Stop Press

Meanwhile, the new airline, which at presstime was still unnamed, will follow largely upon the operational format already established by Capitol (refer p. 14 July 89 AA) in that it too will look towards serving both the leisure and business markets. The new entrant will also use MD-83 series aircraft which are not only faster (Mach. 76 against. 73) but also have lower Direct Operating Costs (DOC) than the rival Boeing 737-300s.

One novel area the new airline will be venturing into is in the potential employment of older pilots. This would naturally not only buoy up a new carrier’s public approval rating through hiring a core of highly experienced pilots rather than the ever younger brigades that airline’s worldwide are now faced with but would ensure sufficient aircrew are available to meet the new airline’s needs. The basis of their thinking is simply that any airline captain, say age 55 or so could cash up his super and gain a windfall from investing this at today’s high rates whilst still earning a premium salary for a number of years with the new entrant.

A spokesman for the new airline also was surprised that a legal challenge had to date not been made regarding the compulsory retirement of airline captains at age 60. In the US this is now 70 years though pilots over 60 fly as First Officers rather than captains, something that many are quite happy to do rather than hang up their wings and retire prematurely. A challenge locally could open up a whole new range of aircrew that will certainly be needed in the years ahead.

The new airline also is not fussed whether or not it is operational come November 1 next year, the official start up date of domestic airline deregulation. In view of the overall economic situation a senior spokesman stated that it could be more prudent to let the economy settle down and thus also allow the new airline more time to become fully operational in a professional manner.

A major problem that all the new carriers shares is the provision of airport terminal facilities. Both Australian and Ansett are obliged to offer 2 gates each, yet this won’t be allocated by the FAC till next March at the earliest. The new entrants in turn can build their own terminals, a costly venture to say the least and one that is also constrained by the physical limitations of Sydney and Melbourne airports, while the FAC won’t naturally build (from its own funding) a common user terminal till it sees more evidence of a solid financial base from each of the new entrants. And that will only be when they are fully launched on the stock exchange with firm orders for specific aircraft, a prepared route structure and the necessary CAA airline operators certificate, something that is still four to six months away at best for any of the new carriers.

Government Policies Eliminate Two More Airline Chief Executives:

The untimely demise of both James Strong from Australian Airlines and John Menadue from Qantas has highlighted the problems of running a Government controlled enterprise on supposedly commercial lines whilst not allowing the company itself the right of operation as a true private enterprise corporation.

Both CEO’s resigned their positions ultimately as a result of having to have their positions spilled so as to be able to be technic ally re-employed at a more appropriate salary. Both Strong and Menadue also differed in matters of policy with their Government appointed board and in particular their relevant chairmen. Both the new positions are being advertised at a package in the $250,000 range, nearly double what Menadue and Strong were receiving.

Most people within both airlines, indeed the industry as a whole, were saddened by the departure of two of this decade’s most viable airline management personalities. James Strong took an ailing TAA in 1986 and shaped it into an entirely new airline. A new imagine in fact that last year enabled the once lame duck carrier to easily beat its arch-rival Ansett in the premium business market. For his part, John Menadue piloted Qantas out of the dark days of recession and into the three most profitable years of its history. The current problems surrounding a lack of skilled manpower were largely as a result of direct actions by his predecessors in the early eighties and he worked tirelessly to solve today’s problems of coping with an unprecedented growth rate with insufficient short term personnel and airframe resources.

 Airworthiness Surveyors Push for Legislation Change to Ensure Overseas Repair Stations Meet Australian Standards:

A major loophole has been exposed within the CAA’s existing Civil Aviation Orders where overseas repair stations don’t require surveillance or certification by Australian CAA surveyors and engineers.

The situation has only really come to a head these past two years as Qantas has been forced to have a growing proportion of its maintenance performed overseas. To date Qantas has used the services of Air New Zealand, British Airways, Aer Lingus, JAL, Lufthansa, Singapore Airlines and United Airlines. Whilst these are highly reputable carriers airworthiness surveyors point out that newly employed Qantas LAME’s recruited from Aer Lingus, for example, didn’t meet the CAA’s standards and would have to be trained to a higher level in order to do so. This is something that naturally is being performed routinely by Qantas but highlights the situation where in the UK that carrier is performing an increasing line maintenance task on transiting Qantas aircraft.

The surveyors primary gripe is that overseas nations require the certification to local standards of any workshop performing work on aircraft of their native registration whilst in its present form the Australian CAO’s don’t cover this. As an example, the US FAA requires overseas maintenance facilities, such as Qantas and ASTA, to have FAA approved repair station status while recently the New Zealand Airways Corporation gave approval for Hawker Pacific to effect repairs on certain NZ registered aircraft.

With deregulation coming and three major new airlines on the horizon there was the fear that one or more could move their heavy maintenance offshore thereby bypassing the ability of the CAA to be able to ensure that maintenance was being performed to Australian standards.

The other critical problem in the airworthiness area is the lack of skilled manpower. At August they were effectively down to only 136 surveyors from a high of 183 in 1986. Defection to significantly higher paying jobs in industry and expected retirements would also see up to an additional 60 depart by the end of next year while recruitment was virtually static due to the limitation of employment within the CAA owing to the Government’s wages policy.

The present review being conducted into the award restructuring format within the Airworthi- ness Division by ČAA consultant Peter New- man, was hoped to provide solutions to many of the present problems affecting terms of employment within the beleaguered branch. Additionally, the wide ranging review of overall certification standards by Ron Yates and Mike Terrell was also seen as a catalyst to changing many of the outdated, inefficient and unnecessarily laborious methods presently used in monitoring and managing the aircraft on the Australian register.

Qantas Taiwan Offshoot Nearing Launch:

At presstime, Qantas was near to officially launching its new carrier to specifically serve the Australia/Taiwan market.

Australia Asia Airlines is planned to launch services linking Australia with Taipei for the first time in the early new year initially offering a once or twice weekly 767 service. Taiwan has in the past year been active in promoting its residents to travel abroad (something that they were largely not allowed to do) in order to be able to decrease its inflow of foreign exchange, which is exactly the opposite of Australia’s foreign exchange problems. Qantas itself has not been able to previously serve Taiwan as that country is considered by the PRC as merely a province of China itself. As Qantas serves China then a diplomatic route had to be taken so as to not offend either the PRC or Taiwan. In fact, one senior Qantas official termed the negotiations and the overall diplomatic situation as the most sensitive out- side the Middle East. Japan Air Lines some years ago set a precedent for this type of operation with the formation of Japan Asia Airlines. Australia Asia Airlines will effectively do likewise. Recently retired Qantas director of flight operations, Capt Alan Terrell will head the new airline.

Meanwhile negotiation of a joint service linking Australia and the South Korean capital of Seoul continues. At presstime the major stumbling block revolved around Korean Air’s access to Sydney airport. Aviation authorities want to dissuade new airlines from making Sydney their primary port of call while Korea apparently will settle for nothing less. Negotiations continue.

Raspp Contracts Decided:

CAA has chosen Thomson-CSF to supply the radar sensors in the $140m Radar Sensor Procurement Programme (RASPP). Contracts were signed on August 9 between Thomson-CSF and the CAA for the initial $28. 9m contract which will be supported by a $10. 2m contract from Leighton Contractors for the construction of the RASPP towers that will by 1992 provide a total secondary surveillance radar coverage along the entire Eastern seaboard and within several hundred kilometers of Perth.

Ultimately RASPP will provide 19 secondary surveillance radars and 8 primary radars in addition to terminal radar capabilities at Cairns and Coolangatta. A complimentary project is the Radar Display Replacement Project (RADREP) which will replace existing outdated radar displays in Sydney, Canberra and Bris- bane.

Dotc Report Recommends Peak Period Premiums at Ksa:

As an inevitable result of two decades of procrastination by numerous governments the aviation industry is now being asked to approve a plan that will see the auctioning of slots at Sydney’s KSA airport and a blanket surcharge made against all aircraft using the airport at peak times. The recommendation is made in a report by the Dept of Transport & Communications into alleviating traffic problems at KSA.

Peak times are currently 0645-0945 and 1545-1845 with General Aviation aircraft already having to pay a $200 surcharge to operate between these hours. Whilst the surcharge did reduce the use of KSA by GA aircraft, more than half of the GA movements at KSA are by aircraft physically unable to use Sydney’s alternative GA airfields. While a $200 surcharge to the major airlines would prove only a minor fiscal irritant it would spell financial disaster to the many third level operators who depend on access to KSA for their NSW rural feeder services. Having to buy a departure slot, plus pay an additional $200 surcharge on a 9 seat Chieftain or an 18 seat Twin Otter or Bandeirante would drive such operators from KSA, thereby destroying much of the NSW rural air service network.

The report also recommended additional high speed taxiway exits, reduced separation standards and again verified that if greater use was made of the existing east-west runway then most of KSA’s capacity problems would be solved. A major feature on the KSA situation outlining these specific problems and their solutions can be found on p. 21 of this issue. The report, which was tabled in early August, now awaits an industry response for a one month period prior to going to the Minister, Ralph Willis for official comment.

 Additional Capacity to Hong Kong:

To cover the summer peak period the Australian Government has allowed Cathay Pacific to operate an additional 67 747 frequencies into Australia from Hong Kong from the September through till March 1990 period. It is believed Qantas will schedule a similar number as traffic demands.

The additional frequencies will in the short term alleviate the peak season capacity deficiency in the absence of a long term bilateral traffic agreement between Qantas and Cathay Pacific for the carriage of Australian passengers to Europe via HK. Cathay will also from next July make Los Angeles its primary US port of entry with the introduction of non stop (6,583nm) services linking the Crown Colony with LA. This will mean the dropping of San Francisco by CX aircraft in favour of an oncarriage alliance between CX and American Airlines who will now fly San Francisco bound passengers from LA using a CX flight number. Qantas presently operates a similar arrangement with American to New York and other key ports in the US AA system.

 Defence Spending Treads Water in Steady as She Goes Budget:

As expected, the 1989/90 Budget handed down on the night of August 15 held little new joy for the ADF.

Spending for 1989/90 will be $8. 3bn, up 6. 5% on last year’s $7. 6bn. This continues the policy of the last two years of maintaining defence spending in constant dollar terms though the latest budget sees Defence getting only 2. 3% of GDP against 2. 4% last year. This is the lowest share of GDP since the early fifties and reflects a considerable decrease in defence spending as typically most previous years saw Defence gaining between 2. 6% and 2. 9% of GDP. It again also erodes the long lost ambitions of both the 1986 Dibb Report and the then much heralded White Paper of 1987 that were based on real growth of 3% and 1% respectively.

Major capital programmes to receive funding were the RAN submarine, Anzac and FFG frigate programmes, Black Hawk and Seahawk helos, PC-9 and the F-18 programme. Nearly 90% of this years funding will be spent in Australia while 27% will go towards new equipment programmes. The DoD will earn some $54m on the sale of defence land whilst $103m is being allocated for defence force housing. A complete Budget analysis will be provided in next issue’s Defence Update section.

A321 Is Definitely a Goer:

With firm orders for more than 80 aircraft, Airbus Industrie has officially launched the A321 project.

The latest order comes from Lufthansa for 20 firm and 20 optioned and concludes a strong selling period that also saw Iberia, Alitalia, Gut Air, ILFC and Egyptair order the new generation 180-200 seat twinjet.

First flight of the stretched A320 is planned for early 1993 with certification being gained by the end of that year for an entry to service by early 1994. Addition of the stretched fuselage A321 to the basic A320 family is expected b conservatively take firm sales of the duo to beyond the 2,000 mark by the end of the century.

 Record Year for Air New Zealand:

Air New Zealand has reported a consolidated net profit for the year ending March 31, 1989 of NZ$72. 3m, an increase of just over 3% on the previous year’s figure. Traffic was up with 4,605,685 passengers being carried for an increase in RPK of 8. 4% to 10. 56bn. A full report will be carried in next Issue’s NZ News section.

 Us GA Production Increases:

Figures released by the General Aviation Manufacturers Assn (GAMA) reveal that US light aircraft production is at last beginning to make a comeback.

For the first half of 1989 there were 665 aircraft shipped for a total value of $US714m. While this figure represents an increase of 15% on the same period last year it also highlights an 8% decline in billings owing to a decline in the number of high value jet and turboprop aircraft shipped in the first half of this year.

Shipments of piston singles increased from 354 to 453, piston twins from 36 to 37 though turboprops fell from 120 to 113 and jets from 69 to 62. Whilst second quarter figures revealed a further overall strengthening of the piston class a further drop had been experienced in the jet and turboprop area. However, exports overall were still strong in numerical terms with some 278 aircraft shipped representing an increase of 32% on the 1988 figure.

Meanwhile, star of the US GA scene without doubt continues to be Piper which delivered almost as many aircraft in the first half of this year as it did for all of 1988. Piper delivered some 279 aircraft in the first 6 months of 1989 and is planning on shipping 650 by year end. Top sel ler is the Cadet/Warrior single which is now being produced at the rate of 30 a month. Piper was also due to launch a revised version of its hot selling Malibu Mirage single at the October NBAA exposition at Atlanta.

Piper is also continuing to take a tough stand against product liability suits and is fighting each one individually in the court. It is a specific policy of the company that there be no out of court settlements, a policy that has helped turned the tables for a once ailing Piper.