Dec 2, 2008

Launch of the Aviation Green paper

LAUNCH OF THE AVIATION GREEN PAPER: Flight Path to the Future

December 2 2008

Address to National Press Club, PARLIAMENT HOUSE

The Hon Anthony Albanese MP

Minister for Infrastructure, Transport,

Regional Development and Local Government,

Leader of the House,

Federal Member for Grayndler

Most of you probably wouldn’t know the name Jim Darcy. Jim was a stockman who lived in Western Australia in the early 1900s. He also helped shape Australia’s aviation industry.

90 years ago Jim fell from his horse while working in the outback. The only way to get help was to set off on a 12 hour trip – by horse – to Halls Creek. Unfortunately no-one in town could help Jim, so a doctor from Perth was summoned.

The doctor travelled for 10 days straight – by cattle boat, Model T Ford, a horse drawn sulky and finally by foot. Jim Darcy died the day before the doctor got there.

Darcy’s plight dominated the news headlines, and brought into sharp focus the urgent need for proper medical care in Australia’s outback.

Jim Darcy’s legacy was to inspire Reverend John Flynn to set up what is now known as the Royal Flying Doctor Service.

The Royal Flying Doctor Service is admired the world over, and has come to epitomise the ingenuity and determination of Australia’s aviation pioneers.

Yes, aviation is important. Important to our economy. Important to our way of life.

Australia’s aviation industry has undergone a quantum leap in the last 90 years.

Gone are the days of waiting more than a week for medical attention. Today, if you need a doctor in the outback, the Flying Doctors will be by your side within hours.

In 1929, it took Charles Kingsford Smith nearly 13 days to fly from Sydney to London. Today, British engineers are working on a hypersonic jet that can potentially fly from Europe to Australia in less than five hours.

In 1945 you had to save your entire wage for two a half years before you could even think about flying from Sydney to London. Today, a flight between these two cities costs, on average, about two weeks’ wages.

And – this is extraordinary – but up until the mid-1980’s, international air fares from Australia were regulated and effectively set by the Commonwealth Government. Regulation ANR 106A actually allowed transport department detectives to visit travel agents to check that tickets weren’t being sold below the set price, or on so-called “unapproved” routes. Today, a few minutes on the internet comparing prices can save you hundreds of dollars.

Flying today is not only easier and cheaper – it is also quicker – and more comfortable. Aircraft like the Airbus A380 and Boeing’s 787 Dreamliner will not only get their passengers to their destinations quicker. They will also use less fuel, produce fewer emissions and be quieter than older aircraft.

A proud history of reform…

The growth of Australia’s aviation industry over the last 90 years is not only due to bigger, faster planes, and committed people like John Flynn.

Our national governments have played an important role too. None more so than the Hawke Labor Government. It had the foresight and fortitude to progress a number of ambitious reforms that have enabled the industry to grow and give travellers a better deal.

Perhaps the Hawke Government’s single, most important aviation achievement was getting rid of the outdated two-airline policy in 1990. Ending the Ansett and Australian Airlines duopoly provided clear benefits to consumers, and as a nation, we’ve been reaping the benefits ever since.

Capacity has increased, nearly quadrupling over the last 20 years. More people are flying than ever before. In the year before deregulation, about 12 million people flew on domestic and regional flights in Australia. By last year, that figure had grown to 48 million.

The fact that Australia has one of the most open, competitive domestic aviation sectors in the world has helped to sustain this growth. We are one of the only countries which allows 100 percent foreign ownership of its domestic airlines. Allowing foreign airlines into the Australian domestic market stimulates competition, and helps keep airfares low. Virgin Blue started as a foreign-owned carrier and now Tiger Airways has added to competition.

Internationally, around 7 million people a year flew to and from Australia in the late 1980s. Today, that figure has grown to about 23 million a year.

International agreements…

These numbers would not be possible, were it not for Australia’s liberal approach in negotiating bilateral agreements. Australia currently has some of the most liberal bilateral agreements in the world.

The agreements reap significant benefits for Australian travellers, but the agreement process underpinning them are anything but a smooth ride.

International aviation is the exact opposite to normal trade negotiations. International trade usually operates on the assumption that the market is open unless government restricts the market.

Not so in international aviation. Markets are closed until governments grant access.

Air services negotiations focus on nine, so called, ‘freedoms of the air’ affecting the rights to operate to, from, through or beyond ports in other countries. For long-haul destinations like Australia, a combination of rights often need to be negotiated from several governments before services can operate.

The Rudd Government is working actively to secure the best results in the national interest – balancing access to valuable rights for Australian airlines and the development of the Australian industry, with the competitive benefits of new services from foreign airlines.

We have recently concluded a number of open skies agreements, the most important of which was with the United States in February this year.

Negotiations are underway on a comprehensive air services agreement with the European Union to replace the current bilateral agreements with EU Member States, with the latest round held just last week. These talks were constructive and confirmed that there is common ground on the majority of issues. There will be further discussions early next year.

This agreement is expected to remove many, if not all, of the restrictions on services provided by Australian and European airlines between the two continents. We look forward to the new services that can come from these agreements.

And we look forward in particular to the commencement of operations by V-Australia on the trans-Pacific route early in 2009.

The Rudd Government has also moved to give Australians travelling overseas on international airlines access to fairer compensation in the event of an airline accident.

We have done this by acting to implement the 1999 Montreal Convention. It is the latest in a series of important aviation decisions taken by this Government since coming to office.

This convention is a multilateral aviation agreement that updates the potential liability of international carriers. Australia’s formal instrument of accession was lodged with the International Civil Aviation Organisation last Tuesday. The convention is due to come into operation for Australia from 24 January 2009.

Turbulent times ahead…

It is clear that Australia’s aviation industry has been performing strongly, but just as clear is the fact that the industry faces a number of significant challenges. According to the International Air Transport Association, there was a 3 percent decline in international passenger numbers this September.

At the same time there was also a seven and a half percent decline in international cargo traffic. IATA now predicts industry-wide losses could exceed its original estimate of $5 billion, despite the recent fall in world oil prices.

This year alone the world has seen at least 30 airlines collapse. These are indeed turbulent times for the industry.

The impact of the global financial crisis is a significant challenge for Australia’s aviation industry, but in reality, it is one of many. Recent high world oil prices, skill shortages, and climate change are some of the major issues facing the industry.

Meeting the challenges…

The only way to meet these and other challenges is by working with industry and the community. We need to plan ahead, prepare for the future and accept that some changes will need to be made.

To do this, we need a strategy that acknowledges the dynamic nature of aviation. We must position Australia so we can adapt, be flexible, and take advantage of opportunities when they occur. We need a national strategy for aviation which looks at the big picture and the long term.

Not one that is reactive, but one that both anticipates and shapes the future. We need a strategy that closely links the development of aviation to the economic development of the nation. We will not achieve these objectives if we allow ourselves to drift along on auto pilot.

Too much is at stake, like the 50,000 jobs the industry directly supports, the $6.4 billion dollars it contributes to the national economy, and the social linkages our aviation industry provides to the global community.

The National Aviation Policy will guide and facilitate the industry’s growth through this challenging first period of the 21st century. It will give industry the certainty and incentive it needs to plan and invest in the long term. It will also give clear commitments to travellers and airport users, and the communities affected by aviation activity.

The first step of this process occurred in April this year when I launched the Issues Paper. The response was overwhelming positive, generating nearly 300 submissions.

The Aviation Green Paper which I launch today outlines the Government’s proposals to deliver against four key themes. These are safety, prosperity, infrastructure and environment.

Improving safety – the Government’s top priority…

Safety tops this list of priorities because it is the Government’s primary objective when it comes to air travel. Every single passenger deserves to get to their destination safely. Business deserves to have their goods transported safely. And those working in the skies or at airports deserve a safe workplace.

Australia has an enviable record of protecting the safety of the travelling public. It’s a record the industry should be proud of. But as we all know, past performance only counts for so much.

If we want to maintain, and indeed enhance our reputation as having the world’s safest skies, we must continue to look at ways to improve safety.

The Green Paper does just that. It spells out in clear terms the Government’s expectation that safety will be the number one priority for all government agencies and the aviation industry.

The Paper outlines a number of initiatives that will make clear the roles and responsibilities of Australia’s aviation agencies, which in turn will lead to safer skies.

Firstly, the Government will establish a board to oversee the Civil Aviation Safety Authority. As I mentioned earlier, Australia’s aviation industry has undergone significant change in the last few years. The range of issues CASA deals with has also expanded. We need to keep pace with these changes.

Appointing an experienced and skilled board will strengthen CASA’s governance arrangements, and provide stronger support to the CEO and the Minister. It will also play an important role monitoring CASA’s effectiveness across its range of functions. The board will also facilitate stronger links between CASA and other government agencies, and allow stronger input from industry into strategy.

The Government will improve the penalty regime, to encourage self-reporting and ensure penalties are strong, balanced and equip CASA to deal effectively with genuine safety problems.

The Government also plans to make structural changes to the Australian Transport Safety Bureau. The ATSB will become an independent statutory authority, rather than being a part of my department which is currently the case. Making the ATSB an independent statutory authority will strengthen its independence, and improve its ability to carry out transport safety investigations.

The Government will also pursue air safety improvements in our region through targeted safety regulatory and air traffic management activities. We are also committed to best practice in safe air traffic management. We will do this through the use of advanced air traffic management infrastructure and systems, which will protect and strengthen air safety.

Australia’s fine safety record over the past 20 years has been one of the driving forces behind the aviation industry’s growth and prosperity. It’s a record I am determined to maintain, and indeed, build upon.

Airport planning – a better balance…

Another issue I’m committed to progressing is working with industry to make sure our airports can meet future demand. Passenger numbers at all of our major airports are increasing. In fact, it is predicted they will keep growing by about 4 percent a year to 2025. This prediction poses a fundamental question – will Australia be able to cope with the growing number of people who want to travel?

Already, many of our major airports are operating close to capacity during peak times.

Perhaps the issue to attract the most attention during the discussion paper phase has been airport development and planning.

In addition to advances in technology and regulatory reform, the other major change to Australia’s aviation industry in the last 20 years has been the transformation of our major airports.

Today, our airports are vibrant economic hubs with a gross output of over $43 billion. Airports provide a broad range of services and accommodate a large number of businesses that employ over 170,000 people, many as shift-workers. Most of our major airports have invested significant sums of money in their on-site infrastructure in recent years. This investment is expected to continue.

Melbourne, Perth, Canberra and Brisbane airports are all planning major upgrades to help them cater for growing passenger numbers. In fact, it’s estimated that our 21 federally-leased airports will benefit from some $4 billion dollars worth of private investment over the next few years.

But with this growth has come community concerns about the flow-on effects from airport developments. For example, a number of community groups are concerned about the impact new airport developments are having on infrastructure outside the airport.

Up until now, airport planning has not been handled properly. The Green Paper proposes measures which would improve the coordination and oversight of airport development and operations.

We must make sure development on airport land is not approved in isolation from state and local planning laws, and that it is better integrated with the surrounding transport and community infrastructure. We can and we must do better.

The Green Paper outlines the Government’s intention to work more closely with other levels of government and the community to achieve just that.

At the heart of this closer working relationship will be new bodies called Airport Planning Advisory Panels. The Government proposes to establish advisory panels for each of the major airports, comprised of experts from government, as well as representatives from the community. It is proposed that the panels will be responsible for assessing all airport master plans and major development plans, and then reporting to the Minister.

We will strengthen the airport master plan process so that airports will need to outline clearly their future development plans.

We will also establish community consultation groups at each airport to give affected residents a greater say in the overall planning process. At the heart of the changes is the need to improve the level of communication and coordination between airports and the people who live near them.

No airport issue has been more controversial or long-standing than Sydney. The need for additional capacity in Sydney has been acknowledged for many years, but the challenge is obviously finding the right site for a second airport.

To find the right site we need to have the right process. The simple fact is that, while Sydney Airport is coping with growth at the moment, it is nearing capacity. The so-called peak hour at Sydney Airport has trebled in a decade from two hours a day to at least six hours a day. The legislated curfew and hourly movement cap at Sydney Airport will remain.

Investment in aviation infrastructure is a long and complex process, and it’s clear we need to take a long term view. Sydney Airport Corporation is currently working on its Master Plan which forecasts activity and development at the airport for the next twenty years. It is important this process concludes and that all stakeholders take the opportunities available for input into the plan. Once this plan is complete, I will establish a further process to identify additional capacity for the Sydney region.

I’ll announce further details about this process in the White Paper next year.

The Rudd Government does not support building a second Sydney airport at Badgery’s Creek.

Other Green Paper initiatives…

As I have outlined, the Green Paper focuses on four themes … safety, prosperity, infrastructure and environment. Aviation is a complex, dynamic and interconnected industry. As such, national aviation policy needs to be broad in scope, yet focussed on the key challenges.

Security

The terror attacks in Mumbai last week have reminded governments around the world that we must maintain focus on improving our countries’ security measures. This, of course, includes aviation security.

The Rudd Government is committed to improving security at airports. This includes acting on recommendations from the current review of aviation security screening. We will continue to ensure our passenger and baggage screening arrangements are consistent with international best practice.

Skills

In the area of skills, the Government will work closely with the aviation industry to ensure Skills Australia understands the industry’s unique needs. This will help Skills Australia make an informed decision when it allocates training places from the Government’s Productivity Places Program.

Already, for the first time, key aviation occupations such as pilots, engineers and security screeners are eligible for funding from the Australian Government. And in June, I launched the new Aviation Training Package which improves the consistency of training requirements between our training providers, CASA and the Defence forces.

General Aviation

The general aviation industry is crucial to many Australian industries, particularly in regional and remote Australia. The Government believes one of the most effective ways to assist GA is through completing CASA’s regulatory reform process.

By removing unnecessary regulatory impediments, but not compromising safety, we will be able to help improve the viability of GA. General aviation also requires more certainty about planning at secondary airports and the Government will deliver that.

Climate change

One of the most significant policy challenges facing this government is climate change, and it’s clear that aviation has a role to play.

The Green Paper re-affirms this Government’s commitment to work with the industry to develop an effective framework to respond to climate change.

This includes working closely with industry as we finalise the design of the Carbon Pollution Reduction Scheme.

It also includes working to complement industry improvements – like more fuel-efficient aircraft – with improvements in air traffic management, such as Airservices’ flight path management.

Working closely with airlines, a recent trial of Required Navigation Performance approach and departure procedures in Brisbane, provided a practical means to reduce carbon dioxide and noise.

Using high tech avionics, Airservices’ Brisbane Green Project saved over 1.4 million kg of CO2 emissions in the first 20 months, and significantly reduced the number of people in the community exposed to aircraft noise.

ADSB

The Government understands a growing aviation industry requires modern technology to underpin it.

To meet these challenges, the Government supports the introduction of new technologies to enhance air traffic navigation and surveillance, improve safety and help us meet growing demand.

The Government will be providing a clearer planning framework for our aviation agencies on directions for navigation and surveillance.

The Government will also ask agencies to finalise a proposal for the wider adoption of ADS-B technology.

Noise

Advances in technology have meant the next generation of aircraft are quieter than their predecessors.

Aircraft noise is an issue that affects many Australians.

The Government will maintain existing curfew arrangements at Sydney, Gold Coast, Adelaide and Essendon Airports.

In the long term, the need for a curfew at Brisbane Airport will be periodically reviewed.

The Government also proposes to limit the operation of noisy aircraft and to phase out marginally compliant aircraft, such as hush-kitted Boeing 727s.

Providing appropriate information to noise-affected communities is important.

The Government is committed to improving information access on aircraft noise to communities.

We will do this through initiatives such as the Transparent Noise Information Program, and Airservices’ WebTrak, which will provide information on aircraft flight paths in a manner not previously possible.

Conclusion…

I would like to conclude by leaving you with one of Reverend John Flynn’s favourite quotes.

“Do not pray for tasks equal to your powers, but for powers equal to your tasks.”

We must indeed have the right tools at our disposal to make sure we can meet the challenges ahead of us.

As I’ve outlined to you today, the tasks ahead of Australia’s aviation industry are significant.

That is why the Rudd Labor Government is doing what no government has done before us.

We are taking a long term view of Australia’s aviation industry.

Our eyes are fixed far on the horizon.

We are taking action where action is needed; planning ahead so we meet future challenges; and grasping the opportunities presented to us.

We will get there through careful planning, in-depth consultation and some bold thinking.

We are laying the groundwork for future growth, and a stronger, more vibrant aviation industry.

That is what this Aviation Green Paper is all about, and I’m pleased to officially launch it today.