Light at the end of the tunnel?

The carbon tax was particularly damaging with its estimated costs to domestic operations of around $200 million a year. This was imposed on an industry that for decades has been obsessed with fuel efficiency and had already reduced its fuel consumption as much as possible. It was not imposed on private motor vehicles, an area which has far more potential for emission reduction than regional airlines. Nor, for some reason, was it imposed on international flights including those of Qantas and Virgin. The removal of this tax brings much welcome relief.

The need for some form of subsidy for air services to smaller regional centres was recognised in the Labor government’s Aviation White Paper of 2009. However, the en route scheme, which provided relief from air navigation charges for smaller airlines, ceased in 2012 and has yet to be replaced. The current Coalition government is moving toRegionsinstitute a new scheme which again will provide some relief, although not on the same scale as the former program with funding being cut by around 75 per cent.

The inequity of the CASA fuel levy was highlighted in a senate inquiry in 2011 where the RAAA gave evidence. However, the funding model remains unchanged since then and the fuel levy currently forms 64 per cent of CASA’s revenue rising to 71 per cent over the period of the forward estimates. The balance comes from consolidated revenue and CASA fees and charges. The levy only applies to domestic flights, including regional operations, meaning that all international flights and the airports do not pay a cent yet they consume considerable CASA resources. The RAAA would like to see government review this funding model and a fairer one introduced.

The government’s Aviation Safety Regulatory Review (ASRR) is now finished and by and large has been welcomed by the industry. Although charged with examining all government entities involved with aviation safety it inevitably focused on CASA and has recommended significant changes, all aimed at improving the relationship between the regulator and industry and the regulatory reform process.

Among other things the report recommends a new strategic direction for CASA, more policy oversight by the department, proper governance from the CASA board, the development of a collaborative approach with

These are ambitious targets and will require cultural change from within CASA.

industry, establishment of an effective industry complaints commissioner, audits that reflect proper international auditing standards and the drafting of new regulations with reduced offence and penalty provisions and that are easier to understand.

These are ambitious targets and will require cultural change from within CASA and its management team. However, indications are that Deputy Prime Minister Truss is taking the report seriously with moves already taken to appoint people to the CASA board who will make a difference. For whatever recommendations from the inquiry that are adopted by the government, the RAAA would like to see a follow-up review in 12 months time, preferably by the same panel, to see how effectively recommendations have been implemented and to make any further recommendations asdeemed necessary.

The reform of CASA will take time but if done properly will eventually result in some relief for the regional aviation industry which has had to implement major and costly reform under a regulatory regime that was too often focused on regulatory change without due regard for a cost/safety case and often with unrealisticdeadlines.

The decline in regional aviation continues with the collapse in recent months of two significant regional operators in Brindabella and Vincent. However, the moves by the government to repeal the carbon tax, introduce a new en route rebate scheme and put the safety regulator under the microscope are all positive in helping to create a sustainable environment for regional aviation. Maybe one day soon there will be a light at the end of the tunnel.