PDA

View Full Version : Modernising old air fleet much depreciated


Wirraway
26th Oct 2004, 20:59
Wed "The Australian"

Modernising old air fleet much depreciated
Steve Creedy, Aviation writer
October 27, 2004

A LEADING aviation safety body has urged the federal Government to change aircraft depreciation laws to make it easier to modernise Australia's ageing fleet.

Aviation Safety Foundation Australia chairman John Sharp said yesterday the sustainability of Australia's general aviation sector in particular was under threat from an aircraft fleet with an average age of more than 25 years.

The former transport minister called on the Howard Government to urgently help the aviation sector by working with it to establish a strategic policy aimed at securing its sustainability.

He said 86 per cent of the nation's general aviation fleet was built before 1980.He warned that operators would be forced to either park aircraft "against the fence" or cut corners unless something was done to make new aircraft more affordable.

Changing the depreciation laws was the most significant short-term action the Government could take.Mr Sharp pointed to the US which allowed aircraft to be depreciated over three years, with 50 per cent allowed in the first year.

At the very least, new aircraft should be depreciated 20 per cent per year over five years to secure a safe, secure and sustainable aviation sector, he said."The federal Government recently stepped in to stop the Australian Taxation Office from making depreciation of heavy vehicles over 15 years," he said.

"They decreed it would be over five years for sound reasons such as safety, fuel efficiency and reliability."However, in Australia today, aircraft are depreciated over 20 years and old aircraft are less safe, less reliable and less fuel-efficient."

Mr Sharp also expressed concern about the ageing of the nation's aviation workers.He said the average age of licensed aircraft maintenance engineers was now 54, and 48 for pilots."Aviation needs a government and industry program to foster the recruitment, training and retention of pilots and aircraft maintenance engineers," he said.

In other aviation news, the Ansett Flight Simulator Centre in Melbourne has been sold to private interests associated with IT entrepreneur Wayne Bos and former Boston Consulting Group executive David Gilmour.The pair plan to ramp up marketing of the centre, which employs 20 staff and operates six flight simulators, and expand the training services it offers to airlines.

They are also looking to acquire other centres globally."We travelled extensively all over the place and looked at a lot of centres around the world,"

Mr Bos said."We came to understand the business models ... thought we could probably add some value and it seems like a good, sensible acquisition from our perspective."

===========================================

huntsman
27th Oct 2004, 11:23
He said 86 per cent of the nation's general aviation fleet was built before 1980.He warned that operators would be forced to either park aircraft "against the fence" or cut corners unless something was done to make new aircraft more affordable.

Changing the depreciation laws was the most significant short-term action the Government could take.Mr Sharp pointed to the US which allowed aircraft to be depreciated over three years, with 50 per cent allowed in the first year.

At the very least, new aircraft should be depreciated 20 per cent per year over five years to secure a safe, secure and sustainable aviation sector, he said."The federal Government recently stepped in to stop the Australian Taxation Office from making depreciation of heavy vehicles over 15 years," he said.

"They decreed it would be over five years for sound reasons such as safety, fuel efficiency and reliability."However, in Australia today, aircraft are depreciated over 20 years and old aircraft are less safe, less reliable and less fuel-efficient."

something has to be done soon.
just look at the state of the GA fleet
good on ya John & Steve!

Sunfish
27th Oct 2004, 21:22
I suspect that the ATO is still smarting over AN's accounting methods and maybe other peoples tricks. I wonder if they will give Sharp a hearing?

For example what part of "maintenance" expenditure is actually expense and what part is actually capital expenditure? Accountants can argue this forever.

Rich-Fine-Green
28th Oct 2004, 02:10
A change in the depreciation rate would be one of the best ways to bring in new aircraft.

Not only would operators be more inclinded to invest in newer and safer aircraft, non-aviation people with $$ to spare would be tempted to invest and put aircraft 'on-line'.

Another advantage in the USA is that banks are a lot more mature when it comes to financing aircraft.

10-20 year terms are not unheard of in the USA.