Action agenda

The SILG was chaired by former Origin Energy director Dr Roland Williams, and also involved representatives from the Royal Federation of Aero Clubs of Australia, Recreational Aviation Australia, commercial GA businesses, the Aircraft Owners and Pilots Association, and Archerfield Airport.

“We had an issues paper first and we addressed what we believed were the main issues in GA. Then the industry leaders group met, we tried to thrash out the various issues and then what was the best way forward,” said John Gardon, the New South Wales president of the Recreational Aviation Association, and a member of the SILG panel.

The terms of reference for the group focused on examining key trends in the different sectors of the GA industry, identifying growth opportunities and impediments to this growth and possible strategies to maximise the growth of the industry.

Following extensive consultation during 2007, the SILG handed down its report to Transport Minister Anthony Albanese in April, but it was only released to the public in August, as part of the lead up to the government’s aviation White Paper, the draft of which will be released later this year.

In summarising the state of the GA industry, the group noted that that despite its long legacy in Australia, GA was finding it difficult to adjust to the new realities of a business driven world.

“The Australian GA industry is in a state of transition,” the report’s executive summary said. “Some sectors are growing strongly while others are in decline with some individual businesses struggling to remain viable. ” The report highlights that while major changes to the greater aviation industry – such as deregulation, competition etc – have brought about more benefits, there has been little change in GA.

“Many of the challenges generated by the general aviation industry relate to its passage from a protected commercial environment of previous decades. The industry needs to move forward to realise its future in a modern, global economy,” said the report.

Figures from the Bureau of Infrastructure, Transport and Regional Economics back up this claim, showing that in terms of flight hours, the industry has remained largely static.

Indeed, since 1999 the trend has been downwards, particularly with private flying suffering the most.

The high costs involved in private flying in GA have put a number of people off.

Ross Carrington, who was an initial SILG member and is the managing director of Moorabbin based General Flying Services, said that the costs of training and meeting all the security and other regulatory environments made it unattractive.

“I think that the recreational flyer looks at the expenses and votes with their feet and walks away,” he said.

But as people have walked away from private flying in Cessnas and Pipers, they have walked into the thriving recreational category of aviation, which has been growing at between 13-15 per cent per annum over the last few years.

Gardon notes that as recreational aviation is self-administered, lowered costs involved have been a major benefitfor it. “I think we’ve benefited from that by being a self administrative body and not having to be regulated to the same extent as GA. ” The other major growth area has been in flying training, where the booming Asian airline industry has created major demand for Australia’s highly recognised training sector.

“It gives the impression of a lot happening, but once this pilot shortage rights itself I believe we’ll be back to the same position again,” said Gardon.

“I think we need to look at something longer term in the Australian context to fix the ills of GA. ” As a result, the report and its recommendations focused on four key areas which may help to fix the problems, notably skills and training, regulation, ageing aircraft and airport access.

Skills and Training

With flying training as one of the few major growth opportunities within the GA industry, the SILG report gave major attention to how to foster growth within the sector.

However, not all flying training organisations have been fortunate enough to benefit from the rise in pilot training, as the airlines tend to deal only with the bigger flying schools.

Many of these schools have also set themselves up as Registered Training Organisations (RTO), which have the ability to offer nationally recognised Certificate, Diploma and Bachelor qualifications. According to Carrington, who manages GFS as an RTO, the ability to offer the qualifications really puts it above other flying schools.

“It’s providing a proper standard of education in pilot training and that attracts better quality applicants in the first place,” he said.

The SILG report identified that those flying schools which were RTOs attracted much more interest than those which were not able to offer the same qualifications, and also gave credence to the notion of flying as a professional career path.

And while the prospects in training are certainly positive, maintaining pilot, engineering and business management skills has been a major challenge for the GA industry, particularly as the airlines have sucked out the most talented workers from GA.

Maintaining experienced flying instructors has also been a key challenge for most operators, particularly as the major airlines have hired a number of instructors to fill their need for experienced pilots, according to Gardon.

But as the report points out and GFS’s Ross Carrington explained, his operation is not finding it as difficult as other smaller operators, particularly those in regional areas.

“We’re not having a lot of trouble in that area, although I would say senior instructors are a little more difficult to find,” said Carrington.

“I think the little schools who probably don’t train their instructors and don’t pay them very well would have difficulty attracting instructors. ” This has been one of the factors which have seen many pilots move out of instructing and other roles within GA and up to the airlines. But simply raising instructor remuneration is simply not an option for many smaller flying training businesses, and so the upward exodus from the industry may continue.

The report also identified a lack of business training and skills throughout the GA industry as a major problem, particularly for the smaller operators.

“A lot of the mum and pop type operations are there like a bed and breakfast,” said Carrington. “They love being part of the industry, they love flying but they’re not really very good businesses. ” To address the situation, the SILG report recommends that the government increase tertiary training places for pilots, engineers and aviation managers to ensure that the industry is able to grow sustainably. It also recommends that GA businesses themselves can play a bigger role in increasing wages, doingmore marketing and using more creative attraction and retention strategies.

Regulation

From the feedback the SILG received, it became clear in the report that GA faces a state of over-regulation which has pushed up costs and forced GA operators to compete with the airlines for people with the right skills.

Carrington said that this was one of the main concerns for the industry.

“One of the problems for the aero club movement is training is not doing well.

The main reason for that is they’ve been faced with overburden in a regulatory sense,” he said.

There was also wide criticism of CASA’s commitment to the general aviation industry.

“Several businesses stated that CASA direct fee costs were not their largest concern, rather they were concerned that CASA’s responsiveness and quality of service did not negatively impact on their business through delays or inconsistent regulatory decisions,” the report said.

Security has also been a major issue, particularly for operators based at airports where RPT operations take place.

Carrington noted that the requirement for an Aviation Security Identification Card and other security requirements have added significant upfront costs to the industry.

“It’s making it uncompetitive for people to learn to fly in that aero club/recreational industry,” he said.

Overall, the industry appears to be leaning towards adopting a more relaxed regulatory stance where issues of safety would be managed on a specific risk management basis, rather than a universal set of rules.

“I believe the best thing for GA is for CASA to do a review and obviously if they’re concentrating on paying passengers, allow GA more relaxed [regulation].

It has to be safe but a lot of the legislation and a lot of the regulations are driving them to the wall,” said Gardon.

With regulation causing so many headaches for operators and taking up CASA resources, some have suggested that a solution may be for GA to become self administering. But Gardon said that this may be more difficult for GA than it has been for recreational aviation due to the breadth of the industry.

“If they’re talking about Farmer Bloggs who lives west of the great divide and all he wants to do is use his GA aircraft to go into town once a month and wants to do all his maintenance, there is a role then for private [administration of] GA in that respect,” said Gardon.

“However, if you’ve got people like the Royal Federation of Aero Clubs who don’t want to give up their right to use the GA facilities for training commercial pilots and they see it as their life blood, I don’t think private GA could work on the same model as we currently use in recreational aviation,” he added.

Part of the current problem is who would oversee the GA industry if a workable solution could be found. Given the broad nature of GA, and as a result the different objectives, reaching consensus on a common standard of administration and also making it self funding would be difficult, if not impossible.

Nevertheless, the SILG recommended that CASA and the industry continue to examine how self administration could be applied, “But that this process proceed with caution and be limited to flying activity excluding passenger transport operations. ”

Ageing Fleet

One of the biggest challenges to the industry which has long been recognised is the age of the GA fleet, which currently sits at an average of 30 years.

“If no steps are taken to change the situation, the average age and the number of aircraft aged over 40 years…are likely to continue their upward trend,” the report said. “This will mean that, by 2015, the average age of the single-engine fleet will be 37 years and the average age of the multi-engine fleet will be 40 years. ” Carrington notes that one of the reasons for this is that many aircraft were purchased in the late 70s and early 80s, when different conditions stimulated the aircraft market. “At that point in time, the government, to stimulate investment, provided a 40 per cent investment allowance to buy aeroplanes,” he said.

But, as the report highlights, a number of those old aircraft are still flying today, including many within the aero club and smaller flying training fleets.

According to industry sources, the high age of aircraft has put some potential private pilots off GA, in favour of cheaper and newer aircraft which are available in the recreational sector. The difficulty is that many marginal aero clubs and flying schools feel that they are not able to fund new aircraft acquisitions. Even so, there has been some suggestion that part of the issue may be with the attitudes of some operators, rather than the economics.

“A number of people openly suggest that an old plane is just as good as a new plane. There’s major difference between a 30 year old Cessna 172 and a 2000 model 172,” said Carrington.

“They don’t realise how damaging those comments are, and that’s the problem,” he added.

In some cases though, these aero clubs are re-equipping with light sport aircraft, including some which are on the VH- register. “I don’t believe those purchases are being made by choice, they’ve been made on a cost benefit analysis,” said Carrington.

For all its efforts though, it appears that the prime solution to encourage an uptake of newer aircraft will not happen. “The one thing the Industry Leaders Group really came up with was the fact that what we needed was an investment allowance and increased depreciation…We were told by Treasury that was off the agenda. In other words no point asking because we’re not going to give it to you,” said Gardon.

As a result, the SILG recommendation is much tamer, calling for the government to “consider the establishment of a facility to assist suitable operators to buy new aircraft. ” It also suggests that under such a scheme operators would need to show a clear business case in order to access government assistance to purchase new aircraft.

Airports

Since many GA airports in city centres were privatised in the late 1990s, there has been an ongoing battle between the airports’ private operators and the operators which are tenants at the airports.

In its report, the SILG identifies the challenges which GA operators have faced since these airports were privatised. In many cases, GA operators claimed that they have seen massive increases in the rents for buildings at GA airports, and in some cases they have been forced to move elsewhere.

Also of concern is what some operators see as a lack of commitment by many airport owners to really retain their aeronautical operations, particularly at Bankstown, Jandakot and Archerfield.

In order to resolve some of the issues around airport access, the SILG has endorsed the current lighthanded regulation of airports, but has also called for the establishment of a formal mediation process.

“While the industry generally accepts that airports should continue to operate on a commercial footing, the SILG believed that some of the unresolved tensions between tenants and airport operators are unproductive and damaging to the industry as a whole. While recognising that overt regulation is not necessarily the answer, a low cost mediation mechanism should be useful,” the report said.

The issue of secondary airport access has also come to light over safety recently, particularly after the recent fatal crash involving a foreign student pilot near Moorabbin Airport. That event has led Victorian Premier John Brumby to suggest that flying training should be moved to regional areas, a view which appears to have found some support in the wider world outside of aviation.

Making it happen

With the SILG report setting out some strategies to address the issues facing the GA industry, it now appears that the biggest challenge will be over who takes the initiative to make it happen.

While the report seems to point to a coordinated effort between the various groups involved in GA to show leadership, the conservative attitudes and institutional suspicion which have been built up over the years between operators in the industry has made it hard to know where the leadership required to make many nesessary changes will come from.

Signs are that change is starting to happen, such as the move by AOPA’s membership to include John Gardon on its board, which Gardon says has helped to break down some of the barriers between GA and recreational aviation.

“We’re all interdependent. A strong sector from us helps GA and vice versa,” he said.

Yet some of the recommendations will require change to be initiated by government, particularly regulatory and training changes, which Minister Albanese has framed in the wider context of the National Aviation Policy Paper.

“A major focus for the White Paper will be on ensuring a vibrant general aviation industry is able to prosper as the nurturing ground of future commercial pilots and aviation workers. It is being developed in close consultation with all sections of the Australian industry, including general aviation operators,” he said.

But given that most of the discussion on the white paper has been geared towards the airlines, Gardon fears that the government will not give GA the priority it needs. “I would say GA is very, very low on the pecking order,” he said.

Consequently, it appears that the best results for GA will have to be brought about by the industry itself.