Economic realities

CASA’s challenge will be to say to its senior managers a new train is leaving the station. Either get on it and be part of a refreshed CASA/aviation community relationship or get off. The policies of the board and the directions of the CEO are not options to be considered in internal working groups but orders that need to be followed. With private and commercial GA on its knees and regional RPT struggling for growth there is quite literally not a minute to lose.

Within CASA, the Office of Airspace Regulation (OAR) needs a shake-up if it is to meet Australia’s 21st century airspace needs. While airspace changes always require careful analysis, OAR needs to be ahead of the game and not simply reacting to the latest crisis, confected or not. The recent public stoush between the Senate and Airservices has some way to run. To be fair Airservices is trying to manage a very complex and expensive project in OneSky, but it has run headlong into the sights of one of the Parliament’s most experienced and aggressive Senate committees, chaired by Senator Bill Heffernan. The fascinating thing to watch is that all committee members have put their political differences aside and have zeroed in on the probity of the OneSky contract. Probity is a favoured topic of Senate committees and Airservices senior management will need to bring its A-game to the table. The introduction of the Australian National Audit Office into the equation means things are getting very serious regarding the $1. 5 billion program.

It is not in anybody’s interests that the OneSky project fails, but the future briefing of the Senate and the messaging to industry needs to be more detailed and sophisticated. The current doubts may dissipate once the hard evidence is heard, but clear and frequent communication is vital.

On the regional front lower fuel prices are keeping many routes in the black, but not by much. A diving Aussie dollar and a spike in fuel prices would make for an even more challenging regional aviation environment. It is essential that CASA and Airservices keep their charges and their red tape to an

General aviation is suffering its largest downturn since WW2.

absolute minimum if regional aviation is to navigate this difficult period.

General aviation is suffering its largest downturn since WW2. The reasons are problematic, but the cost of flying and maintaining aircraft is one of the main drivers. Wages growth has been relatively low in recent years and people simply do not have the cash to jump into GA in numbers common in past decades. Recreational and sport aircraft will continue to flourish because their products meet the market and have a relatively light regulatory oversight. Is the latter becoming the new private GA? If it is it will pose CASA a whole new list of regulatory questions.

Aviation lives in the middle of the broader economy. Our dollar may test 65 US cents which means higher prices for everything that we import, with some balancing on the export side of the ledger. However, there is a sweet spot for the dollar and we are in danger of moving below that acceptable range. This movement could trigger a loss of business confidence.

The upside is that aviation has proven to be a highly resilient industry, given it provides essential services to the city and the bush. Yes, there will be a lot of belt tightening but not many failures. The upside of a mature aviation industry and workforce is that they have seen these cycles before and are adept at weathering them. However, the well-heeled government agencies must understand clearly these economic realities or there will be very little left to administer.