Unwrapping the green paper

Right through the document are acknowledgements of aviation’s issues – from big airlines’ desire to have aircraft depreciation schedules internationally competitive, to CASA staff culture, to the “barely profitable” regional airline sector, and the “commercial charging regime” of the privatised airports.

And there are plenty of planned policy prescriptions – easing the foreign ownership limits (within the 49 per cent cap) in Qantas – which could be particularly far ranging; a CASA board and an independent ATSB; a strategic air traffic management plan and so forth.

But in reality this is far from the “bold” policy document Infrastructure and Transport Minister Anthony Albanese spoke of in launching the Green Paper. In part this is because most of the ‘heavy lifting’ aviation reform has been completed – airline privatisation, deregulation, airport privatisation, the single aviation market with New Zealand, allowing 100 per cent foreign owned domestic airlines, etc.

And in part too other factors limit further wide-ranging reform – the international bilateral air route system effectively ensures Australia’s international airlines remain Australian owned; another reform might have been the privatisation of Airservices, which would no doubt raise much-needed funds for the government in the sell-off process but would result in another commercially controlled monopoly service provider – like the privatised airports – for the aviation industry to contend with.

But it is probably the privatised airports that pose the biggest challenges to Australian aviation, from Qantas down to the smallest flying school, and where there is the need for most reform. Former Qantas CEO Geoff Dixon (see our interview from p24) often lambasted the notion that the privatised airports competed with each other, calling them effective monopolies. And that’s a complaint shared by operators from regional airlines to small GA flying schools, who have seen rents sky-rocket at a time when airports have furiously developed non-aviation activities and achieved profit margins the envy of the corporate world.

That’s not to just blame the airport operators themselves – they are businesses trying to get the best returns they can from their investments – but rather the unintended consequences of the policy of airport privatisation in the first place is where most blame can be laid.

Unfortunately the damage is done and airport privatisation is an omelette that can’t be unscrambled. But the Green Paper’s in effect acceptance of the status quo – other than requiring that the airport master plan process “improve certainty” for aviation businesses – hardly provides the basis for fostering the small but critical aviation sectors of GA and the regional airlines – the vital training grounds for our major airlines.

When he presented the Green Paper at the National Press Club in Canberra Minister Albanese did acknowledge the pressure parts of GA faced, and the many pushes from around the country to close capital city secondary airports. But the Green Paper offers no reforms or solutions – airport planning rules will remain basically unchanged, there’s no regulation of rents monopoly airports can charge, Bankstown’s cross runway remains closed, there’s no ‘structural adjustment assistance’ like there has been/will be for other industries adversely affected by government decisions or external factors (the car manufacturing industry being the most obvious).

There’s a jarring disconnect here too. At a time when the federal government talks up the importance of “infrastructure”, under Minister Albanese’s brief it is pouring hundreds of millions of taxpayer dollars into other transport modes, but aviation remains the poor cousin – despite directly employing 50,000 people.

At least the industry had until the end of February to comment on the Green Paper before the final National Aviation Policy document is drafted. Now is industry’s last chance for constructive criticism and proposals to be heard.

Airport privatisation is an omelette that can’t be unscrambled.