Bottoming out or extending?

Most aviation companies are reporting negative growth but are still remaining in the black, albeit just for some, in a very challenging environment. It does appear that the downward slide is slowing with passenger and freight numbers, while not growing, beginning to stabilise.

The next twelve months will be decisive as all industries watch to see if the early signs of reinvigoration in the mining and resources industries are to be believed. It is just too soon to call. Regional airline and aviation business owners are in the delicate position of hoping that the worst is behind but not being sure if sustainable recovery is imminent. This makes decisions about new capital investment very challenging. Given the high upfront costs of regional aviation, CEOs and their senior staff will tread carefully over the next quarter.

In light of the above, it was encouraging that Airservices Australia has decided to freeze their charges for the next two years. Finally a government entity has shown some support for an industry that receives very little direct fiscal encouragement. It is reasonable to ask whether CASA could enter into the same spirit and freeze or even lower their charges. These small measures can make an enormous difference to many regional aviation businesses. It can mean the difference between having a future, or closing the doors. Radical measures are not required, just realistic changes that will encourage investment and employment growth in the industry. Regional aviation businesses pay their taxes in good faith. It is sometimes galling to have to pay for a government service that could be provided through consolidated revenue. There is no doubt that Australian aviation can regain its place in the world’s top rank of aviation countries but the oppressive tax and charging load must be lightened if the industry is to flourish. The talent and will exists in the industry but poor policy, excessive charges and overblown bureaucracies will be the speed brake.

It may or may not come as a shock to readers to learn that during recent research on aviation infrastructure it was discovered that the federal government does not record aviation infrastructure spending separately. It is recorded under road infrastructure. That’s right, if you build a runway or taxiway or other aviation structure it is recorded under roads because no one had thought to give aviation its own category. It is understood that this staggering omission is being amended but how did Infrastructure Australia (IA) analyse this country’s aviation infrastructure needs if there was no separated data? Why didn’t someone notice this omission until it was pointed out? It might explain why in IA’s 90- odd recommendations there was only one relating to aviation. One thing is indisputable, the government and its executive arm are there to serve the people and their industries, not the other way around. The aviation industry is constantly and quite rightly held accountable for the safety of its passengers and its operations. The government and its aviation decision makers must be held accountable for the quality of their analysis and policies by the industry that pays their wages.

There is no doubt that the above and many more topics will be debated at the 10th RAAA Convention, Hyatt Coolum on September 30-2 October 2009. We look forward to welcoming you there.