Getting slugged

The draft Cost Recovery Implementation Strategy (CRIS) proposes some 90 new charges related to Part 61, as well as identifying an ongoing structural deficit in CASA’s budget – despite it turning a handy $12 million profit last year.

At no stage is it proposed that CASA should significantly reduce its staff or review its processes or remove highly prescriptive, micromanagement regulations it has put in place in recent years.

Various industry sectors – from FIFO to aerial application – are suffering significant downturns due to market and seasonal conditions.

Companies are confronted with the reality of having to cut their cloth to meet their income every day and this means some very tough decisions being made – how to keep the team together, how to restructure, how to cut costs, how to manage with fewerresources. The same disciplines apply to industry representative associations.

This is all about dealing with reality – regardless of being a private or public organisation. But it appears that CASA is immune from these normal processes and stresses as it simply proposes to go back to the trough of industry charges without any efficiency drive.

CASA’s current staffing level is approximately 830 full-time staff equivalents. If a normal management response to reduced income is to review what you are doing, how you are doing it and how many people you need to do it, is it too much to ask that a public sector agency should undertake the same comprehensive establishment review before it simply demands increased charges to industry for the inefficient delivery of mandatory requirements? A good example of the potential for more efficiency is the current delink between the CASA classification of operations policy, CAR 206 that defines aerial work categories, Part 137 that defines aerial application operations and the CASA Form 1214 Part B, that seeks to impose a completely different set of categories that have no head of power. In addition, the time required for AOC issuing and AOC renewal is now out to record delays – for no apparent reason.

CASA seems to enjoy the best of both worlds as a monopoly. It can create mandatory regulations –

Various industry sectors – from FIFO to aerial application – are suffering significant downturns.

indeed, regulations that are subject to the strict liability and penalty provisions of Commonwealth law – and then set charges and levies to recoup costs, without having to improve the efficiency of its processes.

In addition, it can appeal to the government to increase the amount of tax paid through a levy on aviation fuel, something it did in 2010 despite the protestations of the industry, increasing the tax by close to 25 per cent.

But when faced by a downturn in industry and thereby a likely decrease in income, CASA appears to be fitted with a one-way valve. Industry charges can always be increased, but they can seldom if ever be reduced. This gravity-defying charging trend is neither sustainable nor fair, nor based on safety.

The challenge for new management at CASA is to establish a long-term system, in partnership with industry (which is clearly best placed to help CASA identify where it is inefficient) through which CASA can cut costs and increase efficiency.

Continuous improvement is a concept that has been embedded in management theory and practice for decades. However, there is little evidence that CASA is capable of learning from its mistakes (think of the debacle of Part 61) or pursuing self-improvement under its own steam.

Despite the massive and groaning structure that CASA has established for industry consultation – notably built on the ongoing goodwill of industry to contribute the time of senior people with experience in regulatory issues – the outcomes have been very disappointing.

It is one thing to go to meetings. It is entirely different to hear what is being said and then act on the issues in the interest of safety and efficiencyGovernment and CASA management could do a lot for their own credibility and future outcomes. By establishing a joint industry/CASA taskforce to review every CASA charge, investigate and, if necessary, remove, repair or improve the system behind the charge and to look for large- scale savings based on a regulatory philosophy more in tune with different sectors, CASA could start the long march to efficiency.

Re-establishing trust and respect starts with ensuring your own management house is in order. It’s about outcomes, not just talk.

Joint NZ/AAAA Convention – Queenstown 2015

The AAAA and the NZAAA combined conference registration is now online – www. aerialag. com. au.