2 November 2012

   Covered in this weeks newsletter

• Airways public meeting
• ATTTO merger
• Skill shortages Pilots
• CAA charges
• HSE review
• LIB 4 progress
• CAR 115 amendments
• DoC and AIRCARE

 
Yesterday “the boots” and industry customers attended the Airways public meeting. It was the best opportunity for customers to directly interface with the Board and senior management team. I would really encourage you to attend if the opportunity presents itself again next year.   We’re never slow in coming forward when given the opportunity to ask questions – our one was “What do you see as the three major challenges confronting Airways over the next 18-months to two years?”  The Chairwoman, Susan Putt, and CE, Ed Sims, both responded – in summary:

• The sustainability of regional airports and infrastructure when the competitive dynamics on the “Trunk” are dramatically changing with the $1 and $7 airfares between the Capital and Queenstown.
• Enhancing productivity – interestingly the “meal break” drama cost Airways over $3m and it’s still not resolved, though legislative change is in the wings so to speak.
• The environment, whether it be technology, regulatory or customer driven

Another key observation was the changing relationship between airports and airways with airport customers outnumbering other customers at the meeting.
 
The day before AIA along with other stakeholders of ATTTO voted to support the proposed merger of our ITO with the Hospitality and Retail sectors.  On balance, given the nature of the pressure coming on industry training organizations at the present time, we think this was the best option as assurance has been given that there will be no disruption in terms of supporting our industry trainees.  Tonight we will present our supreme Aviation Trainee of the Year Award at a function organized and hosted by ATTTO at Te Papa.
 
Having a strong and very effective industry training organization will be critical as we go forward and address what can only be seen as a very difficult and challenging time on the pilot employment front.  All indications we have is that by the end of this year or early next year there will be serious supply shortages.  Commercial pilot licenses issued for fixed wing are down around 20% whereas for rotary it’s down around 40%; and this is prior to the government policy setting changes of last year having an effect.
 
Flight schools tell us that interest in training is between 30-50% lower than at same time last year, caused largely by students now having to secure between $35-$60K of private funding before training can commence.  The cap on EFTS reduced from 600-450 earlier this year means that at a maximum we can produce around 130 -150 license holders whereas we’ve previously been producing around 230-240 per annum (fixed and rotary) for the last 20 years.
 
At a time when there’s clear evidence of an upswing in demand for pilots in our home markets of New Zealand and Australia, we’re winding down training – inevitably there will be a crunch – this roughly sums it up click here.  We’re working with the Flight Training executive and have secured support from the MOT to facilitate a meeting at the highest official level with TEC and MoE so that we can brief them both on the situation and ensure that we all work from the same facts – an issue, which has been really challenging, as we deal with a “revolving door” of advisors in both these agencies.  Support has been secured from Federated Farmers and an approach made to the Tourism Industry Association as an effected party.  
 
Our last major task this week has been turning our mind to the increased CAA charges which took effect yesterday. Last week we told you that we were working our way through an approach.  Most of you seem quite supportive, although to be fair there’s also a strong view out there that we should run this issue in public.  So what have we done?

• Official information request to MOT click here
• Application for exemption to CAR 61.35 (1),(i),(ii) click here as an interim measure until the rule change be changed to provide for recognition under the Act of CASA issued medicals

 
Our next steps are to write to the Board of CAA requesting they urgently discharge their statutory obligations under Section 72 E of the Act and introduce contestability of provision in areas impacted by the charges.
 
Of course the most difficult and challenging part of all of this is that even if there are structural changes within CAA we have been told that 50% of the charge is overheads and cannot be avoided - so to some extent the “deck chairs” are being shuffled.  Alternatively the CAA could demonstrate to industry that the hourly rate charge of $208  delivers so much value that it is justified.  There is no dispute that $208 appears a fair charge. However, anything beyond that amount is questionable.
 
We intend writing to Minister Brownlee to seek his support for a facilitated meeting with Treasury officials where we can enter into the debate of what fairly represents public good and private good.  Public goods are paid for by way of tax.  At the present time the full brunt of CAA’s increased overheads have been passed onto the industry.  We think this is a breech of Treasury guidelines and unfair….of course it is quite difficult debating such things with “thems that control the purse” particularly when the purse is very stretched.  However, we’re essentially giving them two years notice that “mission control” has a problem.
 
So another busy week in all and from here on in it just gets worse. 
 
The date for submissions on the review of Health and Safety in Employment legislation  has now passed. My pick is that we are in for more codes of practice as opposed to prescriptive legislation.
 
This has its risks – see CAA’s response to our comments re the changes to CAR115 click here.
 
For those interested we hope to have a consultation way forward on LIB 4 and the definition of crew – more on that in next week’s newsletter.
 
We understand that DoC are in the process of sending out communications to all those affected with potential concession changes in relation to AIRCARE.  If you haven’t heard anything from DoC within the next week or two I would give your local conservancy a ring.  
 

Until we speak again take care and stay risk aware Red boots

---

"One Industry - Aviation is in our DNA"

---

What's coming up?

Inside Wellington
A weekly report on parliament, legislation and central/regional government policy read more

SBC Sustain Newsletter read more
 

The New Zealand aviation industry received considerable publicity as a result of the India mission, 15 to 19 October, and not just in India read more

AIA members deals