Sunfish
The information you are looking for is readily available and easily obtained.
Against the US which is the nearest comparative, the only extra costs in regard to say maintenance and parts might be the difference wrought by the exchange rate, freight/ferry and relative industry payscales.
One sentinel might be that when we floated the Oz dollar in the early eighties, the exchange rate went from around $1.25 to $0.85 almost overnight.
Almost overnight Oz costs especially for the capital component went from around virtual parity, with the exchange rate differential mitigating the distance and regulatory cost issues of the time, to real world differences relative to the real value of our dollar.
E.G. exchange rate say $1.25 new 1980 Cessna USD$65,000 = AUD$52,000 plus freight/ferry C of A costs and eqipment = Oz retail circa
AUD$65,000.
Post float exchange rate say $0.85 for the above = AUD$76,500 plus freight ferry costs = Oz retail circa
AUD$91,500, literally overnight.
Given that by that time the fleet average age was already 10 years old and that the race to the bottom on rates had been in full swing for that long with revenue rates still set at increasingly lower than 1970 dollar (0.85) equivalents, who was going to renew the fleet.
The key to the whole issue has
always been the revenue rates set by the operators.
They do not seem to have too many problems with paying $25,000 for the same type of motor car as they paid $2,300 for then, but can't seem to make the translation in aviation terms. Car rental rates reflect the same.
We could argue the "correctness" of the analogy all night long but that's how many angels dance on the head of a pin.
:rolleyes"
Go check the number of 6 figure boats bobbing around in your local marina.
One might be tempted to suggest that if they are unable to take such a ridiculously simple concept on board they would not even come close to meeting the "fit and proper" requirements for the holding of an AOC.
I digress.
In essence apart from the exchange rate differences applied to the parts, fuel, freight and labour costs the operating costs differences between the US and Oz are not all that different.
If there are any regulatory and compliance cost differences (the Oz regs largely reflect the FAA regs, given the Oz operating environment is as the moon is to the earth) they are not significant given that the revenue rates charged reflect the real costs including depreciation and replacement costs.
They do not.
We have a different tax and fuel excise regime, we can't change that easily we just have to use that as an input.
The net result in any event is and it's Economics 101 you work out your costs including depreciation (against new replacement) and all of the overhead and mangement costs and then add your PROFIT margin.
If the business plan can not ultimately support that rate then you don't have a business. I suspect they might have taught you that in your MBA.
You can go rewrite the plan recheck your data and it'll either get over the line or not.
If there is some blue sky amongst the clouds, the decision to pursue it or not, is then made on the basis of the
risk capital available.
Usually, the creditors, bank or the finance company are the unwitting "shareholders" or suppliers of the
risk capital.
Are costs excessive compared to international benchmarks?
No and it's not the costs that are the problem it's the revenue rates charged or not as the case may be.
Are we being gouged by anyone, if so who? How do we stop it?
Gouged is an emotive term used by most operators to justify their transfer of the "profit" opportunity from the passenger to the supplier.
Is regulation excessive and does it constitute a barrier to entry, forcing our costs up?
Maybe in private ops, but not so in commercial terms.
Yes it should by definition constitute a barrier to entry.
It is the only way you can set the bar and the level playing field in acceptable standards.
It is the lack of uniform enforcement of that barrier to entry that has caused many of our problems.
Forcing up our costs?? The costs are what they are, the problem seems to be ignorance (ignore ance
) of the totality of them or not passing them on to the market.
Yes we should have competition in the market and yes it does stimulate the total, but lets have it at an economic level.
Despite the usual suspects, who have little or any capital involvement, bleating, reducing compliance and service provision costs is not going to save them, nor is it "killing" GA.
GA as it is currently practised (
v, tr and adj) is "killing" GA.
The AUF/RAA seem to have it right in their patch for the recreational flyer.
There's a PhD in there somewhere.