Turning the corner?

“To some large degree, our industry has already had its global economic crisis over the last 10 years because its been drought driven, so a lot of the stuff to cope with that is stuff we’ve already done,” said Phil Hurst, CEO of the Aerial Agriculture Association of Australia (AAAA or Four A’s).

However, the optimism is only coming out in regions where there are good prospects of rain. “What we’re seeing at the moment is the drought is well and truly broken in northern New South Wales and Queensland. But you come to Victoria and its well and truly still in drought, as is southern NSW even though that may have eased in recent months,” said Hurst.

As in previous years, plantings of cotton and rice have remained low over the 12 months due to little water allocations being issued to irrigation farmers. As a result, those operators serving the Riverina areas and parts Victoria have been particularly quiet.

“Certainly the rice industry has been particularly hit with the lack of irrigation water,” said Rob Boschen of Deniliquin based operator Superspread. “Our Riverina operation is based around the rice work, but there’s been next to no allocations for the rice growers, so there’s next to no rice. The rice areas are back to five per cent of what they used to be even five years ago.”

As a result of those cutbacks, a number of aerial ag operators have been moving to provide more services for other crops, such as grains, canola and even tree plantations. Others have moved to diversify their businesses into other areas, such as chemical sales. “I think what that shows is that the industry is flexible enough to not sit around and cry that we’ll all be ruined, but to get on a and look at other opportunities” said Hurst.

Hurst also notes that the conditions have also created other positives. “When you look at one of the good things in the drought, a lot of companies have forged relationships they didn’t have before, so they can actually share resources such as pilots.”

Nevertheless, if the drought breaks, there is some concern that there will not be enough ag rated pilots to fulfil the work out there, as many have moved into different industries due to the lack of flying over the last few years.

“A lot of those blokes have left the industry or retired, so there’s definitely a shortage of pilots, and if there’s not there will be.” said David Warburton of Moree based Aircair.

Others, such as Boschen, claim that there are still enough new pilots coming through the system. “There are new pilots coming into the industry all the time, there’s no doubt about that. I get enquiries from new pilots in the industry from Australia and overseas on a weekly basis,” he said.

A key for the operators will be attracting the right people as pilots. “A lot of the Ag companies talk about building a team and it really is important to have a team that works well together because when the work’s on its pretty frantic,” said Hurst

In most cases, a number of ag pilots currently in the industry have been involved for the long term, and Hurst says that most new pilots coming through understand that while the industry will always be variable, that it is a job that few move on from. Naturally, many of the experienced operators look for pilots with the right attributes of maturity and a good work ethic.

With the state of the industry varying across different regions, Australian Aviation spoke to some operators around the nations to find out how different businesses were faring.

Northern NSW & QLD

For many operators in this region, the traditional cotton crop has all but collapsed in recent years due to insufficient water for irrigators. However, rains during the summer have meant that aerial ag operators have been kept busy serving grains and other broadacre crops to prevent weed outbreaks.

“The drought is different everywhere, and its quite localised,” Peter Travers of Goondiwindi based Air Ag told Australian Aviation. “Two years ago was the worst of our drought. The last 18 months was quite good and we’ve been able to recover and earn enough to survive for another 12 months. No-one’s really sure if the drought’s broken yet or not, but things are definitely looking better.”

In preparation, Travers says he has started the process of buying another aircraft to ensure that the company is ready for the expected busy periods. “We’ve been confident for the last two years that it will come back, but it’s basically a case of being ready when it rains. Two weeks after a good fall of rain is when we would expect to do a couple of hundred hours of [flying] time.”

Further north, some operators have been able to carve out valuable niches as smaller operators, such as Mark McDonald from Atherton Tableland Air Services (ATAS). Mark is currently the only pilot, and operates a fleet of dedicated smaller aircraft providing chemical spraying and urea application on crops of potatoes, sugar cane, peanuts and bananas.

“We’ve had a reasonable season due to the wet weather, but there’s definitely a downturn economically,” said McDonald. Until recently, ATAS had also provided aerial spraying in Asia, but Mark says that operation has now been effectively shut down by the economic downturn.

Despite that, the rain experienced over the summer and the nature of the crops grown in the region give some comfort to McDonald that their operation will, like others, be set to reap some good times. “We’re a little bit insulated from the economic crisis up here because most of the food production is for domestic consumption,” he said.

Southern NSW & Victoria

While the drought appears to have broken up north, those operators in the south who are still largely reliant on cotton and rice have continued to experience a tough time due to a lack of water allocations to support those crops. Nevertheless, there has been enough work to keep the operators going, albeit with some changes.

“We’ve structured our operation accordingly where we’re maintaining a service throughout the Riverina,” said Boschen. “We’re still operating there, but it’s a reduced service.”

However, some operators have been starting to see some improvement. “The last twelve months has been marginally better than the previous two years. Previous two years we were down to about between 10-20 per cent of our turnover and this year’s marginally better,” said Peter Little of Griffith based Combined Airwork.

As with their counterparts further north, that improvement is largely being driven by shifting into other crops. “Our business is developing all the time, and it’s developing on the strength of the work that’s available in the southern part of Australia,” said Boschen. “But the nature of our work is changing. Where we were once reliant on irrigation farmers, our shift has been towards dryland farming and forestry work instead.”

Another major activity in recent years has been firebombing, which Superspread provides for the Victorian Department of Sustainability and Environment. Interestingly, despite the devastating bushfires of February, Boschen says it has been a quiet fire season. “Prior to February it was a fairly low season. It rained in December and the summer didn’t come in until January when it started warming up,” said Boschen.

Looking forward, a number of operators are confident that with the expansion of dryland farming that there is some stability, although much still depends on getting rain. “We’re looking at a good what crop this year, so I’d say the next six months will be fairly average [level of activity]. Next summer’s looking a little bit poor because there’s very little water,” said Warburton.

Boschen added, “We’re certainly positive about it. Because of the size of the geographical area we cover, when one area is down, another will usually be up.”

WA

Unlike many operators in New South Wales and Queensland, aerial ag in WA has almost always been in support of dryland crops including wheat, hay, barley oats and canola in agricultural regions northeast of Perth.

Due to the different climate and farming methods used, this puts most aerial ag operator’s peak periods from June to November, with the busiest periods during August and September. With rain more regular in WA, operators there do not face the same variability in work that their eastern counterparts do.

“The thing that makes or breaks us each year is spring spraying during August and September,” said Scott Powell of Northam based Taurus Aviation, who added that during those periods, his aircraft will often fly from dusk until dawn.

For the Western Australian operators, the different seasons allow operators to send their pilots and aircraft off to the Eastern states during their peak periods, while Powell says he regularly bring in additional aircraft during August and September.

The largely complementary seasons also means that a number of aircraft can be used for aerial firebombing during the fire season. But as Powell points out, the approach that the WA government has taken to its fixed wing firebombing contracts of appointing a sole operator (currently Dunn Aviation) has meant that other operators have missed out.

SA & NT

Aerotech is a major operator across South Australia and Northern Territory, supporting dryland broadacre farming from bases across SA, as well as peanut and other operations in NT.

According to McCabe, ag operations in SA have been satisfactory, but a lack of rain has also taken its toll. “The last 2 years we’ve had a good start but we haven’t been able to get a September rain to finish things off. We’re hopeful of getting a good spring rain to finish it off and are hopeful for that this year.”

If we get a good rain, the farmers will go for it. I would hope it will improve over the last three but it’s a bit hard to tell,” said McCabe
McCabe says that his company has had to diversify into other holdings as a result of the lower rainfall. “It used to be probably five or six years ago that ag was propping up those other operations, but its been the other way round for a few years,” he said.

One major area where Aerotech has enlarged its operations has been providing aircraft for a contract with the Australian Maritime Safety Authority to provide oil spill response, for which it also subcontracts aircraft in the other states. Firebombing in SA is also a major part of the company’s operations.

Looking forward, McCabe says that his company will probably seek to expand its geographic reach, but this would be focused primarily in the current states it operates in, particularly in the areas where it currently has firebombing bases. But he notes that this will not spread too far. “We’ve found it pretty hard to manage from a long way away because you loose the hands on perspective,” he said.

Industry Issues

As well as the issues faced on a day to day basis by the operators, Four A’s has also had a busy year dealing with a number of bigger issues on behalf of its members.

A major issue for the Association has been working together with other sectors of the aviation industry on the modernisation and consolidation of the pilot’s Award. This is being done as part of a major push by the Australian Industrial Relations Commission to bring together and simplify a number of awards.

Hurst says that Four As worked closely with the other parties involved in the modernisation process to ensure that the flexibility which was built into the Aerial Application Award was maintained in the new one. “Every indication we’ve had from the commission is they understand that issue. If we’ve done our job properly, to the average operator and pilot there will be no change,” he said.

From a regulatory standpoint, Hurst says that relations with CASA have been improving, and it is hoped that with recent changes, including the appointment of new CEO John McCormick, that relations will continue to improve.

A major watershed has been the recent appointment of a new staff member within CASA who will be the single point of contact for the aerial ag industry. “That’s a terrific step forward. We had that before and it worked absolutely brilliantly,” said Hurst.

However, key challenges remain, and Hurst is keen to ensure that Four A’s is able to work with the regulator implements initiatives it has developed aimed at making it more efficient while ensuring safety is not compromised. “For example, we’ve been trying to get for about 8 years an in-principle approval from CASA to do a chief pilots course that they would recognise and thereby simplify the whole process. I think that’s a really good example where industry wins and CASA wins because they’re saving resources.

“My only question with a lot of this stuff is how soon can we do it, and lets just get on with it so CASA has a lot more resources to put into passenger carrying operations,” said Hurst.

Another major issue for Four A’s from a policy level is over wind farms in areas where ag aircraft operate. With renewable energy on the rise, the greater number of wind turbine towers have added to the number of hazards that pilots must be wary of when operating at low levels.

“Our view is very simple that wind farms and wind monitoring towers are a threat to low level aviation safety,” said Hurst. “As a result, wind farm developments should only be approved where the developer is able to demonstrate that there is no impact on safety or economics for our industry.”

Let it rain

While there is a positive outlook among many aerial ag operators, few have set ‘good time’ budgets as any major recovery to the heady days of the late 1990s will depend on regaining regular rainfall each year in the right areas.

Also of concern are the water allocations for irrigation farmers in NSW and Victoria which still remains uncertain due to the poor rainfalls in the catchment areas there. Nevertheless, with many ag operators serving dryland crops and expanding other parts of their businesses, most are well prepared to manage both the good and the bad times.

Even in the background of a likely recession, ag operators are still looking forward. “Regardless of a global economic crisis, if there’s rain and crops we’re in business,” said Hurst.