Aviation White Paper

“The government’s aim is to give industry the certainty and incentive to plan and invest for the long term, to maintain and improve aviation safety and security and to give clear commitments to travellers and airport users, and the communities affected by aviation activity,” Minister Albanese said in his speech launching the paper at the National Press Club on December 16.

Minister Albanese said that the paper was significant, particularly given the importance of the industry to the Australian economy. “One of the themes of the White Paper is that aviation is an essential component of our economic activity in Australia – it’s how we engage with the world, and with each other and we need to have debates and processes which ensure that the aviation sector and the community move forward to the extent that that is possible,” he said. “It’s not always possible for there to be consensus on these issues, but we do need structures that encourage that dialogue and encourage aviation activity to occur in a way that minimises any disruption to community life. ” That dialogue has been extensive. Over 300 submissions, predominantly from organisations and individuals involved in the industry, were received by the Department of Infrastructure, Transport, Regional Development and Local Government in response to the initial discussion paper released in December 2007, followed by a Green Paper which was released one year later.

However, not all reactions have been as enthusiastic as the Minister has been about the paper, with many within industry left wondering what really will change.

Overall, the industry appears to have been disappointed that for all the energy put in during the consultation periods, the paper appears to have delivered little long term vision.

“What we were really looking for was the government’s vision for aviation in this country as an industry, and we don’t feel it achieves that,” Paul Tyrrell, CEO of the Regional Aviation Association of Australia, told Australian Aviation.

“It’s a real kick in the teeth for many aviation associations who have burned the midnight oil [working on submissions] in good faith,” he added.

Some point out that a number of the government actions described in the White Paper – such as the establishment of a board for CASA – are already underway or represent parts of processes which have been ongoing for some time. Minister Albanese is unrepentant about this, saying, “We didn’t wait for the White Paper also, things that we were definitely going to do that were in the Green Paper, we got on with the business of doing. ” And while some sections of the industry are upset that the White Paper has been through such a process and delivered little, it has raised a number of political issues which naturally intersect with aviation.

The most visible of these in the mainstream media is the Rudd government’s policy of seeking an alternative to Badgery’s Creek as a site for a second airport for theSydney region. Similarly, changes to airline freedoms – including relaxing some of the ownership restrictions on Qantas and opening up more regional ports for foreign carriers to fly to – have also grabbed attention.

Yet, with such a broad policy document which clearly has major implications for the industry – both good and bad – there are several issues which bear examining.

Airlines

The majority of changes proposed in the White Paper will affect the airline industry, although most are expected to bring new freedoms to carriers, while potentially increasing international competition on some routes.

One of the more significant changes will be long awaited changes to the Qantas Sale Act. The White Paper suggests relaxing the investment caps for Qantas, meaning that a single shareholder will be able to hold more than 25 per cent of the company, while a foreign airline will be permitted to buy more than 35 per cent of the carrier. However, the 49 per cent cap on total foreign ownership will be retained.

The change was welcomed by Qantas CEO Alan Joyce, who said, “This change will increase Qantas’s flexibility as it meets the challenges of an uncertain global economy and business environment, opening up opportunities for strategic growth and alliances. ” On the other hand, the Australian and International Pilots Association, which represents Qantas Group pilots, fears that the changes will open it up to a merger with another carrier. “A merged Qantas means more offshoring of maintenance and crewing, something that would run counter to community expectations around the ‘spirit of Australia,’ said AIPA vice president Captain Richard Woodward.

The paper also reaffirms the government’s commitment to liberalising air traffic rights, with Minister Albanese highlighting the negotiation of an open skies agreement with the European Union as a major priority.

“We particularly welcome the government’s reaffirmed position on air services liberalisation, which recognises the need for a balanced approach, pursuing and preserving opportunities for Australia,” said Virgin Blue Group CEO Brett Godfrey.

The White Paper makes provision to open up air traffic rights for foreign carriers to regional international airports outside of the main gateways of Sydney, Melbourne, Brisbane and Perth to encourage more foreign airlines to serve cities such as Darwin, Cairns and Broome. This would allow carriers to fly to a gateway city via a regional port without it counting towards their seat or frequency allocations to that gateway city. For example, a carrier could operate a Singapore-Cairns-Sydney service.

So far, no airlines have specifically commented on the initiative, but in time it is expected that Asian carriers in particular may take the opportunity afforded to increase their services to the gateway cities.

Security

Security is another major focus of the paper, with some significant changes in store, particularly for regional airports.

The White Paper proposes to extend passenger and checked baggage screening to all flights operated by aircraft with a maximum takeoff weight of more than 30,000kg initially, and then to 20,000kg by July 1 2014.

That will include larger turboprops, in effect the Dash 8 Q400 series, but exclude aircraft such as Saab 340s and Q300s.

The paper also notes that in future this could also be applied to airports where closed charter flights operate. “The government will also examine, in consultation with the aviation sector, the feasibility of extending MTOW as a trigger [for security screening] for closed charter operations, noting the growth in use of large aircraft for closed charter flights in support of the mining and oil and gas sectors, particularly in northern and northwest Australia. ” Minister Albanese said that the system introduced by the previous government where passenger and baggage screening was undertaken at airports where jet services operate, was potentially ineffective. “It doesn’t make sense that the level of securityor screening is related to the propulsion of the aircraft, what makes sense is the weight of the aircraft. It’s the weight that represents the risk there for the system,” he said.

“Those issues are difficult to adjust to, but they are necessary” Tyrrell agrees. “It was kind of an obvious change because as turboprops become more sophisticated and heavier you couldn’t have a false delineation, otherwise you get smaller jets coming in and being subject to huge security measures and large turboprops coming in and missing out. ” The National Party seized on the proposed changes to security, noting that the additional cost of introducing checked baggage screening and passenger screening at smaller airports would likely lead to an increase in fares for passengers. “Some councils will face the cost of completely rebuilding their airport terminals to meet the new security requirements,” said Opposition transport spokesman Warren Truss. “Expensive x-ray equipment will need to be purchased and new secure areas built for passengers and luggage. If the full cost is directed at airlines – and then onto passengers – it will make services to some airports unviable. ” However, Minister Albanese hit back at the suggestions, saying, “Mr Truss’s irresponsible approach is typical of an Opposition that pretends to talk tough on security but opposes any real policies to make flying more secure. ” Overall though, Tyrrell says that the government needs to take more control of aviation security, and in particular help to bear some of the costs rather than leaving it up to industry.

“Security measures have to be backed up by a measurable threat that’s proven, and we accept that,” he said. “However, if threat levels go up to significantly higher levels, why keep loading it up on the industry? Surely this becomes a national issue. If the country is under threat, then surely the government should step up and put those measures in place and pay for them, not just keep on loading them up to regional airports and airlines. ” But while more airports will require screening, there will be some relaxations to security measures, with metal knives for meals, knitting needles and nail files to be taken off the prohibited items list with effect from July 1. As Minister Albanese put it pragmatically, “If you concentrate on items that are high risk you have a greater chance of ensuring that those high risk items don’t make it on the planes – that is the objective. ” Godfrey welcomed the relaxation, saying, “We welcome the good sense approach including the relaxation of restrictions on on-board luggage, which now brings us into line with international markets. ” The White Paper also notes that the government plans to reintroduce into parliament a change to security regulations which would restrict who can enter the cockpit of an airliner. The government tried to complete this in 2009 but had its motion disallowed in the Senate.

“It is an unfortunate reality that in 2010, access to the cockpit should be based purely on whether that access is required,” said Minister Albanese. “If it is not then it should be restricted and we will be pursuing that issue again when parliament resumes, because at the moment we can’t have self regulation of these security issues.

That’s not a reflection on any individual or pilots or any sectional interest, it is just a reality that we have a responsibility on those issues. ”

Airports

Noted as vital pieces of infrastructure in the modern economy, a large section of the White Paper addressed airport policy, particularly for capital city airports, with the major centrepiece being changes to planning policies.

Under the White Paper policy direction, the master planning process currently used by airports will be retained, but with more stringent guidelines for community consultation. This measure has already been enacted as part of the approval process of a number of recent airport master plans. “Through the structural changes about community consultation, it is about making sure that the consultation process is ongoing, not one-off,” said Minister Albanese, who noted that the Sydney Airport Community Forum would act as a model for other airports around the nation.

In addition, airports will be required to establish Planning Coordination Forums which will bring together state and local governments into the planning process to ensure that airports can effectively interface better with the cities around them.

“We have got to actually have an integrated approach to planning which is consistent with the Rudd government’s attitude towards engaging our cities in general,” said Minister Albanese. “Our major cities are the generators of economic growth. That will increasingly be the case as we move through the new century, so aviation has an important component in that. ” While planning issues were a major focus of the chapter on airports, the most watched part of the whole White Paper covered Sydney Airport and the possibility of building a second airport to serve the Sydney basin.

“The government will continue to adopt a balanced approach to the development of Sydney Kingsford Smith Airport – allowing for sensible commercial and economic development but also addressing the social and amenity impacts of this development on the communities living around the airport,” reads the paper.

“In this context, the government is firmly committed to maintaining the existing hourly cap on aircraft movements and airport curfew, as well as the noise sharing arrangements, at Sydney Kingsford Smith Airport. ” Additionally, the White Paper confirms that the joint federal and New South Wales government study into a site for a second airport, in the absence of the Badgery’s Creek option, is expected to put forward a proposal by 2011. The study group will also look at options at how best to develop the Badgery’s Creek site.

“This plan will help inform future infrastructure planning and investment by government and industry and enable the proper integration of future airport operations with surrounding state land use planning and land transport networks,” the paper reads.

The urgency and complexity of the process is not lost on Minister Albanese.

“There needs to be a sense of urgency about it because it needs to be regarded not just as an aviation issue, but you need your land transport issues to be dealt with as well, and it needs to be in the context of the economy of greater Sydney as well. ” AIPA’s Capt Woodward said that the inaction of the government on a second airport could have major economic impacts.

“The reality is that the White Paper’s nondecision on a second Sydney airport pushes any progress on this front away for some years and fails to address emerging capacity constraints at Kingsford Smith, which are impacting on tourism and industry,” he said.

While the White Paper gives no specific direction on which sites will likely be examined, it noted that the government will “review existing investment strategies for the civil and Defence airport facilities in the region, including an assessment of their capacity to meet the Sydney region’s future aviation requirements,” potentially signalling that RAAF Richmond could be opened up to airline movements.

However, opening up other Defence facilities for use as joint user airports appears to be off the cards, although changes are on the way for current joint user airports at Darwin, Townsville and Williamtown.

“Defence will be completing a review of civil aviation usage of Defence airports in 2010. Taking account of this review the government will ensure continuing civil access to Defence airports is compatible with current and future military requirements,” the paper notes.

“The government will also consider options in 2010 in relation to industry cost recovery arrangements at Defence and joint-user airports where Defence provides air traffic management and related services to civil aviation to ensure Defence is properly resourced to meet compatible future civil aviation requirements at an appropriate level of safety. ”

Regional Aviation

While noting that aviation in an essential lifeline to many regional and remote communities around Australia, the sector has expressed disappointment that the White Paper has delivered few new ideas to help foster it.

The biggest initiative to aid regional aviation is a move to consolidate the Regional Air Services Subsidy Scheme, Remote Aerodrome Inspection Program, Remote Aerodrome Safety Program and Remote Aviation Infrastructure Fund into a single regional airport funding scheme.

While welcome, Tyrrell says that the move is hardly an issue of government policy.

“I was staggered that was in the paper,”he said. “Having four tiny little programs supporting remote airfields was an administrative nightmare. With the stroke of a pen, a middle-ranking official could have collapsed that into one program. To put it in the White Paper – it was insulting. You don’t tout minor administrative changes as major supports for aviation. ” Disappointingly for some, the government has rejected suggestions to reinstate Commonwealth funding for regional airports, and will instead work through exsting channels to support council-run airports. “The government will provide support to councils in improving their strategic asset management but does not intend to impose any unnecessary regulatory burden on local governments in managing the future use of local airports,” read the paper.

Tyrrell also welcomed the announcement in the White Paper that the en route air charges subsidy scheme, which was due to wind up in 2012, will be retained to assist operators in remote parts of Australia. “For a tiny amount of money, you may keep a marginal regional route open and keep a town or towns supplied with an essential service,” he said. “It was a no brainer to keep that one going. ”

Regulation & Airspace

The White Paper notes that there are a number of changes to airspace policy, air traffic management and regulation of the industry, but there will be some welcome resource boosts to help advance those projects.

A highlight for CASA is a promise of an additional $3. 8 million increase in Budget funding to enhance oversight of priority areas such as helicopter activity, foreign operators flying within Australian airspace, and aircraft maintenance undertaken outside Australia.

The Minister said that this would help to put CASA on a firmer financial footing.

“That has been an issue that has been put in the too hard basket, and getting that framework in place has been very important. ” At the same time, regulatory charges will be capped at current levels for the next five years, CPI excepted. While seen by some as a welcome relief, many operators believe that costs are still too high for the industry to bear.

The White Paper also called for CASA to complete its regulatory reform program by 2011 and committed additional resources to the regulator from within the Attorney-General’s Department to ensure that this can be done in time. In addition, CASA is expected to complete its flight operations and licensing regulations by the end of 2010. Overall, the industry has welcomed the move.

To deal with the booming growth of light sport aviation, CASA will establish a Sports Aviation Office guided by a strategic framework on sport aviation, providing assistance with exchanging information between the sector and CASA.

The government has also called for action on aircraft noise, with the Minister noting that aircraft noise around airports was a significant issue for the community. “Airports are critical economic infrastructure which must operate in a modern economy, but residents have a legitimate expectation that every effort will be made to minimise disruption from aircraft noise,” he told the National Press Club.

Accordingly, the government will introduce regulations to stop noisy aircraft such as hushkitted Boeing 727s from flying over residential areas, while Airservices Australia will appoint an Aircraft Noise Ombudsman to handle noise inquiries, review complaints handling procedures, and monitor Airservices’ community consultation arrangements to improve the flow of information to the community.

This particularly became an issue recently with the WA Route Review Project, which has seen a number of residents from Perth’s eastern hills suburbs complain about the process undertaken by Airservices, particularly about the impact of aircraft noise.

In the area of airspace and air traffic management, the White Paper notes that a number of projects, such as closer coordination between Airservices and Defence on air traffic control, reduced restricted airspace, and other projects being run by the Office of Airspace Regulation are ongoing and expected to make the airways more efficient.

General Aviation

While only eight pages in total, Minister Albanese told Australian Aviation that he is proud of the coverage given to GA in the White Paper, particularly how it highlights the important role GA plays in the economy.

“I think the fact that we can make proper consideration of general aviation, which is often the forgotten sector, and the community feedback, has been extremely positive,” he said.

However, many within GA fail to see how “proper consideration” of the issues faced by the sector can be summed up in such a small chapter.

But some key concessions have been won, such as the protection of GA airports.

“The government will ensure master plans maintain a strong focus on aviation development at secondary airports and will not allow non-aeronautical uses to compromise the future growth of aviation activity,” the report reads. However, the majority of actions contained within the chapter on GA are essentially benefits from other changes, such as issuing a new Airspace Policy Statement, the cap on CASA charges and the reduction of restricted airspace.

Flying training, which was been noted as a growing industry with major economic benefits, will gain somewhat from a commitment to streamline the VET FEEHELP process for operators, which will allow some trainee pilots to defer the costs of their flight training.

Tyrrell says that this will need to be addressed, as the processes are currently too difficult for most operators to comply with.

“The hurdles for training companies to access VET FEE-HELP are enormous. You have to become an RTO and then you have to get CRICOS registration. Largely, the policies are targeted towards the university flying schools. ” To address the issue of the ageing GA fleet, the government has also flagged that it will provide incentives for private aircraft owners to buy new aircraft, with the White Paper pointing to extending the accelerated depreciation scheme to make it more tax effective to buy new aircraft.

The manufacturing sector has also secured little, despite the recognition by the White Paper of both component manufacturers and companies such as Jabiru Aircraft and Gippsland Aeronautics. Support will continue to be primarily offered through the Export Market Development Grants scheme, while it will also support CASA’s “efforts to establish mutual recognition arrangements with key trading partners to lower the regulatory burden for Australia’s aircraft and parts exporters. ” Tyrrell also notes that a significant opportunity to foster a growing aircraft and aerospace equipment manufacturing sector appears to have been lost, with the government committing to few steps to encourage the industry.

In particular, he notes that Brazil and Canada have built up large aerospace manufacturing bases. “They are powering ahead and we should make a better fist of it rather than a consumer,” he said. “The government seems to have missed the opportunity to engage with the international aviation industry and put forward a vision for that industry in the international context. ”

Flying to the future?

With the White Paper now out and the direction of aviation policy set for some time, Minister Albanese makes it clear that this year will be about taking the policy to the industry and community at large.

“I think it is particularly important during 2010 that after a document such as this… it’s important that we go out there and engage. I think it is also important that industry take up the opportunity that the White Paper presents them to engage them as well,” he said.

Minister Albanese said that the government will also move this year to introduce into parliament some of the legislation required to implement the changes. The Minister also said that he intends to use a series of Ministerial Statements in Parliament as well as some review processes to ensure the actions in the White Paper have their proper accountability. “We intend to have a regular review, if you like, of our own processes of where we are up to on implementing a range of the White Paper initiatives,” he said.

However, with many disappointed at the lack of long term vision presented in the document, getting industry to adopt the direction offered may be difficult.

“I think the talking has now been done with government because it has really soaked up about two years of energy,” said Tyrrell.

“What I’m hearing now is that the industry is talking amongst itself and will chart its own course and by and large ignore government with respect to these sorts of future issues. ” Nevertheless, Minister Albanese remains undeterred, and continues to hail the positives from the process. “People will continue to put forward their issues and advocate strongly – that is the nature of the industry – but I hope that the White Paper marks a bit of a turning point whereby people put forward the interests of the aviation sector in the context of the general economic interest of the nation and move beyond what has in the past, I think, been undermined by a narrowness from time to time. So I think if this marks a turning point, that it will be a good thing. It will achieve its objectives of providing a flight path to the future. ”