Competition for the first time in ATC

[Dick Smith]

It is hard to imagine but for the first time ever in Australia, competition will exist for air traffic control services. With the recent amendment of CAR 2, Airservices will be able to sub-contract services to the lowest bidder.

This is clear. It means that a tower like Bankstown or Moorabbin will be able to be put out to bid and the lowest tenderer will be able to provide the service.

Yes, full competition, just as you get when you go to a Harvey Norman store or when you go to the local supermarket.

Come on air traffic controllers! Why not set up your own business? Run the towers without the huge overheads and $500,000+ salaries of the Airservices head office, and make yourself a small fortune. Who is going to take up the challenge?

[Hempy]

Good plan Dick, maybe you could start an organisation up.
"Dick Control". Good luck with the hiring process :}

[Uncommon Sense]

Dick is referring to the following:

http://www.casa.gov.au/avreg/rules/changes/2004/stat217.htm

The changes will ensure that the term ‘air traffic control’ for the purposes of the 1988 Regulations will also include any person who provides air traffic control services in cooperation with AA or under arrangement with AA

When Dick says "Full Competition" just like Harvey Norman, well, yeah I guess if Harvey Norman says it's ok and you enter a commercial agreement with Harvey Norman to compete against Harvey Norman, and Harvey Norman want you to compete against Harvey Norman, and you have insurance and.....

Unless I missed the full competition part of the amendment Dick, I don't see any opportunities soon for Air traffic Controllers to set up their own business.

What is more likely, and probably the raison d'etre to this legislation, (despite Dicks "working behind the scenes" claims), is to allow AirServices Australia to set up a LCC equivalent of their Towers division (Airport Services) as a sort of 'AirServices-Lite', pay their controllers whatever they can get away with, put them on contracts, keep all the really profitable bits (Enroute Airways Charges) for themselves. Of course, this will reduce costs for GA and stimulate aviation in Australia. Ahem.

And here was me thinking that ATC was about Air Safety. How wrong I was - it is all about making profits. Like NATS in the UK? Oops - the government (read: taxpayers) there had to pay for it - privatise it - then bail it out 6 months later!

Some things should be not be commercial operations. ATC is a fine example.

(BTW - don't know how often you get down the supermarket, but it looks like a sweet little duopoly to me these days!)

One Fanatastic outcome: This will enable the new Broome Tower (http://www.dicksmithflyer.com.au/Content.php?ContentID=272) to be opened just a little later than scheduled.

[sprocket]

Are we talking about making a million ..... or aviation saftey?

[SM4 Pirate]

Dick, you and I both know that getting insurance as private entity would stop your ability to go into competition with or work for Airservices as an ATC provider. This reg change is nothing new, it means that ASA must own or directly 'supervise' the operating certificate. That is the only new players able to play must be owned by Airservices.

What this does enable is the ASG (Airport Services Group) to become a true seperate business, a sibling of the parent company instead of the different 'bucket' that it now is. It would still need to operate under the parent companies 'operating certificate'.

I can't believe you would promote only half the story; if you truly believed it is so, where is the DSATC Co? There must be a buck in it?

[megle2]

Dick,

With respect I don't think its a case of the cheapest price gets the contract.

I have always thought safety came first and maybe as you put it "affordable safety" is then considered.

To the detriment of all concerned the GA ethic of the lowest price gets the charter / endorsement / rating ect is killing GA!!

[Whistle Blower]

Quote Uncommon Sense on another thread:

Total Staff: 2885
Management:340
Clerical Admin:266
ATC:978


If this is the case what a joke. Talk about too many chiefs not enough indians. As a professional Pilot, it makes me really angry that my colleagues and I suffer financially because of the added costs airservices add (directly or indirectly) to the bottom line of my flights.

Competition is badly needed. Nothing against controllers, It's the guys at the coalface who provide the safety... not administrators.

The savings made by a cull of this dead wood could be put back into reviving the fortunes of Aviation in this country.

Any organisation like this would never compete against decent competition... to survive it'd shape up REAL fast.

Those who bleat otherwise have NFI.

Anyone remember Telecom (telstra) before Optus came along?? I do.

[Uncommon Sense]

SM4:

You said about Dick:

I can't believe you would promote only half the story

Are you sure you meant to say that? ;)

[Deaf]

Unfortunately some things are natural monopolies.

Of course for BK and MB one could have the right runway(s) for tight right circuits, left for tight left circuits and the center for the "airline" trainees on their (not so) mini cross countries, direction optional. Of course the three competing controllers would need to be on different frequencies.

[Binoculars]

Let's not be too hasty in disregarding this possibility just because it comes from DS. Before the legislation was knocked back last time, my own station investigated all the possibilities, and for a while it was an exciting idea. Setting up our own company with a core of controllers who wanted to be part of a team that would do what was necessary to provide the service required was a dream for a while and we all pondered it.

Think about it without the contaminating idea that DS favours it. A station like Mackay can be massively profitable just on the existing income from the RPT aircraft who want us there. I couldn't possibly tell you how much of our supposedly self regulated budget is taken away from us before we even start the calculations about profitability. We could employ a well paid admin clerk full time at about a fifth of the cost of the admin overheads from AirServices. We would also no longer have expenses that we know absolutely nothing about removed from our budget by the remote entity of AirServices Canberra.

We could have a 25% pay increase and still reduce costs by 25%, we could hire our own staff so we knew we were getting people who were committed to our own , err, what do they call it again.. Vision of Excellence! And we wouldn't need to be empowered to do it!

People would want to come to work because they are responsible for their own income. They are part of a team, and if they don't turn up they're letting the other bloke down. If something needs doing it gets done by whomever is available, unhindered by rostering principles or class warfare ideals. The BIG stumbling block was insurance.

On this one, Dick, I'm with you. How it would work in bigger centres I've no idea. It's too late to make a difference to me, but for the sake of future controllers who have been brought up in the last fifteen years of strict adherence to the bottom line being the only criterion for anything, and covering your arse being the major decision-making criterion for control decisions, I hope it can happen. ATC used to be a really good job guys! Maybe it still can.

Edited to say that those costings included nil charges for VFR aircraft. We should be encouraging training organisations, not penalising them.

[tobzalp]

Privatised towers work very very well the world over. I for one support the idea. The costs can be lowered dramatically for the local users. I think that anyone with any ideals of a privatised Enroute ATC system in this country for a very long time has rocks in their head. Aviation is viewed by the public as one of the industries (like medicine etc) that can have no mistakes. This is why NAS if crumbling and why an outsourced solution to Enroute needs will not gain enough credit to be viable.

[Hempy]

You want to work for Serco for 45g ?

[Capcom]

:hmm:

ROO LOOSE.................ROO LOOSE :rolleyes:

:yuk:

Wake up!:suspect:

You want to work for Serco for 45g ?Nup, I'm with you Hempy, I'll be off like a shot if that crap starts here :mad:

PEANUTS and MONKEYS:hmm:

[Binoculars]

Who are you talking to, Hempy?

I don't think any of the guys currently in the ME employed by Serco took a 50% pay cut. If you think somebody like Serco is going to come in and undercut our current conditions, you have to ask where they are going to get the employees. They'll get lots of applicants from countries ending in -stan, and the aces from Swaziland, but I don't know anybody else in the world of air traffic control who would jump at the chance to earn what we procedural approach controllers are getting.

We certainly have difficulty attracting raw recruits up here from Brisbane, and that message is finally getting through to the bigwigs. Unless they can shake the towers loose to a private consortium, they're up **** creek because they haven't trained anybody in years. Trainees go to an outstation tower and think phark that, I'll stay in the capital city thanks. Clear to land, clear for takeoff, and another 20K a year. Airservices say no, you are now our new hope, you're staying there. Staff management remains as good as ever.

Stuff it, time for bed.

[Capcom]

Binoc's

True!, but

Have ya spoken to anyone who has worked for Serco in recent years?

Currently, geography is the only 'attractive' for procedural app/towers. As you point out, pay v's complexity certainly ain't.
If privatisation were to happen, Sector/Radar App people will not resign to take up a position with 'Acme ATC services' in the outstations, will they?

Thus the -stan, -frican, and any other half baked bod that will work for sh1t all (and there will be plenty of them) making up the potential staff list!:sad: and, where will they all go after getting there nice shiny new App P/Tower ratings?..........ELSEWHERE........back to square one repeatedly!

Who's gunna train em?
What do ya do with them when they do not rate?
Will a private company apply pressure to rate after an investment of training dollars?
Administration?
Compliance tracking?
The ever mounting paper war?
Who in there right mind would want to run one of these stations?
Licencing?
INSURANCE? Know a bit about this one, good luck getting any, let alone how much it would cost!. AsA will not underwrite a private provider!

Not for this littl' black duck I'm afraid:hmm:

Unless and until network pricing is permitted to support services at regional airports, the results will be the same! What is happening right now...!:eek:

Privatisation makes the network option disappear for the industry entirely:sad:

Cost effective? questionable IMHO
Safe and expeditious? questionable IMHO

Nighty night;)

Edited to currect bludy baad spelin

[Jerricho]

Full competition? I really don't think so.

[ferris]

I'm just glad to see Dick has dropped his crusade for "the US system". Well done Dick, glad you've come to your senses. Otherwise, I would've expected you to be out there, threatening ministers etc. in order to achieve ' a more modern, world's best practice' system of funding air safety infrastructure- just like the FAA. The FAA are actively looking at reducing/removing privatised towers. Yes, that BASTION of privatisation, the United States, has a system more akin to funding by general revenue- non of this profit-driven malarky for them!
Good to see you moving away from that mindless following of all things yank, Dick. Sense, at last.
I mean, if you REALLY believed in the US system, you'd want to copy the whole thing, right? It could just be the funding part of their model that allows their GA to flourish. So, you wouldn't want to totally stuff the oz system by not making ALL the changes, especially the CRITICAL funding aspect, would you? Good work.

As the US system is "proven", "modern", "world's best practice" etc. etc., I look forward to your reasoning on WHY you are diverging from their model. There are some people at AOPA and the ARG I need to help with this.

[Bevan666]

The federal contract tower program seems to work very well in the US and I hear that even AirServices are bidding to run some FAA towers in the pacific at the moment.

Privatised towers - bring it on.

Bevan..

[Dick Smith]

SM4 Pirate, the claim that private companies won’t be able to get insurance to run ATC is a total furphy. It happens all around the world. In the UK many of the terminal services are run by competitive businesses, not the Airservices equivalent. In the USA a percentage of the Class D control towers are run by businesses other than the FAA. They all have insurance and the tendering process is a very competitive one.

You state:

That is the only new players able to play must be owned by Airservices Where did you get this? From what I have been advised this is not true. Airservices will be able to contract the tower to the lowest bidder. The amendments to CAR 2, which I was instrumental in having done, were nothing to do with the ASG within Airservices becoming a separate business. If that were so, it would have been Airservices pushing the amendment to CAR 2. As it was, I don’t think they even knew we were working on it.

As Airservices loses money on all of the smaller towers, they should be pushing to subcontract to the lowest bidder. Of course, it is obvious that any operator of the tower will have to comply with the CASA safety standards. That is why a large amount of money was spent a number of years ago in setting CASA up to be able to separately regulate air traffic control service providers.

I ask again. Come on! There must be a few air traffic controllers out there with some entrepreneurial skills who can set up a company to operate these towers. I’m sure if you were operating five or six towers from one company with low overheads, that really good money could be made. It would also allow air traffic controllers to have greater flexibility – i.e. head off to the beach when there are no RPT services present, then come back and man the tower when required.

[Binoculars]

Capcom,

My reference to Serco was only in response to Hempy. My own belief is based on what DS suggested (sigh), namely a private company set up by the controllers on the station concerned, and to those whose world can't encompass anything outside a row of radars, yes, I'm talking outstation towers here.

I'll repeat that the reason why most such places are currently "unprofitable" is because of ASA overheads and expenses taken out of our budget over which we have no control. I don't have the actual figures in front of me, but an example I remember from a year or so ago was about $5000 a month taken out of our budget for Central training. Training??? We hadn't had a trainee for ten years!

Having done the figures, I can assure you that with the ASA overheads removed from our budget, we could pay our controllers very handsomely and still undercut the Sercos of the world. Do you honestly believe that ASA wouldn't award the contract to a group who have rated controllers already in place, ready and willing to take over? We would not have to recruit from the -stan countries, in fact we would suddenly become a very attractive place to work, financially speaking. If the insurance aspect could be worked out we could be up and running in six months.

Yes, I speak only of outstation towers, because they are the ideal candidates for such an operation. I wasn't aware of the passage of this legislation until DS mentioned it, and I haven't done any research on it to prove it's kosher, but if it is, what are we waiting for? ASA have been looking for an excuse to hive off the towers for years; well, guys, all you have to do is mention it. You know our number.

[SM4 Pirate]

Where did you get this? From what I have been advised this is not true. I read the regulation change? I may be reading it wrong, but I don't think so, my "bush lawyer" credentials are solid and recently refreshed.air traffic control means: (a) AA in its capacity as a provider of air traffic control services; or (b) the Defence Force in its capacity as a provider of air traffic control services; or (c) a person who provides an air traffic control service in cooperation with AA in accordance with paragraph 11 (3) (b) of the Air Services Act 1995 or by arrangement with AA in accordance with paragraph 11 (3) (c) of that Act. As Airservices loses money on all of the smaller towers, they should be pushing to subcontract to the lowest bidder That doesn't add up? A new 'cheap bidder' would still need ATCs; the least significant cost of ATC is wages, they are already at minimum staffing (yes you could make reductions but not substantive)... The reason ASA doen't make money at most tower locations is due to 'on costs' getting the ATC labour off the books does nothing to reduce the 'on costs'; this includes ILS maintainance, as well as corporate overheads etc. Airservices will be able to contract the tower to the lowest bidder No dick they won't; why would they remove themselves from the business of providing ATC services. They also wouldn't allow a cheap operator to take over a place like Bankstown, as that would constitute a transmission of business and the current employees would get current conditions, so where is the advantage, financial or otherwise, given the 'new company' would then also factor in a profit margin (wouldn't they?).
ASG knows it is running a tight financial ship, the new GM could not believe how tight it was when he came on board, and he came from the dept. of Finance!
ASG might just beat Serco and others for some FAA towers, they couldn't do that if their cost structures were not extremely competitive. It would also allow air traffic controllers to have greater flexibility – i.e. head off to the beach when there are no RPT services present, then come back and man the tower when required. Baaawwwwaaaahhhh! Best line ever. Is this a secret split shift policy or is a new competitive 'ATC provider' going to pay ATCs to lay on the beach at the same time as complying with it is obvious that any operator of the tower will have to comply with the CASA safety standards Dick, 15 Sitting days is a long way off, I'm affraid that gazetting doesn't mean L.A.W. It is a regulation change which can be dissallowed at any time within those 15 days, at this rate for the next 3 months.

I suspect that Mr. Ferguson and the Democrats haven't even noticed this little blip on the table yet, let alone endorsed it by 'passing it', you don't "pass" a regulation you disallow them.

[Baldricks Mum]

I'm with you Whistle Blower.

Cut out the dead wood in management and get some backup for the controllers who actually have a schmick about aviation.

BM

[R4+Z]

Binocs

Whilst you may initially be right, the situation would change with time as the founding controllers start to retire but still have ownership and expect an income. The only way it could work as described is as a co-operative. Personal opinion is that in a situation like this a co-operative could not survive for many reasons one example would be that the most highly trained would expect the biggest cut so the subject of who gets training and hence the ability to demand a bigger slice of the pie, would become a very divisive issue.

Whistle blower

Anyone remember Telecom (telstra) before Optus came along?? I do.

Yes they became more streamlined, they became more efficient, they even became more profitable. but would you want the level of customer service they now provide. Just imagine voice recognition software putting you through to the controller or service you require. "dial 1 for airways clearance". The problem is that service costs money, accept that fact and move forward instead of this constant shuffle towards the edge of the precipice.

If the service was moved to india because staff is cheaper there as with call centres everybody would be appalled. Yet here in Perth we accept that it is cheaper to run our skies from Melbourne. So where would the problem be in running these services from places like India. Dick Do you think I am on to a winner here?

[DirtyPierre]

Dick,

Contract towers to the lowest bidder.

Hmmm. The space shuttle program of NASA springs to mind. Billion dollars of air/spacecraft made of and built by the lowest bidder. Wonder how safe they are?

[Bevan666]

SM4 Pirate

You state;

The reason ASA doen't make money at most tower locations is due to 'on costs' getting the ATC labour off the books does nothing to reduce the 'on costs'; this includes ILS maintainance, as well as corporate overheads etc.

I think you will find the corporate overheads are, as Bino's states, are significant. Just look at the breakdown between the controllers and the management, and you'll see where all the money goes. With a streamlined management structure, you can achieve significant cost savings. Where is there any incentive for AsA to actually reduce overheads and save the industry money? There is none. They just need to raise prices to ensure that their mandated annual return is met.

By introducing contract towers, significant cost reductions to industry can be made, and pay and conditions to controllers, the ones actually provinding the service, can be improved. My discussions earlier this year with an ex FAA Center(sp) manager gave me the overriding impression that the contract tower principle works well can can easily be applied to Australia. There are aprox 200 VFR contract towers in the US, run by about 3 companies. These provide GAAP/Class D type services, and can be compared to the likes of Hamilton Island, Mackay, Albury etc. There is no reason they cannot contract out the operation of the GAAP towers as well.

Just look at how much the current terminal infrastructure and management cost per year (which is published by AsA). You will see for yourself how much savings can be made.

Bevan..

[Uncommon Sense]

SM4:

Is that correct about it being 15 sitting days of the Senate as opposed to 15 days after gazetting? If so, as you say , those moving to disallow will have to be made aware.

[gaunty]

SM4 is correct it is 15 sitting days, not calendar days, so depending on when the Senate is sitting, it could well be three months.

Go to the Parliament House website, go to the Senate and check out the "sitting pattern". It will explain which sitting days are counted and which are not, say senate Estimates may not be.

Or ring the Clerk of the Senate and you will get some very helpful advice. There are no secrets or tricks, it's called democracy in action.

If you want a dissallowance you will need to find a Senator who will sponsor it AND who can get the support in the house to pass it.

You can also play, with the Senators cooperation, "relays" on the 15 sitting day routine for a long time if you need time to get your act together.

[Chimbu chuckles]

How can allegedly intelligent people claim that it is possible to have true competition within something like AsA?

How can you compare the situation with price competition between companies like Harvey Norman and whomever else sells like product in the marketplace?

The only way true competition happens is multiple sellers competing for a larger share of a given market. This scenario is clearly impossible within aviation infrastructure like towers or enroute services.

What Dick is talking about is NOT competition it's MONOPOLY. One or possibly two companies will end up with all the D and GAAP towers and then set about making a profit that will need to increase over time to appease shareholders.

It's already happening at places like BK, do we really believe anything will change by changing the MONOPOLY holder from a Govt MONOPLOY to a private MONOPOLY.

This is economics 101 people!!!!

And lets all be wary of Dick's motives at this time. Does smoke and mirrors ring any bells?

Lets not drop the ball on NAS, believing the battle is won, while Dick distracts us with this latest BS :mad:

Chuck

[SM4 Pirate]

I think you will find the corporate overheads are, as Bino's states, are significant. Bevan whilst trying to pick an argument with me, stop agreeing with me....

My point is that the corporate 'on costs' are not reduced by having "Disk Cmith ATC Co." run Bankstown, the 'on costs' did not magically dissapear, the NAVAID, Frequency costs are still there, no admin staff in Canberra were reduced, in fact we probably just employed some to negotiaite with "Disk Cmith ATC Co." and enforce compliance with our operating certificate.

To be really clear, reducing the ATCs from the Airservices umbrella does nothing to the "on costs", which will still be borne by the aviation industry. This is why it won't happen there will be no, repeat no overall savings in transofrming a current business into a private operation.

Different animal if you were for example proposing that "Disk Cmith ATC Co." was going to establish a new business at say Broome for example. You could do so as a new business, reduced ATC pay and conditions, because it is new (no transmission of business) and no need to apportion existing costs (ie overheads) to the new entity; because the costs would remain where they are.