines are the eventual victim and GA was simply the prematch trial for the big game yet to come. Rural New South Wales please note!

Although the FAC and CAA charges seem to be moving at Mach speeds, the authorities are actually treading most warily. They cannot afford to have any of their ‘charges’ construed as taxes because that will land them in the High Court. The Air Caledonie case regarding the ill conceived $5 immigration clearance fee has already set a precedent and some groups in the industry are already briefing their lawyers.

However, the ultimate insult of cost recovery is that there is no competition. The CAA at least claims it “is very aware of its privileged position of being a monopoly supplier. ”

The Bosch Report envisaged a ten year phasing in of cost recovery.

A Privileged Debate

Senator David MacGibbon made the following observations in the Parliament last December when moving a motion to set up the Senate inquiry into the CAA and FAC:

* He claimed the FAG was hampered for the “fundamental (reasons) that FAC is overcapitalised” as well as the “calibre of its executive officers”. He added that it is “composed of bureaucrats in the empire building role”.

* On cost recovery he pointed out that “aviation, and aviation alone, is the one singled out for the user pays doctrine and the 100% cost recovery doctrine”. He argued that the Government however is keeping $37 million of Departure Tax which should go to the industry. Further, the ‘tax’ on piston engined aircraft at Launceston, Essendon and Coolangatta was “totally unconstitutional, discriminatory taxation”. More generally, he continued that “nothing is more unfair or illogical than charging aircraft owners or operations on the basis of weight at the smaller end of the aircraft section”. Overall, he said, the new GAIT charges introduced by FAG were an “artificial contrivance” and FAG was guilty of a “gross abuse of regulatory. power”.

* Replying for the Government, Senator Evans said he would “undertake that there is a degree of sensitivity in the administration of these provisions in the future”. He agreed that the present problems with cost recovery are “potentially counter productive for FAC in terms of the commercial reputation it is seeking to establish. ”

Senator Evans was the Minister responsible for setting up the FAG and the CAA!

The CAA has achieved full cost recovery of its air traffic services within the first three years. En route, terminal navigation and fire fighting charges alone will raise $500m this financial year. More increases will come in regulatory service charges and the cost of publications where recovery will increase to $6m this year. This is still well short of full cost recovery even though the revenue base has increased 500% in four years.

It is obvious that the CAA would prefer to price itself right out of some activities rather than tailor its services to the market. Thus it has put them on a ‘quote basis’ to protect the faint hearted.

The CAA sees ‘modernisation’ as the saviour of the situation.

Thus $450m is committed over the next three years. They optimistically argue that costs will come down 10% in the long run. For example, in 1987/88 the Department of Transport and Communications spent $280,000 investigating integration of Flight Service and air traffic control. These studies have been going on for years because the CM seems incapable of making a simple management decision. Consequently the industry is still being charged for old neglected equipment which is not up to the task (such as Sydney radar)aswell as new investment.

This means that the CM is charging both maintenance costs and replacement costs. That is blatant double dipping. The irony is that no new facility or service will be introduced unless someone agrees to foot the bill. Pity they weren’t so courteous with the existing facilities and services.

The FAG has two sides to its fund raising: airside and landside.

The FAG has a good little business going at some of its airports which happily offsets the charges levied on airside. Fully 60% of FAG income derives from non-aviation activities though there is to be no cross-subsidisation between airports. Yet the same charges apply across the nation regardless of the local situation.

For example, Mrs Baxter of Amity Aviation at Jandakot is concerned over charges for aircraft being repaired. “Lots of country people depend on Jandakot”, she said, “and aircraft are often grounded for prolonged periods while waiting for parts. This maintenance problem is more evident here than in the eastern states because here there is no service facility available elsewhere. ” This was echoed by Andrew Robertson of Aerial Enterprises in Derby. “GAIT charges scare me because I only go to Perth for maintenance. They seem like a novel way of extracting more money”. And John South wonders what precisely is the FAC definition of the ‘maintenance’ which attracts a lower GAIT charge.

So the FAG is defying its own edict that each airport must independently break even. Not that you’d notice in places like Sydney; the duty free shops and parking stations may as well go rent free for all the good it does the industry. The reality is that the industry is being forced to change – or perish. And as far as the authorities are concerned, those that go broke at least stop complaining.

In raising the general aviation fees on 1 April, Mr Barry Thompson, the General Manager for GA at the FAG, pointed out that “the revenue raised from the revised and new charges will only cover about 23% of the present annual airside loss”.

Coupled with this is the expansion of the FAG. The reason for the Senate debate (which set up the current Inquiry) was to include Alice Springs, Mackay and Mount Isa within the FAG net and put the management of the joint facilities at Canberra, Darwin and Townsville under the FAG. These airports were previously partly funded by the Avgas surcharge. That money now reverts to the CAA (perchance to dream of a drop in the rate?).

En Route Checks

In 1987/88 $382. 5m was recovered from direct aviation activity which represents $50,000 per aircraft on the Australian register. The CAA Avcharges system processed 756,000 flights for 1,400 operators. This resulted in 275 statutory liens on aircraft for non payment. Meanwhile, back at the airport, the FAG had to provide $569,674 for doubtful debts in the first three months of 1988.

In fairness, the CAA can show that its charges were reduced by 3% last financial year and it appears committed to a further 3% reduction this fiscal year. For example, the annual renewal of an Airways Operations Certificate is no more-after just one more payment. One must be grateful when a mugger offers the bus fare home.

They are completely reviewing their services with the aim of reducing costs, eliminating non-essential activities and devolving more responsibility to industry. Yet the shock to the industry has been so great that operators have had to look rationally at the situation and make strategic moves for survival. At least both the FAC and CAA are being tested as much as the industry. They are also prisoners of supply and demand even though the ultimate sanction of bankruptcy is not possible. The CAA notes that it “does not accept . . . achievement of profits as providing adequate financial discipline”. If they offer poor value for money the industry will shop elsewhere. Oversupply of services will be reflected by bankrupt operators. The present refusal to pay the new charges by many operators is halfway between the two. . . Talking about unfair advantage, the CAA wins the dubious ethics award for competing against seven private charter operators for a Government contract. In May it won the ‘Prevention of Blindness’ tender from the Australian International Development Assistance Bureau to ferry a medical team to the Gilbert Islands. It is astonishingly callous, or naive, that the CAA interprets its commercial charter as an opportunity to compete against its customers while simultaneously adding adversely to their cost structure. The logical extension is for the CAA to buy more aircraft and win all the contracts. Better still, why not bringin the Air Force. Maybe then the Trades Practices Commission could raise an eyebrow.

If there are going to be new rules of business then maybe it is time for private outfits to try and compete for customers against the authorities. Perhaps we should see Westfield running the terminals. Workers’ cooperatives may be better at offering brief- ing and meteorological information than the present batch of public servants.

One solution is for industry groups to assume responsibility for CAA regulatory functions relating to their own sector. The last thing the industry wants is to become a tax collector but it may be the lesser of two evils. Why wait for scraps to be brushed off the CAA table? Take control, get agreement from all operators and watch the CAA defer.

Note that the CAA contributes increasing amounts to aviation organisations for such services; their subsidies have tripled in the last four years. However, Dick Smith cautions that you have to make sure you fill out the correct form and send it to the appropriate committee. He is serious.

The industry must also fight for the Departure Tax revenue to be recredited to the industry. With official customs data confirming that some 4,005,341 departed Australia during 1988 (+14% on ’87) that figure could have generated up to $80m for aviation in that year alone. Revenue from this source has now been halved and is now returned to consolidated revenue. If landside charges are onerous, then get everything off site except aircraft parking. Offer service from non-FAC airports. Barry Hemphill of Hemphill Flying School notes that “Aircraft are moving off Archerfield at the rate of two a week. Koralbyn and Caboolture are really going ahead as satellite airports”, he said. Do deals with local Councils; they love business to come to town. And look what the NSW government was prepared to do to attract the new pilot academy to Tamworth.

Given that some charges are inevitable, underutilised aircraft are a liability. You have the choice of increasing prices or increasing volume. Fixed costs are proportionally reduced as hours are increased. These are marketing strategy decisions for any business and cost recovery is making the choice imperative.

After all, the FAC and CAA ‘system’ is really for the fare paying passenger – not the operators – so the more customers the better; the costs are passed on and the user pays rather than the victim. However, Barry Hemphill reveals that sometimes it is not that simple. He has some vintage aircraft parked in rented FAC hangars which must pay GAIT charges as well. As John South asks, “What justification does the FAC have for charging twice for the same bit of concrete?”

Barry Hemphill continued, ”This is a scam put on by the government to fatten their purse. These aircraft only fly at airshows; if they’re on the register you have to pay the same even though they’re only limited use aircraft, otherwise there is a paper war to get them back on the register. Either the FAC gets you or the CAA will. The government is beating aviation completely out of existence. ”

And what happens with research and development? The Authorities’ boys love playing with toys. Is it fair to load speculative outlays on the industry? Surely there is some community benefit here.

The industry must question every assumption of the present system. For example, the level of air traffic control is ‘excess to requirement’ as AOPA puts it. The present supply side economics is costing the industry dearly so new procedures such as ‘see and be seen’ in controlled airspace must be demanded by the paying customers.

The industry must continue to force a reduction of facilities. Business can profit without them. The charges which remain have to be fully justified to the user. For instance, the CAA says airways charges are impossible to allocate to individual users; some win, some lose. Is that the best the CAA can offer?

As Tony Wilkinson points out, “How can they justify Avgas charges if they cannot break down the costs of en route facilities? It all amounts to the user pays principle being too simplistic. ”

There is an alternative system in maritime cost recovery. Their lighthouse dues and navigation aid charges are recovered from the “commercial shipping industry and trading vessels. ” Vessels of less than twenty-four metres in tonnage length are exempt.

There are 3,224 aircraft in the RPT, Charter and Airwork fleets; they are the ‘trading vessels’ of the airline industry and the precedent is already established by the same Minister. Why should private yachts go free when private aircraft are stung?

Can the industry handle the truth? You bet it can because it cannot be worse than the present situation.

For example, it cost $75,000 for a consultant to report on ‘organisational options’ for the CAA. As a result the CAA has increased executive salaries to “attract the right people”. Instead, some incumbent public servants just got a huge pay rise at your expense. These are the executives of an organisation which Tony Wilkinson believes “has no charter to promote aviation, only police it. ” Barry Hemphill is more direct, ”The CAA is turning into a Gestapo organisation”, he said.

The industry must increase its use of appeals against bureaucratic decisions by going to the Administrative Appeals Tribunal, the Federal Ombudsman and the courts where necessary. Everybody can think of some area where they would like to

find out details and the Freedom of Information Act is the way to

go about it. (See box) Aviation cost recovery threatens the survival of the industry. I cannot be fought piecemeal. The existing industry groups have been leading a strong counterattack but they are structured for issues that apply right across the system. However, cost recovery is based on location. Industry groups have to reform to win the battle. Therefore there must be more cross-sector groups such as the ones that have led the insurrection at Bankstown and Archerfield.

Debriefing

Above all the current Senate Inquiry must be lobbied individually and collectively. It is extraordinary that two govemment bodies less than a year old are being investigated by the Parliament.

Only YOU can make sure the Parliament has enough information to do its job. As Senator MacGibbon points out the Inquiry is the “appropriate and proper platform for the aviation industry to make their comments. ” The Inquiry has to acknowledge that if the user is the only beneficiary of aviation, airports would be built in the middle of nowhere. The Inquiry must also insist that total costs have to be considered. If the CAA and FAC are incapable of comprehending what the other hand is doing then there should be a common authority for both organisations.

Meanwhile, aviation’s newest Minister for Aviation Support, Ros Kelly, has inherited the mess presided over by a constantly changing succession of previous Ministers. She headed the Parliamentary Inquiry a few years ago into Dick Smith’s book, Two Years in the Aviation Hall of Doom. The public hearings and her final report, No Port in a Storm, will leave her in no doubt that only the names of the organisations have changed but not the faces or the attitude.

The fight has become political whether the industry was ready or not. It is a waste of time dealing with Authorities which resort to the Nuremberg defence of “just doing my job. ”

Why the Uprising?

Years of inertia by the old Department created a sense of hope when the CAA and FAC took over. Here was a chance for improvement and a new responsiveness to the industry.

The FAC seemed dynamic but their favouritism of the trunk and international operators soon showed through.

The CAA remained locked into a siege mentality where staff refused to take any responsibility. Instead of taking corrective action, they stepped up public relations; paper chaff replaced the requirement of the CAA Act for them to consult with relevant bodies and organisations. As our colleagues at Australian Flying commented: “Consultation is only a word. ”

Decisions of both bodies raised doubts about their expertise while industry input was treated as a challenge to their power. Disillusion and frustration led to a loss of trust. The industry started pointing to incompetence, lack of professionalism and courtesy as well as evidence of hypocrisy and even trickery.

There is now a ‘crisis of confidence’ in the FAC and CAA; the industry is bitter.

The biggest problem is the breakdown of coordination between the two bodies. This came out in the present

insurrection over charges where the total cost to the industry has never been considered. This is the fault of the Minister and only the Minister can remedy the situation.

The fact that the industry is diverted from taking care of business shows the degree of dysfunction these regulatory

agencies have brought to aviation.

Operators are personally and financially committed to aviation. Many personnel are in the same position. They are unable to back out. Nor are they willing to go out backwards. To fight is not their first choice, but it may be their last option. They have nothing left to lose.

Happily, as with the decision on the parallel runway at KSA, some politicians are capable of looking beyond the next election. What this Minister must clearly be shown is that aviation has no future under the restructure currently being imposed by stealth.

Nor can the industry continue to waste its energy fighting the authorities instead of taking care of business.

Australia must have a vibrant and viable industry as we embark upon the deregulation of the trunk networks and as we adapt to a service based economy. The imminent Garnaut Report for the Federal Government acknowledges that Australia “will require a vast expansion of our civil aviation Infrastructure” if Australia is going to survive economically in the next century. But quick bucks now appear more important than long-term welfare. Perhaps we should take the word ‘Commonwealth’ out of our Constitution because it is false advertising.

Aviation took decades and dollars to build to its present level. Australia cannot waste this resource at this critical stage of our development just to balance the books in the short term.

The nation simply could not afford to replace the industry it has struggled for half a century to establish.

Over to You

In this feature Australian Aviation has captured the essentials of the most important issue affecting the destiny of the aviation industry in Australia.

Your wish should be the command of aviation administration. Is it? Here is who you can contact if you want a say in your future.

Applications for information under the Freedom of Information Act should be sent directly to the authority responsible: Federal Airports Corporation. PO Box 150, Rosebery 2018. Tel (02) 697 7474, Fax (02) 663 1387. Civil Aviation Authority, PO Box 367, Canberra City 2601. Tel (062) 68 4111, Fax (062) 48 5239.

Other useful administrative devices: Commonwealth Ombudsman, GPO Box 442, Canberra 2601, Tel (062) 49 7821, Fax (062) 47 5833. Administrative Appeals Tribunal, GPO Box 9955, Brisbane 7001, Tel (07) 2265541, Fax (07) 221 2611. Trade Practices Commission, PO Box 19, Belconnen 2616, Tel (062) 64 1166, Fax (062) 64 2803.

For information or late submissions to the Inquiry into the Organisation and Operations of the FAC and CAA: The Secretary, Senate Standing Committee on Transport, Communications & Infrastructure, Parliament House, Canberra 2600, Tel (062) 773545, Fax (062) 773899. Relevant Members of Parliament: The Prime Minister, The Hon Robert-Hawke MP, Parliament House, Canberra 2600, Tel (062) 777111, Fax (062) 734100. Minister for Transport & Communications, The Hon Ralph Willis MP. Parliament House, Canberra 2600, Tel (062) 77 7200, Fax (062) 734106. Minister for Aviation Support, The Hon Ros Kelly MP, Parliament House, Canberra 2600, Tel (062) 77 7840, Fax (062) 73 4156. Opposition Spokesperson for Aviation, The Hon David Jull MP, Parliament House, Canberra 2600, Tel (062) 77 4631, Fax (062) 77 2057.

Industry Representative Bodies: General Aviation Association, Bldg 606, Airport Avenue, Bankstown Airport 2200, Tel (02) 709 2385, Fax (02) 707 2044. Australian Owners and Pilots’ Association, PO Box 1065, Fyshwick 2609, Tel (062) 80 4221, Fax (062) 80 7341. Australian Business Aircraft Association, Bldg 190, Essendon Airport 3041, Tel (03) 379 1477, Fax (03) 379 4457. Helicopter Association of Australia, PO Box 757, Artarmon 2064, Tel (02) 906 2464.