Go Back  PPRuNe Forums > Dunnunda, Godzone and the Pacific
Reload this Page >

Dick Smith's $19,305 article - FYI

Wikiposts
Search
Dunnunda, Godzone and the Pacific An independent family of forums covering all aspects of the Australian/NZ aviation scene.

Dick Smith's $19,305 article - FYI

 
Thread Tools
 
Search this Thread
 
Old 24th Sep 2001, 20:03
  #1 (permalink)  
Thread Starter
 
Join Date: Jan 2000
Location: Melbourne
Posts: 115
Likes: 0
Received 0 Likes on 0 Posts
Post Dick Smith's $19,305 article - FYI

Interesting article...reproduced from crikey.com

oooOOOooo

Aviation reform could have saved Ansett
by Dick Smith
Former CASA Chairman


Dick Smith is a media, multi-millionaire entrepreneur and a former chairman of the Civil Aviation and Safety Authority but the mainstream media appear to have shut down on him so he paid $19,305 to have this article published in the Fin Review last week.

Ansett has gone belly-up with shortfalls of something like $1 billion. Believe it or not, that is the figure the airline's management could have saved over the past decade by supporting reforms of the Australian aviation industry.

The same applies to Qantas. Two hundred million dollars a year - a total of two billion dollars over the decade - has gone begging.

Instead of enthusiastically adopting reform, the managements of Ansett and Qantas chose to raise fares and slug the public. They had a complete lack of understanding about the need for reform. I had meetings with the most senior managers of the airlines and explained that if the highly unionised, very expensive air traffic control and regulatory systems Australia has had in place since the 1940s remained, they simply would not have a business in the future.

No one could grasp this.

In 1989 Prime Minister Bob Hawke asked me to chair the Civil Aviation Authority which controlled both the air traffic control system and safety regulation. The pilots' dispute had managed to achieve reforms and efficiencies in staffing and scheduling of flights, and the totally Canberra based monopolistic bureaucracy of air traffic control and safety services were next.

Bob Hawke said, "We realise there are huge inefficiencies. It will be your job to fix them and you will have government support."

During the next two years we managed to bring in substantial reforms with over $100 million per annum saved, and even though I had strong support from the then minister, Bob Collins, I was amazed to find that the major beneficiaries - Qantas and Ansett - were either completely neutral or negative about the reforms.

They simply appeared to have no understanding of the need to reduce unnecessary costs when it came to running a business.

You would think they would be ringing me as CASA chairman complaining that costs were too high. They never did. When I phoned to tell them how I wanted to save them money, the most senior managers would come and take notes, sound suitably horrified at the obvious waste, then go off and do nothing.

Their philosophy wasn't "How can we reduce costs?" It was always "How can we reduce competition?"

A major reform process was set up to start early in the 90s and when I finished my term as chairman I naively thought that these would go ahead. I was wrong. The reforms, which were just as important as the waterfront reforms, were stopped and the high costs remained.

When I was appointed chairman of the Civil Aviation Safety Authority in December 1997, the old CAA had been split into two organisations - Airservices Australia (the air traffic control service provider) and CASA (the safety regulator.) I set to work to continue the reform program with the strong support of Mark Vaile, the Minister for Transport at the time.

This time I failed spectacularly. Virtually every bit of reform we moved towards was stymied one way or another. I expected the unions to resist as there is a grossly inefficient system in aviation, where air traffic control and fire fighting services are run as a monopoly from Canberra.

For example, the current fire fighting service charge for a single BAe 146 aircraft to land at Karratha, WA, is $531.58. The charge for the same aircraft to land at Queenstown in New Zealand, where the fire fighting service is open to competition and locally run, is $18.50.

A Qantas Dash-8 landing at Coffs Harbour is charged $105.98 plus an additional expensive fuel tax for the control tower alone, but this tower does not meet any safety need and should not exist under CASA regulations.

Why did I fail this time? Extraordinarily, the main reason was once again the complete lack of understanding by airline management of Qantas and Ansett of the need for reform. They had ingrained in them the laziness of decades of a regulated environment - where costs went up, they just raised fares to cover them.

When they were deregulated they acted as if they were still a regulated and cosy duopoly. When Compass challenged them, they crushed the competition without a moment's thought of getting their own costs down to competitive levels. In a similar vein, when Ansett found that it could not compete with Virgin Blue, rather than lower costs it simply offered Richard Branson an alleged $250 million for the airline.

The present government has a policy of introducing local ownership and competition for air traffic control and fire fighting systems. But the regulations allowing this, which were to be completed by June 2000, have disappeared into the office of the Transport Minister, John Anderson. Why would he want to push this difficult reform when there is no support from the airlines?

By using world's best practice air traffic control systems, I believe we could save between $100 million and $200 million a year. If competition were allowed and fire fighting services were run by local airport owners - normally the local council - savings of more than $20 million per year could be achieved.

The CASA budget has doubled from $50 million to $100 million in recent years, paid not by taxpayers but by an extra fuel tax on airlines. More extraordinary is the fact that towers at airports like Bankstown, which have no airline services at all, are now subsidised by an additional tax on jet fuel which is paid by Qantas and Ansett. Every time a private aircraft lands at a general aviation airport such as Bankstown, about 30% of the landing fee is subsidised by the airlines! The total annual subsidy per annum from Qantas and Ansett would be over $8 million.

We could save up to $200 million a year, the great bulk of which would appear on the bottom lines of the airlines. But their managements are so incompetent they haven't even noticed the cost increases, let alone object to them.

My success in life has only been achieved because I have normally been able to surround myself with people who share my vision, goals and strategies. When it came to aviation reform, those who were to benefit the most simply had no grasp of the need for reform.

Now I am out of the industry, I have been visited in the past year by senior management from Qantas and Ansett to talk about cost reductions through regulatory reform. After the meetings they go away allegedly inspired. But nothing changes. Absolutely nothing.

I think all they have wanted to do is to go back to the old days of a comfortable two-airline policy. Now, we only have one major airline and I believe if the Qantas management continues down the same path of not focusing on costs, this airline will follow the same fate as Ansett - as additional lean and mean carriers arrive from overseas and pick off the profitable low cost routes just as Richard Branson has done.

Many blame the Kiwis for the problems with Ansett, but it should be noted that Gary Toomey was until 12 months ago, the Chief Financial Officer and Deputy Chief Executive of Qantas and he learned his aviation management skills with that airline.

Recently, the Government announced that if Air New Zealand failed to pay the $400 million of entitlements, a ticket levy of about $10 would be placed on the airlines to cover the cost. My calculations show that Qantas could pay up to $360 million of this levy. It is telling that rather than object to this impost, the comment from the Chief Executive of Qantas, Mr Geoff Dixon was "I believe the Australian Government and New Zealand Government has done an outstanding job in trying to save Ansett." No doubt Mr Dixon believes Qantas will be well recompensed for this political support, even if passengers suffer with higher fares.

I am criticised by aviation journalists because I concentrate on the need for aviation regulatory reform for our airlines to be viable. However if Australian airline management do not push for reform to reduce costs, surely this is indicative of their chance of future success in a competitive global environment.

Air Traffic Control charges paid by a Boeing 767 at Australian and New Zealand Airports:

Coolangatta $1,422.49
Canberra $1,353.64
Cairns $1,245.66
Brisbane $760.54
Sydney $701.08
Christchurch $445.26
Auckland $425.49

Why I have paid $19,305 to run this article

By Dick Smith

As Chairman of CASA in October 1998 I was instrumental in the introduction of major airspace reform. This was called the Class G demonstration. It was as important as waterfront reform - and as hard. I was attacked mercilessly by the press for this, particularly by Fairfax journalists and the ABC 7.30 Report.

The campaign against the reforms was successful and I was forced to resign. In those days I received the most extraordinary amount of press coverage, albeit it was critical and much of it was dishonest and inaccurate.

Since the Ansett collapse I have worked ceaselessly to draw the attention of the media to the link between the failure of aviation reform and the failure of Ansett. Amazingly, I have not received one word of coverage on this issue in the print media. I originally prepared the facing article to run as an opinion piece in the Daily Telegraph. After I thought there was an understanding to have it published, it did not appear and this important side of the whole sorry saga has not been published until now.

The fact that the journalists have sent me to Coventry on this issue is a reflection on their professionalism. This is a free country and it is important that all views are allowed to be propagated fairly.
Turbine is offline  
Old 25th Sep 2001, 02:47
  #2 (permalink)  
 
Join Date: Nov 2000
Location: Australia
Posts: 31
Likes: 0
Received 0 Likes on 0 Posts
Post

Nobody likes me, everybody hates me might as well go and eat worms.........
turnleftnow is offline  
Old 25th Sep 2001, 03:51
  #3 (permalink)  

Don Quixote Impersonator
 
Join Date: Jul 1999
Location: Australia
Age: 77
Posts: 3,403
Likes: 0
Received 0 Likes on 0 Posts
fish

Turbine
Thanks for that, I'd have missed it otherwise.

Geeez.....he just doesn't get it, does he.

Now, if we all save our pennies we could pay for an article which puts the other side.
"Little Dickie goes to Canberra...twice and fails because every body else is stupid".

Nah... bad idea, it would only fuel his ego further.
gaunty is offline  
Old 25th Sep 2001, 04:07
  #4 (permalink)  
 
Join Date: Oct 2000
Location: Think of a happy place. Think of a happy place. Think of a happy place
Posts: 279
Likes: 0
Received 0 Likes on 0 Posts
Unhappy

I, I, I, Me, Me, Me. Look how good I should have been.

Stop trying to destroy aviation in Australia with your rubbish.

You are a bully.

************************
Cranky TBT
Time Bomb Ted is offline  
Old 25th Sep 2001, 06:23
  #5 (permalink)  
 
Join Date: Jan 2001
Location: Melbourne, Vic, AUS
Posts: 4
Likes: 0
Received 0 Likes on 0 Posts
Red face

turnleftnow, gaunty, time bomb ted:

The way you shoot the messenger (Dick Smith) suggests that the message itself is spot on.

Why don't you dispute the facts if they are indeed wrong? On the other hand, if the examples of outrageous ATC and firefighting costs Dick has listed are correct, then it's high time the whole Aussie air transport industry got a massive kick in its @ss.
Guide Michelin is offline  
Old 25th Sep 2001, 08:45
  #6 (permalink)  
 
Join Date: Jul 2001
Location: Asia
Posts: 40
Likes: 0
Received 0 Likes on 0 Posts
Post

I'm definitely in two minds about Dick Smith. I left the Australian Aviation scene in 1995, before the Dick Smith train well and truly came off the tracks, and have seen the vitriol, disbelief and frustration directed towards him both on PPrune and in the general media.

I met him a few times back in the old days and saw him as quite sincere with his desire to change things for the better. Maybe in hindsight he was the wrong man for the job and his ideas were a little difficult for the industry to agree too.

However, this letter in the Fin Review does make a lot of sense, if indeed the figures are true. I don't find it hard for a moment to believe that the two majors of the day were more intent on killimg competition.

Maybe it's time for Dickie to be involved in the debate again. I think his days at the centre of the debate are over, but maybe he has just one or two ideas that might allow us to move on.

What do you think?
Balthazar is offline  
Old 25th Sep 2001, 09:03
  #7 (permalink)  
 
Join Date: Aug 2000
Location: The Restaurant at the End of the Universe
Posts: 167
Likes: 0
Received 0 Likes on 0 Posts
Angry

I think whats done is done. There's no point in living in the past and saying what could of been. It's about time Mr Smith just got over it, stopped saying "what if" and concentrated on his food products.

Ansett is not the first aviation company to collapse and it won't be the last !!
Capt EFIS is offline  
Old 25th Sep 2001, 09:54
  #8 (permalink)  
 
Join Date: Jan 2000
Location: Darwin,NT,Australia
Posts: 51
Likes: 0
Received 0 Likes on 0 Posts
Exclamation

That this clown has to pay now for an audience should be indicative of the regard in which he is held, even by the general media. The Messiah in his own mind.
SniperPilot is offline  
Old 25th Sep 2001, 10:13
  #9 (permalink)  
 
Join Date: Jun 2001
Location: uppercumbuktawest
Posts: 126
Likes: 0
Received 0 Likes on 0 Posts
Post

The "reforms" proposed by Mr Smith were self serving and dangerous - this is why he was hounded.

The proposal to remove directed traffic for IFR aircraft is G airspace was foolish and fraught with danger.

the near misses in the demonstration airspace clearly demonstrated this.

Dick, - please do all of us a favour and if you have nothing constructive to contribute keep quiet

Cause we have all had a gutful!
Capn Laptop is offline  
Old 25th Sep 2001, 11:56
  #10 (permalink)  
 
Join Date: Jan 1999
Location: Abeam Alice Springs
Posts: 1,109
Likes: 0
Received 0 Likes on 0 Posts
Post

I'm sorry to say that even if we don't like it I believe that Dick is right in many cases. It is just that many of us in aviation dont want any change and are prepared to pay for the status quo.

There have been a number of examples over the past years where knowing how some of his ideas are taken, they have been put forward by others and have taken off. It is really sad when there are obviously many of us that won't entertain anything that comes from Dick even if it is a good idea.

Give the idea so someone else and in the examples that I have seen it gets a fair run.

Something wrong with that approach I say!
triadic is offline  
Old 25th Sep 2001, 12:18
  #11 (permalink)  

PPRuNe Handmaiden
 
Join Date: Feb 1997
Location: Duit On Mon Dei
Posts: 4,670
Received 40 Likes on 22 Posts
Cool

Oi Dick, I have been in Coventry for the last 6 months. Didn't see you there?
redsnail is offline  
Old 25th Sep 2001, 15:10
  #12 (permalink)  
 
Join Date: Sep 2001
Location: Australia
Posts: 97
Likes: 0
Received 0 Likes on 0 Posts
Angry

Its interesting to note that the electronic dick keeps bringing up Karratha's fire fighting charges. These high charges are a direct result of HIS policies when he was chairman. He told us all that we must live in a user pays environment. So in isolated places like Karratha, Alice Springs etc, charges are high. Being now in a user pays environment the fire station cannot borrow personel from other stations. If Airlines change their schedule and have a late arrival or early departure, the station has to fund the extra hours internaly, this usually means hireing a new employee which drives up the charge at that airport. In the old days, they could borrow a fire fighter from another station that had a spare. Not any more.

Also the dick keeps on about the dispute in 89. The only productivity increase was by the reemployed pilots but at great expence. 2 years after the dispute the pilots at all airlines had increased productivity by about 20%, but the cost of the pilots employed was 45% greater than not having the dispute and paying all pilots the 29.97% increase that was asked for. They may have been more productive but the cost to the companies was 45% greater, to my mind that equates to a 45% productivity decrease!!!!

He now says that QF will go the same way, even if we do not bring ANZ into the argument AN has been a basket case for years because of their fleet, (not being old, but so many different types) and the doubling up of management!!

QF has 1 management and the following types: (correct me if I am wrong)
B747 classic
B747-400
B767
B737

All other types are by other operators at a contracted price. ie, nothing to do with QF, they sink or swim on their own.

AN at time of failure had 5 management structures: 6 if you include Flight West.
An
Kendalls
Hazeltons
Skywest
Aeropelican
(Flight West)
History has shown that the argument of them all being different companies does not wash. they all sank at the same time for the same reason!!!! The regionals did not bring down AN, most where loosing money but not to the same scale as AN.

Types that AN had:
B747 Classic
B767
B737
A320
Bae 146
SAAB 340
M23
CRJ
F50
(F28)
(F100)
(E120)
(J42)
any others??

The spares that had to be carried alone would have been horendous, then the extra training costs.

Next, airspace and other reform is currently underway which will bring savings to industry. As for the big 2 not regarding the cost of airspace, they have been the driving force in the last 2 years of the Lamp project because they do not want to subsidise the industry. Just because the dick was not consulted and has been left out is sour grapes and he has been working behind the scenes trying to stop the process because it is not the same as his failed dangerous (BASI's words) "G demostration"

I do not beleive he electronic dicks arguments carry any weight.

Thats the rational argument, now for the irrational.

dick, you are a "dick head", go be the proffessional adventurer that you are and leave the mundane to those who have the safety of the travelling public inj mind above big noting themselves above all else. It takes longer than the 3 minute attention span that you have to get this far and to do whats best for aviation!!!!

Sui Generis
Niles
Niles Crane is offline  
Old 25th Sep 2001, 15:54
  #13 (permalink)  

Just Binos
 
Join Date: Oct 2000
Location: Mackay, Australia
Age: 71
Posts: 1,397
Likes: 0
Received 0 Likes on 0 Posts
Thumbs down

Amazingly, I have not received one word of coverage on this issue in the print media.
What most people in the aviation industry find amazing is that Dick finds it amazing that nobody wants to listen to him. This is an ego utterly out of control.

What we are talking about here is a man who complained bitterly in the 70's about not having unrestricted access with his helicopter to his harbourside mansion's heliport. For this (under the Squeaky wheel principle) he was rewarded by a cowardly government with a position in charge of the nation's regulatory body, now no longer a pathetically inefficient government department, but a lean and mean GBE called the Civil Aviation Authority.

He appointed as CEO an unknown Kiwi (Frank Baldwin) on a huge contract with the specific task to decimate departmental expenses. Admin staff were halved, and Flight Service was pinpointed as the most obvious way to cut millions from the budget. This achieved, Frank got his payout, went back to NZ with a fat wallet and a lasting reputation as an incompetent puppet.

Dick pointed to the halo above his own head and disclaimed responsibility. Since then, morale in the department has been non-existent.

Dick, however, has found it impossible to let go of the limelight. Whichever way the aviation wind has blown, there he is, claiming credit for everything positive and distancing himself from everything negative.

For those who think that all "businesses" should be run by egotistical millionaires with monumentally simplistic answers, Dick is the answer to a dream.

I suggest that anyone who cares to look a little deeper into Australia's aviation problems with a local point of view, rather than slavishly following hugely populated countries whose situation bears no resemblance to ours, will realize that the industry is being publicly ridiculed by an opinionated boy scout, a private helicopter pilot whose only concept of the larger aviation picture is a financial one.

The amazing thing is that anybody still seeks his opinion.
Binoculars is offline  
Old 26th Sep 2001, 02:11
  #14 (permalink)  
MEL
 
Join Date: Apr 1999
Location: Gerehu NCD
Posts: 3
Likes: 0
Received 0 Likes on 0 Posts
Post

The 'DICK' also made a coment on the ABC 7:30 report on 12th Sept about RFFS fees for a 737 at Karratha being $XYZ compared to Queenstown Tas at only a portion of that - since when does r can a 737 get into Queenstown ???

Get your facts straight DICK beofre mouthing off abut an industry you know NOTHING about.
Stick to your chocolate fingers !!!
MEL is offline  
Old 26th Sep 2001, 03:35
  #15 (permalink)  
 
Join Date: Oct 2000
Location: Think of a happy place. Think of a happy place. Think of a happy place
Posts: 279
Likes: 0
Received 0 Likes on 0 Posts
Post

MEL,

I think he meant Queenstown NZ not TAS.

Otherwise I agree with you wholeheartedly.
Time Bomb Ted is offline  
Old 26th Sep 2001, 06:20
  #16 (permalink)  
 
Join Date: Oct 2000
Location: Think of a happy place. Think of a happy place. Think of a happy place
Posts: 279
Likes: 0
Received 0 Likes on 0 Posts
Talking

Good one.

I've never worked out what a "dysfactant" is in Big Kev's products but I do know they work. Got the mold off my chewing gum very easily in the bathroom????????
Time Bomb Ted is offline  
Old 26th Sep 2001, 20:18
  #17 (permalink)  
 
Join Date: Sep 2000
Location: Australia
Posts: 38
Likes: 0
Received 0 Likes on 0 Posts
Post

I think Niles was spot on with his comments regarding Mr Smith and his general policy of a "user pays" aviation environment - unfortunately you can't have it both ways.

With regard to the failure of airspace reform under Mr Smith's chairmanship of CASA, the report by BASI/ATSB into the Class G Airspace "Demonstration" explains why and if you have time on your hands, it is worth reading to gain a full and thorough understanding of why it failed.

One of the key selling points of the demonstration (which was part of Airspace 2000) was that the current system was not "ICAO compliant and not aligned with the practices of other leading aviation countries, and there was a need to ensure compliance and greater harmonisation". BASI's investigation revealed that: 1) Australia's current Class G airspace is ICAO compliant; 2) The airspace systems of other ICAO states such as the USA and Canada are not fully ICAO compliant; 3) In the USA and Canada, IFR flight in Class G airspace is the exception rather than the norm (the lowest airspace classification such aircraft would normally operate in is Class E; 4)In the USA and Canada, radar coverage is generally far more extensive than in Australia; 5) The Class G and E environments of the UK, USA, Canada and NZ significantly differ so international harmonisation is not really possible; 6)Neither CASA or Airservices conducted a comparison of Class G or E airspace with overseas environments. If the BASI report is accurate, it would appear that what we were being told at the time may not have been completely accurate?

Finally, 4 Corners ran a program back in 1999 appropriately entitled "Crash Through Or Crash" (a link is below hopefully), which dealt with the Class G trial, the key players and why the demonstration was terminated. It is definitely worth a read and you perhaps gain a better understanding of how Mr Smith operates.

web page

web page

Henry the Octopus
Henry The Octopus is offline  
 

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off



Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.