Big economic problems in aviation
We all know the economic problems that are besetting the world. Unfortunately in regards to Australian aviation (especially general aviation) I can see the problems striking very, very hard indeed.
Any properly run business copies the most efficient practices that exist. This is normally done by looking at competitors all around the world and making sure you perform as well – or even slightly better.
This has not happened in aviation. For example, let’s look at the regulatory reform process. I originally started this in about 1990 with the very capable Ron Cooper responsible. In those days there was an important direction – to remove every unnecessary cost. By unnecessary costs, we meant costs that did not add in an effective way to safety.
In the early days we were able to get some major changes through, which have saved hundreds of millions of dollars. However after about the first two years, almost all change stopped.
We now have a situation where over $100 million has been spent on the regulatory reform process in the last five years, with basically no results at all. When I say no results – well, good results for the people in the regulator who have been paid very high amounts of money to spend thousands of hours on bureaucratic mumbo-jumbo, but without actually making a decision. Because of the lack of decision making, the current economic downturn will doubly affect aviation in this country. That is, the effect from the economic downturn, plus the effect of not having modern, efficient regulations which allocate our safety dollars effectively.
Only recently I spoke to a number of the reform people in relation to the fact that we are prohibited from joining directly on base at a non-tower aerodrome. This is allowed in every other country in the world. The savings in Australia would be many millions of dollars, and there is the potential for safety to be improved.
Amazingly enough, when I spoke to one of the industry people who is on a reform panel, and appears to be responsible for making the final decision on this (don’t ask me why) it became apparent that he couldn’t see any advantage in harmonising with modern international circuit procedures. Then I realised that he worked for a Government department and didn’t pay for his flying. In fact, a few more minutes in a corporate jet at each airfield, performing a full circuit, was probably considered good because it would contribute to his flying hours!
Let’s look at some of the other changes that have never been made.
1. Rescue and Fire Fighting
When I last looked, our RFFS charges were double what they were per tonne landed in New Zealand. We are the only modern aviation country in the world that still has rescue and fire fighting run by a Government based monopoly. Even in the United States (which we all know is quite socialistic with aviation) has the rescue and fire fighting run by local airports in a totally competitive environment.
Even though there have been announcements that competition would be allowed, I have been in communication with a number of good Aussie companies who want to provide rescue and fire fighting at some of our airports at more competitive prices, however they have got nowhere.
2. Competition with towers
We all know that even in the United States, the Class D control towers are open to competition. This is apparent because even Airservices Australia bid on one of the contracts and is running towers in Hawaii.
No such competition is allowed in Australia. That means that towers at places like Bankstown, Moorabbin and Archerfield are incredibly expensive because they have the huge Airservices Australia Canberra overheads.
I know of air traffic controllers who would like to quote on operating the towers. It would probably result in better working conditions and pay for the controllers, but a more flexible arrangement and not having to pay $500,000 salaries in Canberra. Nothing has happened.
3. The ASIC card
This was introduced by bureaucrats in the Department, however there is no similar requirement in the United States – the home of September 11. Obviously millions of dollars of expenditure and time is wasted on this – all money which is added to the overheads of anyone flying, and makes the whole thing uncompetitive.
4. Duplicated military/civilian ATC system
Imagine the cost to our country! It must be a waste of tens of millions of dollars per year. Remember, it is not just that the controllers are duplicated, but we have a duplicated radar and training system.
There are many other examples like this. Here is another one.
In other leading aviation countries, a non-pressurised aircraft can fly at 12,500 feet without additional oxygen. Our limit is 10,000 feet. It has been worked out that the fuel saving in allowing this modern, international approach would be up to 3% - i.e. millions of dollars per year saved in avgas. The advantage is that the pilot could often be above the inversion layer and flying in smooth air, rather than in the thermals. Nothing has happened.
There are lots of other examples.
Most importantly, I have always mentioned that the safety regulations must be affordable by those who pay. I know I am rubbished on this site by a few ill-informed people who claim that I introduced “affordable safety.” Of course I didn’t do this. I simply pointed out to everyone that it was a fact of life – the money spent on safety must be affordable by our society, otherwise the service does not exist.
As the industry starts to downturn further, with more and more people out of work, I would imagine that all of the people in the Department (under Mike Taylor), people within the ATSB and within CASA will be smiling. Remember the “Yes, Minister” episode on the hospital without any patients? What could be better for the Department, the regulator and the investigator to hardly have anyone flying?
A terrible catastrophe is about to happen with aviation in this country. I can see huge numbers out of work, businesses going broke, and opportunities lost. All we need is some capable people who understand that running efficient businesses depends on having efficient practices and minimum waste. I wonder if the changes will be made when it is too late and the industry is basically destroyed?
Last edited by Dick Smith; 24th Oct 2008 at 00:58.