Jun 30, 2010

Address to the International Aviation Club

Address to the International Aviation Club

Washington DC

The Hon Anthony Albanese MP

The Minister for Infrastructure, Transport,

Regional Development and Local Government

Leader of the House

Member for Grayndler

Wednesday, 30 June 2010

Good evening.

Thank you to our hosts this evening, the President of International Aviation Club, Mr Brent Connor, and the Australian Ambassador Mr Beazley.

It is my pleasure to be here.

More than 80 years ago, in June 1928, that Sir Charles Kingsford Smith, Charles Ulm, and Americans James Warner and Harry Lyon, completed the first ever trans-Pacific flight from Oakland in California to Brisbane in Queensland. It took them 10 days to cross the Pacific.

In 2009, almost 2 million people made the journey between our two nations. Today we can cross the Pacific in just 14 hours, without the numerous stops those pioneers made in 1928.

Never have the air links between our two nations been more popular, numerous or accessible.

We continue to commit to fostering a truly unique relationship which delivers economic, cultural and social benefits for both Australia and the United States.

Tonight I would like to discuss not only Australia’s bilateral aviation relationship with the United States, but also Australia’s perspective on broader issues in international aviation liberalisation.

The recent volcanic ash cloud across Europe demonstrated to the broader public just how much the world depends on aviation.

Whether natural or man-made disruption, the global aviation sector is incredibly vulnerable.

In addition to the significant economic impact following the volcanic ash cloud, we were also witness to human drama.

Airports not only in Europe, but worldwide, were stretched to the limits with tens of thousands of unexpected guests.

People with urgent travel plans spent extraordinary amounts of money to get to their destination. British comedian John Cleese actually spent more than five thousand dollars on a cab fare from Oslo to Brussels.

It can be argued that people from across the world hadn’t realised just how dependent we had become on aviation until we couldn’t use it anymore.

To quote Joni Mitchell, “you don’t know what you’ve got till it’s gone”.

Australia, like the United States, depends on air transport to link our people and goods with each other, and the rest of the world.

As an island nation, almost everyone who travels to and from Australia travels by air.

More than this, aviation is a critical enabling industry for the broader economy.

A safe, secure, and efficient aviation industry underpins a range of business, trade, and tourism activities.

Continuing growth in international air services is vital to support further growth in international business, trade, and tourism.

The role of Government is to create the right circumstances for safe and sustainable expansion.

Australian/ United States relationship

Australia and the United States have forged a strong relationship across so many sectors and aviation is no exception.

The Australia-United States Open Skies Agreement, signed in February 2008, demonstrates the strength of our bilateral relationship.

This Agreement was pivotal in allowing carriers such as V-Australia and Delta Air Lines to enter the market.

Their entry has increased competition and options for consumers, reduced fares, and contributed to even closer economic and people-to-people links between our two countries.

We are also increasing our cooperation in safety oversight through recent amendments to the Bilateral Aviation Safety Agreement between Australia and the United States.

This Accord sees cooperation aimed at maintaining an equivalent level of aviation safety between our two countries.

Importantly, it also facilitates acceptance of each nation’s approvals, evaluation and monitoring of aeronautical products, personnel, and facilities.

Amendments to the Agreement, signed earlier this year, mean Australia and the United States now mutually recognise each other’s certification processes for manufactured aviation parts.

Moreover, it highlights the confidence that both the Federal Aviation Administration and the Civil Aviation Safety Authority have in each other.

These changes also have the potential to reduce costs, and simplify processes for manufacturers to access our respective markets.

The Australian Government is committed to expanding opportunities that will grow trade and commercial links between Australia and the United States.

This initiative is part of our commitment.

Aviation White Paper

In December 2009, the Australian Government released Australia’s first National Aviation Policy White Paper, “Flight Path to the Future”.

This involved setting for the first time a 30 year vision for the industry with concrete reforms and policy directions.

Some of the key reforms to be undertaken in the coming years as part of the White Paper implementation include:

  • improving aviation safety through significant investment in air traffic management infrastructure and improved planning of future technology rollout;
  • enhancing aviation security through our $200 million package included in this year’s budget;
  • pursuing further liberalisation with key international aviation markets in Europe, China, Asia and the Pacific;
  • better targeting and integrating support programs focussed on remote area aviation services and infrastructure;
  • improved airport planning and integration with land transport planning; and
  • working with the International Civil Aviation Organization to develop a framework for the treatment of emissions from international aviation services.

Aviation Security

Secure and safe air travel is at the forefront of key White Paper initiatives.

In February 2010, the Australian Government announced a comprehensive $200 million package of measures to strengthen Australia’s international and domestic aviation security regimes against emerging threats, and importantly, bolster public confidence in the security of air travel.

Last year’s attempted bomb attack on a US-bound plane on Christmas Day underscored the reality of the ongoing threat of terrorism.

Aviation security is an international issue, and international cooperation is fundamental to safer air travel.

We have an obligation to all air travellers to ensure that every effort is made to make their journey as safe as possible.

Whilst Australia has a world class aviation security system, we remain vigilant to new and emerging threats.

Part of that vigilance is working together with our friends and allies.

In March this year I attended the Asia Pacific Ministerial Conference on Aviation Security in Japan.

It followed discussions in January this year in Sydney with Deputy Secretary for Homeland Security, Jane Lute.

The forum provided the opportunity for Australia and Asia-Pacific counterparts to discuss ways of strengthening global aviation security.

Australia is currently investing in new technologies and strengthened security procedures.

To further enhance security and ultimately passenger safety, full body scanners will be introduced progressively at screening points servicing international passengers by early next year.

In addition to these scanners, Australia will increase the number of firearms and explosives detection dogs by 50 percent at Australia’s major international airports.

These highly trained dogs and their handlers provide an effective, highly visible contribution to aviation security.

To progress the development of screening equipment for liquid-based explosives, Australia has also committed to conducting joint trials in partnership with the United States and the United Kingdom later this year.

Australia has also made a major investment in strengthening air cargo security by assisting industry to buy cargo screening technology and to introduce further security requirements from the point where cargo is originally consigned.

This critical upgrade will provide better security against potential threats.

It will also ensure that Australia’s air cargo security system continues to be aligned with international benchmarks.

Australia’s Approach to Aviation Liberalisation

The Aviation White Paper also set out the Australian Government’s intention to continue to take a liberal approach to the negotiation of international air services rights.

Our aim is to balance the economic, trade and tourism benefits that flow from opening up markets, whilst ensuring Australia’s national interest is protected.

We recognise that our airlines have benefited from international competition.

Australia has one of the most open and liberal aviation markets in the world.

Our domestic airline industry was deregulated in 1990.

While the government regulates the safety and security of domestic airline operations, we let airlines make their own commercial decisions about almost everything else.

In our view, deregulating a market means opening it up and allowing the market to work.

Australia leads the world in breaking down barriers to cross-border investment in airlines.

We have removed airline-specific ownership regulations for domestic airlines.

This allows our domestic airlines to be 100 per cent owned by foreign interests.

Today, three of Australia’s six largest domestic airlines are owned by foreign investors: Tiger Airways Australia, Regional Express Airlines, and Skywest Airlines.

Virgin Blue Airlines, our second largest domestic airline, began life owned by foreign investors, but is now majority owned by Australians.

Opening up our domestic aviation market has delivered lower fares and a greater range of services for consumers.

We have seen more people travelling by air and the maintenance of Australia’s excellent safety and security record.

The growth in our domestic industry has secured jobs and economic security not just for the many Australian workers employed in the domestic aviation industry, but also for those in industries such as the tourism sector, who depend on the flow of travellers to, from and within our country.

Internationally, we are willing to be open with those who are open with us.

It is essential that international air services agreements provide flexible frameworks that allow airlines to make commercial decisions about their services and plan for long-term expansion in the Australian market.

I have already spoken of the Open Skies Agreement signed in 2008 between Australia and the United States.

Today, half of all airline passengers travelling to and from Australia travel on flights operated under either open skies agreements or open capacity agreements.

In Australia’s view, the negotiation of Open Skies is not an end in itself.

The national interest must be served by any agreement before Australia will sign up.

But we do regard the general trend towards liberalisation as beneficial for national economies and the global economy.

In all cases, we seek to negotiate arrangements which keep available capacity and traffic rights ahead of current airline demand.

This enables airlines to make commercial decisions about where to fly and how often to fly, free from government interference, and to plan for future growth.

However capacity is not the only game in town.

Liberalisation of the international market needs to be fair and balanced.

Opening up third and fourth freedom capacity, while retaining outdated ownership restrictions, and prohibitions on fifth freedom services, does not deliver a balanced playing field.

Australia’s geographical position means that we are a long-haul end point market – that is a fact of life.

A range of important destinations – Europe, the east coast of North America – cannot be reached non-stop from Australia.

To compete effectively in the global aviation industry, Australia’s airlines require usable fifth freedom rights if they are to compete with the geographically advantaged carriers who operate from mid hemisphere hubs in Asia and the Middle East.

For an airline in Asia or the Middle East, every flight from Australia to its home base is also a flight to London, a flight to Paris, a flight to Berlin, and a flight to Rome – and without usable fifth freedom rights Australian carriers cannot compete on a fair and equal playing field.

This approach, that fifth freedom rights are critical to the opening up of international markets, is a key element of how Australia approaches air services negotiations.

We are also committed to negotiating bilateral agreements that provide for designation on the grounds of ‘incorporation and principle place of business’, to lay the groundwork for future liberalisation of the bilateral system.

But this is a long-term process.

How do agreements go ‘beyond Open Skies’?

In addition to unrestricted international traffic rights and capacity, such agreements hold the possibility of greater cooperation on safety and security, competition law and environmental protection, and offer greater opportunities for cross-border investment and consolidation.

The creation of the Single Aviation Market between Australia and New Zealand demonstrates what is possible.

Not only can Australian and New Zealand airlines fly between the two countries as often as they want to, and beyond the two countries as often as they want to, then can also fly anywhere they want within the two countries, including providing domestic services in the other country.

When combined with arrangements between safety regulators for Mutual Recognition of Air Operator’s Certificates, an airline from New Zealand can provide domestic services within Australia as if it were part of New Zealand, and vice-versa.

One significant indicator distinguishes our aviation industry from many others around the world – on the whole, our airlines are profitable.

Australian airlines such as Qantas, Jetstar, and V Australia provide Australia with a strong competitive presence in international aviation markets.

And the long-term commitment to Australia from foreign carriers such as United Airlines, Delta, Singapore Airlines, Cathay Pacific, Emirates and Air New Zealand help ensure Australia remains linked to the world, facilitating people and trade flows.

Conclusion

Australia regards the United States as our most important ally.

Aviation facilitates our people to people links.

So too should working together on aviation policy outcomes strengthen our links.

Our economic, social and individual links depend on it.

Thank you again for your time today.