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-   -   Big economic problems in aviation (https://www.pprune.org/australia-new-zealand-pacific/348182-big-economic-problems-aviation.html)

Dick Smith 24th Oct 2008 00:22

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?

Kangaroo Court 24th Oct 2008 01:16

Gotta agree with Dick on this summary; he's right on the money this time!

Baileys 24th Oct 2008 01:41

Completely agree Dick.

oicur12 24th Oct 2008 01:53

"Even in the United States. . . ."

"however there is no similar requirement in the United States. . ."

Do we really need to emulate the US model of ensuring that profit trumps all other facets of society. Watching the news on a daily basis, it appears to me that market forces are not as clever as we once thought.

Oldmate 24th Oct 2008 01:59

Also agree with Dick. I'm sure that Airservices only bid for the Hawaii ATC contract to help alleviate the oversupply of qualified Air Traffic Controllers here in Aus :rolleyes:

Jabawocky 24th Oct 2008 02:01

Listen to the ABC last night enroute to a private ppruners party, the share price and liquidity of ALLCO was being discussed. Some quick mental maths suggests they are in the poo big time and worth about 1.5% of what they were when the Q bid was on.

What a mess that would be today.:eek:

J:ok:

notanotherfivehourstogo 24th Oct 2008 02:06

I agree with Dick on all points. The only positive in this mess is it may clean up the industry as well! ie rid the crooks out of it and keep the honest operators going! Lets hope anyways!

Howard Hughes 24th Oct 2008 02:30

It's good to have a thread where I can agree with you Dick!:ok:

1. Agree, RFFS should be tendered.
2. Agree, there should definitely be competition for ATC services.
3. AGREE, what an absolute waste of time and money this has been. I wouldn't mind if an ASIC card carried some clout ie: No requirement for screening at airports!;)
4. Agree, Please get rid of the military controllers, they have no idea of the limitations involved with civilian aircraft, descending from 9000 feet at 5 miles, ain't good for the passengers! Also you don't need to leave us at the holding point for another civilian aircraft which hasn't even crossed the FAF on the ILS!:eek:

The one area where we can still disagree is adopting procedures 'just because it's done that way in the USA'! You say yourself in the second sentence, we should be looking for the 'World's best practice', then why not search the whole World rather than just the US, as we have been witnessing the last few weeks, the US's way of doing things isn't always the best!;)

Cheers, HH.:ok:

PS: I was under the impression the higher limit for using oxygen in the US, was to do with getting unpressurised normally aspirated aircraft over the Rockies. What is the limit in Europe/Asia? Does the saving outweigh any decrease in safety? As I recall from my time in the States, isn't there a recommended limit on time spent at that altitude?

DBTW 24th Oct 2008 03:14

Excellent points, Dick!

Let the military keep their radar though. When considering the duplicated civil/military ATC we would gain more benefit by removing most of the Restricted Areas. I have never really understood why a few military aircraft feel so threatened by the sparse civil traffic here in Australia. Know all about dynamic manoeuvring and traffic density, and neither of those are really a factor in a country this big to the extent they justify the allocation of special airspace to the military, except for the occasional bombing range, live firing area or similar. To tie up as much air space as do the Sale, Richmond, Willy, Amberly and Townsville restricted areas seems way over the top given how few aircraft ever use them. I am not even mentioning Pearce! The highest density military operation in Australia warrants FIS, RIS and RAS...not restriction. For those services we could use the military radars/controllers.

The flight safety counter claim and fear of collision is anxiety rather than reality based. The presumption that regulation reduces risk can be countered by the fact that complacency kills. All pilots should look out more. We should adopt best practice and use the scarily empty OCTA as do most European and North American countries. The truth is that in a massive country like Australia there is really not much traffic out there to avoid.

Captain Sand Dune 24th Oct 2008 03:46

Dick,


Some good points there. Unfortunately aviation in Australia appears to be one of the last of the “cargo cults”.
Don’t quite agree with lifting the limit for no supplemental oxygen to above 10,000FT AMSL though. Firstly, given the terrain (or lack of it!) in Australia I don’t think there’s a real need. Secondly, given the size of the country and therefore potentially longer flight times, the prolonged exposure to the reduced oxygen levels above 10,000FT AMSL could contribute to increased incidents of hypoxia. Have read some interesting accident reports concerning crashes in the US where this point was put forward as a contributing factor.

And then we have DBTW.
Yes, we do have restricted airspace in Australia for the exclusive use of military aircraft. How about telling the full story mate. The vast majority (in fact I reckon it’s “all”!) of these restricted areas are de-activated when they’re not needed. There’s a very good reason some military flying activity is segregated from civilian flying activity. If you’ve seen what goes on in some of them you wouldn’t want to be anywhere near it!:eek:
I am sure that if you had your way and all these areas were removed, you would be the first to squeal when you spotted (assuming you’re one of those that actually looks out!) a 4-ship of F-18’s whistling past your wingtips.:hmm:
Oh BTW, the US has plenty of restricted areas, and a whole bunch of prohibited ones as well.

av8trflying 24th Oct 2008 04:17

Sorry dick, don’t agree with everything your peddling.
What I would like is for you and all pilots to take a big pay cut right now.
Why not, it will save the industry millions if all of you come in to work for free.
In regards to your so called good aussie companies (are they really aussie?), you know the ones that own all of our airports that were sold off and make the owners squillions whilst the customer (read me) has to pay huge amounts for using them.
You say they want to tender for ARFF services. Well the only company that has managed it in Townsville has their employees on around 15k to 20k less. So thank you dick for decreasing the wages of those who need it most in these times.
You are the one who pushed for location specific pricing and got it. What happened? The prices at the big airports got smaller and the little airports (read the backbone of GA Australia, got over inflated prices of over 1000%)
Now they have averaged it out so that small businesses do not have to pay as much. This was done because of the complaints from the businesses that you talk about.
And don’t bring up New Zealand. Go have a chat to the ARFF over there. Disgruntled workers on worse pay and conditions and a fire service that has lost a lot.
So in your theory, dick, employees take it in the a@@ whilst businesses make big savings. I am sure Mr Rudd just made a big song and dance about corporate greed. Whether you agree with him or not, the world is in a pretty bad place at the moment because of just that.

scran 24th Oct 2008 04:26

and Oh My God Dick, the RAF has it's own Air Traffic Controllers (complete with own radars etc)!!!


:ugh::ugh::ugh::ugh::ugh:

Howard Hughes 24th Oct 2008 04:48


Oh BTW, the US has plenty of restricted areas, and a whole bunch of prohibited ones as well.
Yes but most of what we call 'restricted airspace' in Oz, in the US is actually an MOA and you are able to transit these without a clearance! It is prudent however to make contact while transiting!:eek:

Restricted and prohibited areas are saved for firing ranges and areas of political sensitivity, they are in general very small, not great chunks of airspace along the major East Coast trunk route!;)

Maggott17 24th Oct 2008 04:56

"...the RAF has it's own Air Traffic Controllers (complete with own radars etc)!!!"

I am sure that Dick doesn't know the difference between RAAF, RAF and ARFF, Scran.

He had better ask the Queen before privatising two of them though.

ferris 24th Oct 2008 06:41

You title the thread "big economic problems", yet dont even mention the real big costs.
eg Fuel tax. People generally pay their petrol tax because of some vague notion about paying for roads. Why does the govt tax aviation fuel to such an extent? To pay for the sky? What would be so bad about paying NO TAX on avgas? Most avgas is consumed in what amounts to essential infrastructure.
Then there are the factory outlets with runways, essential services that make profits etc etc.


Something else that has always puzzled me; who generates the changes that subsequently become "worlds best practice"? Why are some things done in the US "worlds best practice" yet other things "inefficient"? (the US mil has mil ATC, govt run ANSP etc). Who gets to be the arbiter on what things get called what?

Howabout 24th Oct 2008 07:12

Dick,

Some sympathy for some of your points.

However, who championed "user pays". I seem to remember a line that went "free in G".

As for a "duplicated" ATC system, I wasn't aware that the miliitary and civil agencies provided the same service in the same piece of airspace. Which, I am sure you will agree would represent a "duplicated system". If this is not the case, would you please let us know exactly where services are "duplicated".

Wizofoz 24th Oct 2008 08:46

In isolation, what Mr Smith says may (though not inarguably) have merit.

The problem is, as always, Dick will let no opportunity go by, be it the tragic deaths of people (and cynical conscription of their grieving relatives into ridiculous sideshows) to a global financial meltdown (caused by the greed and incompetence of free-marketeers whom he has trumpeted in the past) to push his own, narrow agenda.

Yes Aviation is in financial difficulty. Globally. Along with the entire capitalist system!!! Largely because of the kind of de-regulated thinking he has long espoused

Neither CASA nor ASA had anything to do with the sub-prime disaster and all it's ramifications. It had more to do with the kind of politics Dick wants to now introduce into the regulation of Aviation in Australia. The areas where this has happened so far have largely had a very negative outcome on Aviation in Australia. A couple of examples:-

1) The sell off of Australian Airports- All very market driven and justified in economic terms. It has opened up the kind of competition Dick holds so dear- unfortunately that has included competition from non-aviation sources of revenue meaning many airports have either been closed and re-developed or had a large part of their areas hived off for non-aviation use, and those that remain becoming increasingly costly to use. I do not know of one case of a general use airport being built greenfields by private enterprise. It is a classic case of an individuals right to gain the most from his investment robbing the wider community of a valuable piece of infrastructure. It is a government role to facilitate commerce, and as such it should be the government providing airports just as they provide roads and railways.

2)ATC and ASA. A relentless drive for productivity has led to a chronic shortage of staff and a collapse in moral. The real world consequence is TIBA. Zimbabwe still has 100% ATC coverage, Australia does not.

What then might some of the consequences be for Dicks other "Improvements"?

Well, lets start with RFF and Towers, and opening them up to competition. First up, will it be cheaper? Well, perhaps. Lets look at something like the free market US health system as opposed to Medicare. Cheaper, right? NOPE!!! Hideously expensive to point where 40% of Americans do not have affordable health care. Have other examples of governments ceding infrastructure to private enterprise resulted in cheaper, more efficient service? Been on a Sydney tole way recently??:?????

The other point is that these are ESSENTIAL services. You cannot set up an RFF service or a tower operation over night. So what happens next time there is a financial glitch thanks to our free-market gurus and Sams Rent-a-fiery, or Rent-a-mouth INC finds that it is over exposed to the stock market, or put next weeks pay-role into Lehman brothers, and goes broke? The financial impact of one of our major airports not being able to operate for one day would negate the savings made for decades. Think it can't happen? the name ANSETT mean anything to you??

But the major point is that it is simply not worth it. As Dick says, 100M has been spent on a fruitless reform process, largely initiated by him and his co-horts. Could we have that back please Dick? And for what? Dick, give an honest estimate as to how much regulatory costs, as a percentage, contribute to the expenses of an Aviation business. My estimate would be 5-10%, less impact than a $10 spike in a barrel of oil. So lets have a huge win and reduce those costs by 25%- now instead of 5-10% it's down to 4-8%.Cool. But at what cost? If it's ANOTHER 100M, and means exposing vital infrastructure to the vagaries of the market, it's not worth it.

If nothing else, this should teach you no to post after I'm just back from an all-nighter from Shanghai!!!!

Capt Wally 24th Oct 2008 08:47

Well put together there Dick. Of course all that you wrote is just your personal opinions as is everyone elses in here. The trouble is what is actually right & wrong with the way we run aviation in this country? Again any asnwer is just personal opinons. Worlds best practice? Why can't we (Aus) be worlds best practice? I wouldn't look to the states for advice, they can hardly manage their own economy never lone aviation as a stand alone industry.
Safety the root basis for all costs outside of DOC's comes under the heading of 'afforable safety', where do we draw the line in the sand with that one? That line moves with progress & progress isn't always for the best.
'ferris' that's a good point why do we need to pay fuel tax on avgas etc?
Because ALL taxes end up in the melting pot to be used as the Govt of the day sees fit, aviation fuel tax is a real gravy train for the Govt.

Still overall I agree that this country is in a fair bit of trouble as is the worlds economics but the degree of it's severity is based upon how well the humans of this planet know of it in the first place. That can only come from the media, now there in lies a real can of worms!



CW

Katoom 24th Oct 2008 09:00


I wonder if the changes will be made when it is too late and the industry is basically destroyed?
Unfortunatley, yes. I've seen the effect of 3 recessions now, and the ability of the aviation industry to weather the current one is no better than it was in the 1980's. It will, as is currently happening in the credit market, take a severe crisis to initiate funamental change.

The alternative is to keep patching and hoping for the best, something that's been going on in aviation for a long time now.

NOtimTAMs 24th Oct 2008 10:56

Just going to pick on the oxygen thing.

Human performance decreases with decreased oxygen in the the blood - a pO2 of <90% produces measurable decreases in performance similar to intoxication or fatigue. Most non-smokers without lung disease are at this level at 10,000'. Smokers and those with lung disease are at worse levels and the effects are cumulative with fatigue etc.

The effects of hypoxia are felt on night vision at even lower altitudes.

The reason the USA have the 12,000 limit to allow non-pressurised aircraft get over the highest parts ofthe Rockies, ans was intended only to be used for the period of time required for terrain clearance. I believe there was considerable pressure from AOPA USA (correct me if I'm wrong) on this "relaxed" level, but there is not good medical reasoning behind it.

STC'ed portable oxygen sets are not expensive and will save themselves in fuel costs fairly quickly and small pulse oximeters are available for ~ $400. I regularly fly in the flight levels SE IFR on portable O2 and find it comfortable and covenient. BTW pax don't need to share in it <FL140!

I agree with much of the rest of Dick's posting and addiotionally mourn the decrease in access to airports for GA as a result of privatisation of what is essential transport infrastructure.

Zhaadum 24th Oct 2008 11:20

Dick,

Give me all your millions of dollars. I will promise to spend it all and kick start MY economy at least. :)

Honest.

wessex19 24th Oct 2008 11:27

at least there is consistency in GA. The last 2 recessions and now this (potential) one have had the same aircraft around. PA31's C206/210 and Metros. same aircraft will still be flying here in GA in the next recession I think!!!

james michael 24th Oct 2008 20:53

GA can be also assessed by the number of pilots.

I have graphed licences back to 1996.

The general trend is down, down, down - although ATPL rises slightly (thus the rest drop even faster).

But, lo - add in RA Aus and the trend is effectively flat - no change.

Therefore part of the matter is a market shift due to emergence of RA Aus.

But then, have a think about the loss of the RPT duopoly and the arrival of the cheap carriers and SY-ML for $90 or less. How far does one get in even a GA single for $90?

GA also - being on the private side 'discretionary' income always suffers in a recession (lagging by a year or two due to those committed to finishing their licence).

Someone said earlier this is all about differing opinions - the statistics give me the opinion that GA as we know it would always have declined due to the changing market forces. Add in the lack of incentive to purchase new aircraft in the over-regulated environment and decline is guaranteed.

Open up competition in RFFS etc - worked well in banking and telecommunications didn't it - much better service and pricing these days :rolleyes:

DBTW 24th Oct 2008 21:32

Captain Sand Dune, please don't tar me with your misguided high levels of anxiety. Despite our massive continent Australia is airspace poor because we are regulation rich. Loosen up the airspace and things will flow much better. It seems to me all Dick is trying to say is that we could do more to make it easier to fly.

Through extensive personal experience, I am intimately aware with what goes on in our military restricted areas and have an in depth understanding of how other more crowded countries manage airspace more efficiently.

Maybe you need to get out more? It's not all about RPT, airways and air traffic control...

BTW, I would whoop with joy if I were allowed to be put in a position to see a 4 ship of F18s whistle past my wing, although I am also savvy enough to know I probably wouldn't see all 4 if they were flying a proper tactical formation. My occasional callsign means F111s sometimes do whistle past the wing. It's awlays good to see my tax money being well spent. I certainly blew enough of it off during my service years...

On oxygen, it's not just America and the Rockies. Pretty well everywhere other than Australia allows flight up to 12,500 feet without oxy. The "but we don't have to because our terrain is flat" argument misses the reduced cost benefit point being made. For simple flight above 10K the resulting hypoxic symptoms are easily manageable. Let's face it, some people live their entire lives up mountains above 10K without oxygen enhancement. All most GA folk will be doing is just sitting there. Those with anxiety about it probably shouldn't fly because a high proportion of glider types are out there in thermals every summer week end, and you can be sure not all of them have taken oxy along.

james michael 24th Oct 2008 21:45

One More

Try the thread "CASA Integrity" for a clue why Dick is pushing base joins - the one thing missing from that thread is who (other than Dick) supports the value of the procedure ;)

DBTW

You forgot to mention that the DEF radar may not always be to a standard suitable for RPT separation (ESL an example at present over parts of Bass Strait I believe).

maralinga 25th Oct 2008 07:52

In response to WizofAUS

In isolation Dick does have merit in this instance.

The problem is that people, like you, will not let an opprotunity go by to play the man rather than the ball.

Sorry to burst your bubble, but perhaps, some real research should be conducted into the cause of the economic downtown rather than repeating verbatim what you hear on BBC world.

IT IS GOVERNMENT INTERFERENCE IN THE MARKETS THAT CAUSED THIS! not deregulated thinking .When Jimmy Carter (Thats right! nothing to do with Reagan) made it illegal for banks to discriminate when lending on the basis of a persons ability to repay a loan. Yep, give money to pepole who cant afford it, way to go socialists. Why do you think Freddie Mac and Fannie May were set up? Do some research.

Correct, CASA and ASA did not have anything to do with the current financial disaster. However, government regulation directly distorts the finanacial viability of any industry.The current global economic situation is a perfect example of this, again, do some research.

And why has government divestment in certain areas had a negative impact?

Simple, lack of competition. The industry costs are so high that is not competitive with other modes of transport. It discourages entrants into the market. Australia should be a world leader in aviation rather than a backwater.

Further,

1. The sell off of Australian Airports was the extension of a policy from the 1950's in which the government had already determined that it could not afford to directly maintain the infrastructure. If the community considered this piece of infrastructure so vital, do you really think that these airfields would be under threat? Perhaps a bit of proactivity, such as the efforts to save Essendon Airport ,would highlight the value.

2. ATC and ASA. Again, if you had privatised class D towers, would this free up directly employed ASA staff for other areas? Would this allow controllers who exited the industry to re enter on their terms?

Perhaps an industry group, other than the Civil Air, that can assist in bringing to bear long term pressure might actually effect some change, with respect to ATC. Hang on, thats right, the pilot group is too fickle to unite in anything other than a whinge session in the crew room.

How does the US health care system, Ansett or any other of those poor arguments relate to the RFF? Answer, it doesnt. Straw man argument.

"But the major point is" that reform is not only necessary but pivotal in the survival of the Australian aviation industry. Whether you agree with Dick or not, the reform process stalled after he left, so perhaps you should ensure the accuracy of you remarks.

"If nothing else" your post highlights the vailidity of an effective flight and duty schedule.

I dont always agree with Dick, but it dissapointing to see ill informed and inaccurate drivel served up everytime he makes a comment.

max1 25th Oct 2008 08:23

You might want to research ASAs foray into operating Class D towers in the States.

Rumour has it that they forgot to factor in a % locality allowance for the controllers, and are actually making a loss on the deal. Might be worth asking a question.

In none of the Annual Reports to I see the usual crowing about the money they are making on this deal, in fact the lack of self congratulation leads me to believe the rumours.

SIUYA 25th Oct 2008 08:57


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?
Spot-on Dick about "Yes Minister"! :D

And the ward of the particular hospital that we presently seem to be stuck in is the psychiatric one...............where the loonies are well-and-truly in charge! :ugh::ugh:

Wizofoz 25th Oct 2008 11:14


Sorry to burst your bubble, but perhaps, some real research should be conducted into the cause of the economic downtown rather than repeating verbatim what you hear on BBC world.
Maralinga, perhaps you shouldn't quote personal opinion and right-wing conspiracy theories as fact:-


Urban myths are always so larded with nonsense that deconstructing them is a multi-stage endeavor. Let's begin with the truth about the CRA: When it was enacted, many banks were restricting their lending to creditors without risk. That's like a health insurance company only insuring people who never get sick. It's a great way to make a profit but it's no way to grow an economy. The CRA pushed banks to expand the envelope of their lending but never beyond an actuarially justifiable risk. True, it represented an intrusion into the market which a conservative might understandably decry, but the notion that it put a gun to the heads of banks and told them to pull the trigger is ridiculous.

To give credibility to this story you have to believe that for 31 years American lenders have diligently and without protest been on a government mandated death march. They knuckled under and did what they were told even through 12 years of Reagan-Bush, 12 years of a Republican-controlled Congress and eight years of Bush 2. They just kept on handing out money to deadbeats until they ran out. They never lobbied, never complained.

Source:- John Moore


CRA loans have actually managed to turn a consistent profit:
http://www.traigerlaw.com/.../traige...udy_1-7-08.pdf
And banks participating in CRA had a higher capital requirement, as legislated by the act, than banks that did not participate.
Additionally, Fannie and Freddie's involvement in subprime loans occurred due to the Federal Housing Enterprises Financial Safety and Soundness Act - completely outside the purview of the CRA:
So get YOUR facts straight!!

Trying to blame an administration from 33 years ago for the present debacle is pulling a very long bow. The US has had Republican white houses for 20 out of the last 28 years, so blaming the liberals is clutching at straws.

As to Dick, the simple fact is that ANY excuse, be it a crash, a near miss or a totally unrelated financial crisis is an excuse for him to bleat on about his own, largely discredited agenda.

The US health system is an example of how an essential service can be denied to many people who need it, even in an affluent country, when it is largely left to market forces with insufficient government investment in infrastructure and regulation, just as is happening to air services to remote communities. Ansett was an example of how a large commercial enterprise could close overnight, as could a commercially run RFF or ATC service. This was clear in my first post, so it's you doing the straw man here.

Maggott17 25th Oct 2008 11:24

I think you need to get the message Dick.

Get as far away from professional aviation with your Private views as the FARthest CUmulus, Dick.

In other words, get your hand off it, Dick.

Your days as being a HANDS ON Dick are past you.

Let the professionals HANDLE it now Dick.

Just LET GO of it Dick.

You will feel much better after you LIMP away from it, Dick.:{

maralinga 25th Oct 2008 11:40

Wiz

"It is revealing, therefore, to re-read an article from the conservative City Journal in 2000 predicting problems for the banking sector from the Clinton administration's resurrection of Jimmy Carter's 1977 Community Reinvestment Act, which appears to have been the major single factor in the origins of American high-risk sub-prime loans. Under Bill Clinton: banks were required to provide loans on an affirmative action basis to poor inner-urban ghettoes; the scheme's intentions were to help low-income earners buy homes and revive decaying neighbourhoods; much of the money was funnelled through a nationwide network of left-wing community activist groups; government regulators were appointed to measure banks' performance and ensure they reversed their previous racially discriminatory policies of declining to lend money to high-risk clients; by 2000, banks had committed nearly $1 trillion for loans to low-income ethnic and inner-urban groups; at the time, the chairman of the US Senate banking committee, Republican senator Phil Gramm, denounced the program as a vast extortion scheme against the nation's banks. "

Source, The Australian 30/09/08


Guess we will have to agree to disagree

Black Stain 25th Oct 2008 12:49

Silence the Anti-Christ Please
 
Dick Smith is The General Aviation Anti-Christ, whom at every economic slump preys on the fear of the dumb to twist arms of government. I cannot remember any good lessons from Australian GA, it's an abomination, just let it die, quicker is better.

1. Expand all controlled airspace to include all appropriate DME Arrivals.

2. Delete all Class E airspace.

3. Cancel all 30m Runway Approvals for RPT jets. If the local council wants a jet service, build a decent runway first. How can India and Indonesia present a respectable commercial airports when Australia cannot? Ballina for an OZ example? What a joke! The reason is Indonesia and India do not have Dicks from GA and local coucils pulling strings and pushing empty barrows.

4. Cancel all pavement concessions for the above reasons. The user should pay right Dick? Make the users build an airport before professional pilots are rostered to transport the stupid bastards on holidays.

But first of all, please prohibit the sale of AVGAS within 50nm of any Australian city. Australia has room for GA, way out-back! You have the money, please just take your propellors and AVGAS away from 99% of air travelling Australians.

And please remain silent in the future Dick Smith, allow professional aviators decide what is best for commercial aviation. You are The professional aviation joke.

Black Stain

mostlytossas 25th Oct 2008 14:52

Yeah let the professionals run the show. Just like the professional finaciers and bankers have run the economy into the ground these past few years. Also while your at it get those professional APF leaders back that got you all to resign on mass a decade ago. That was real smart and professional that was, even the grave diggers union wouldn't be so stupid.:ugh:

Wizofoz 25th Oct 2008 16:25

Mara,

Happy to do so, and to post in a less combative tone!!

The "Jimmy and Bill Did it" theory just doesn't stack up. CRA loans were, on the whole, very successful, and less than one in four of the current subprime default loans came from banks who subscribed to CRA (and even fewer of those were ACTUAL CRA loans). Perhaps do some general research on stats and facts, not just opinions of people with similar political views.

The free marketeers managed to manufacture this mess all by themselves (and most are now admitting as much) largely because the money they could make in the good times meant they could walk away very rich men when it all fell apart. It wasn't true capitalism, it was fraud on a huge scale.

More regulation could have ensured that TRUE capitalism (the market doing what's best for the market) triumphed over CORPORATISM (the market doing what enriches those RUNNING the market).

I'm a centrist, not a socialist. Socialism doesn't work because it runs against human nature. Unchecked capitalism doesn't work because it runs WITH human nature all too well!!

james michael 25th Oct 2008 20:46

Blacky

A delightful coat-tug; knowing you know that removing GA 50 Nm from the cities would mean an ultimate drought of CPL/ATPL - one merely watches to see who will take your bait ;)

Mara & Wiz

In a way you touch on a point of interest. If one notes the failure trend of the USA car industry to the Japanese, manufacturing industry to the Chinese, the banking industry to greed, and so on - their leadership of "world's best practice" is questionable. The parallel is that their NAS is an amalgam of different issues to Australia - constitutional rights, massive economies of scale due a much higher population/pilot versus area ratio, radar coverage, and so on. I find it difficult to believe we must blindly follow the USA NAS out here.

Perhaps, however, this should be called the "Post Mortem" thread. None of the issues Dick raises are new - where was everyone when they occurred?

Captain Nomad 26th Oct 2008 00:44

Maybe it is too simplistic a view but I always get somewhat suspicous when previously government owned ESSENTIAL services get privatised. Privatisation means that the service has to be, or become, financially viable (read make someone money) otherwise no private investor would be interested. The simple fact is that it is not always possible for ESSENTIAL services, especially in REMOTE AREAS to be a profitable business!

Thank God we still have some Government money being spent to subsidise medical services and even air services and many other services especially in remote areas.

What do we pay taxes for people?!! If the Government can't use our taxes to equitably provide services then why do we bother at all? Take toll roads and the aversion that people rightly have developed to private companies milking their little investment for all that they possibly can for a service that should be provided out of the Government budget. Where does it end? Soon you will be paying the coppers to come out and visit your house after a robbery from some thieving kid who will yell "I know my rights and you can't touch me!" Where does it end?! :*

Can anyone really honestly say that we are nationally 'better off' with airports being in private hands? What about costs? Is aviation any cheaper these days because of privatisation? It seems to be a slippery road though. Now that it has started one wonders if it will ever end...

Howard Hughes 26th Oct 2008 01:37


Black Stain

Join Date: Mar 2007
Location: Gulf
Posts: 151
One hopes that is the Gulf of Carpentaria...;)

What about those of us who have propellors but don't use Avgas?:rolleyes:

Chimbu chuckles 26th Oct 2008 02:16

Privatisation of natural monopolies is always a disaster from the point of view of the users of that natural monopoly. Entities become more efficient ONLY when there is real competition and that can never exist in a natural monopoly. It barely exists in the private sector. Real competition, despite the corporate rhetoric, is anathema to the corporate world hence we see the M&A mania of the last years as bigger companies buy out smaller companies to increase 'market share'. 60 years ago, as an example, there were hundreds of oil companies today there are, in effect, only 4 or 5.

The reason privatisation has become such a mantra among the disingenuous idiots that run our country is because they have allowed, indeed enabled, the Public Service get so large that it takes most of our taxes to run it and provide for their incredibly generous perks. An example is public service defined benefit super schemes...a system that was judged too expensive for the private sector 30 years ago. Our taxes go increasingly to keep the political class in the lifestyle they have become accustomed to...to feed their sense of entitlement.

Dick you're part of the problem not the solution...I wish you would go away.

Take it to its logical conclusion...Mac bank owning and running all the essential infrastructure...airports, harbours, roads, rail, water, power generation..and make no mistake that is Mac Bank's fantasy.

Like This - Do That 26th Oct 2008 04:03


Originally Posted by Chimbu chuckles
An example is public service defined benefit super schemes...a system that was judged too expensive for the private sector 30 years ago.

Actually Chuckles, most public service defined benefit schemes closed their doors to new entrants in the early 1990s, eg DFRDB => MSBS for the ADF.....

But the thrust of your post I agree with. Vale Hoxton .... cheerio GA in Canberra .... heavens above, we live in a country with the crappiest roads, the least rail, great distances, GA should be thriving here.

And Black Stain, that includes people using their own aircraft to go from place to place, without having to rely on airline timetables and Jetstar 'choice' :yuk: How can you possibly object to someone flying their own 182 from Camden to Port Macquarie, for example? What are they supposed to put in their aircraft's tanks? Vodka? Ya clown.

porch monkey 26th Oct 2008 04:43

It's called S A R C A S M, for those without the humour faculty......


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