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Third-party providers need bailout, says RAAA

written by Adam Thorn | September 30, 2020
Basic Flying Training School CT-4 aircraft line up on the taxiway prior to conducting a formation flypast over Tamworth, New South Wales. (Defence)
Basic Flying Training School CT-4 aircraft line up on the taxiway prior to conducting a formation flypast over Tamworth, New South Wales. (Defence)

The industry group representing regional aviation has called on the government to provide financial help to third-party providers such as flying schools, simulator centres and maintenance organisations.

The Regional Aviation Association of Australia said there is an “immediate threat” to this “critical segment”, with many companies likely to close.

“Once gone these businesses will mostly not be replaced and even if they are it will take many years. CASA compliance and the infrastructure surrounding aviation businesses is very complicated and expensive,” said the statement.

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Earlier this week, the government announced it would continue to supplement domestic routes until 31 January 2021 and regional routes until 28 March 2021, however, this deal excludes third-party providers and airports.

The statement by the RAAA was signed by businesses including Virgin Australia, Rex and FlyPelican.

“Third-party providers such as flying schools, simulator centres and maintenance organisations deliver essential services to the industry without which these air transport operators cannot survive,” read the statement.

“Like the airlines and charter operators themselves, these essential service providers suffered an immediate and crippling loss of revenue when the COVID pandemic first struck and air transport virtually came to a standstill.

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“Once gone these businesses will mostly not be replaced and even if they are it will take many years. CASA compliance and the infrastructure surrounding aviation businesses is very complicated and expensive. The barriers of entry into aviation are high and the margins are low. The risks are inherently high.

“From the outset the Commonwealth government recognised the importance of aviation to Australia and quite rightly provided assistance packages to help domestic and regional airlines survive. These have now been extended but only as direct subsidies for domestic and regional airlines.

“Vital support services to these airlines have not received similar assistance. Yet like the airlines, these businesses have fixed costs such aircraft leases, mortgages, hangar and building rent, insurance and other significant overheads.

“We, therefore, call upon the government to provide an assistance package to these essential third party service providers along the same lines as the Regional Airlines Funding Assistance program. We rely upon these services.

“The situation is becoming critical for many service providers and we call upon the government to give this its most urgent attention.”

The intervention by the RAAA follows a similar statement by the industry body representing Australian airports, which said its members are being treated as “afterthought”.

Australian Airports Association chief executive James Goodwin said, “While these programs provide a huge helping hand to our airlines, our airports are still being considered as an afterthought.

“Even with this program in place, jobs on the ground are hard to sustain because the majority of regional airports are council-owned and don’t have access to JobKeeper.”

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Third-party providers need bailout, says RAAA Comment

  • Stuart Hutchison

    says:

    They are an afterthought … there is no functional Commonwealth advocate for General Aviation and CASAs focus is punitive regulatory over burden for the sake of legal and other public service job numbers (800, costing ivo $300m pa).

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