2015 RAAA National Convention: ‘The Sky's the Limit’

Speech

WTS026/2015

23 October 2015

Crowne Plaza, Hunter Valley

Thank you Paul [Tyrell, CEO, RAAA].

Good morning everyone.

I would first like to particularly thank Jim Davis, the Chair of the RAAA, and his fellow Board members for their contributions to regional aviation, and for the invitation to speak with you today.

I would also like to thank Paul Tyrell for his great contributions as CEO of the Association for many years—well done Paul, and all the best for the future.

The Coalition Government is deeply committed to regional Australia—and we recognise how much its progress depends increasingly on a healthy regional aviation sector.

Their interdependence has been constant since aviation began in Australia.

In the 20th century the emerging regional aviation industry was a leap forward in communication like the broadband network is today.

Regional aviation pushed literally above and beyond the limits of surface transport and created a quantum leap in networking regional Australia into the national economy.

And aviation provided regional Australians with access to essential health and other services through innovations, like the Flying Doctor service, which remain vital today.

It is interesting to reflect that the metropolitan air links between Brisbane and Sydney actually grew out of the regional links between Lismore and Brisbane, and later Lismore and Sydney, that New England Airways established in the 1930s.

Qantas, also, as we all know, started as a small regional airline flying Winton to Longreach in Central West Queensland. Qantas deserves great credit for the way it preserves its heritage, particularly with its support of the founders museum in Longreach.

These cases offer two lessons that remain relevant today.

Firstly, regional efforts can create pay-offs which ultimately benefit all Australians.

And secondly—even in a digital economy where much can be done remotely—regional aviation provides, and will continue to provide, many of the major arteries connecting Australia's regions into the broader national life.

For our part, the Government is committed to maintain the right environment for sustaining the health of these arteries.

Trends in regional aviation

As you know very well, the progress of any industry sector cannot be assured and from time to time all will face challenges. Most regional airlines do not go on to be a Qantas and drift off into history.

It is a tough business.

Regional aviation is facing its challenges again especially around a fall in demand in some sectors.

In the 12 months to July this year there was an overall decline of 2.9 per cent in passenger movements through Australia's regional airports—itself part of a decline of 0.6 per cent in Australia's total domestic passenger flows.

These contractions are always unwelcome.

However, they emphasise the importance of all aviation players—including governments and industry—being on top of their game and doing what is necessary to expedite a rebound.

This includes being responsive to shifts in demand around regional Australia—and several areas are showing impressive growth.

Then decline is heavily focused on FIFO services where cutbacks in mine staffing and new developments have slashed travel requirements. On the other side the lower value of the Australian dollar has been a huge help to the Australian tourist industry with more overseas visitors finding Australian more affordable and locals realizing it is cheaper to holiday at home.

In July 2015, passenger traffic on the Sunshine Coast—Sydney route was 11.7 per cent greater than in July 2014; the Darwin—Perth route was up by 9.7 per cent; and the Broome to Perth route was up by 8.5 per cent.

The strongest growth of all was at Proserpine Airport in the Whitsundays, where passenger movements were up 27.8 per cent over July 2014. Cairns and Ayres Rock are enjoying a resurgence. Following strong and sustained growth in outbound Australian tourism for a decade, the fall in the value of the Australian dollar is creating real opportunities to reinvigorate the growth in domestic tourism.

The bottom-line here is that there are good grounds for an realistic optimism about regional aviation's prospects.

Regional aviation

The Australian Government is investing both dollars and effort in these prospects.

We are targeting our investments to where they are most needed, and they cover several of regional aviation's immediate and longer-term concerns.

The Government's support for regional air services is among our significant efforts. Our En-Route Charges Payment Scheme is providing an additional $4 million up to June 2019 to support regional carriers in providing passenger services to many smaller communities.  

The Scheme assists carriers to service over 30 economically vulnerable regional passenger routes.

These include new routes such as Mudgee to Sydney, Taree to Newcastle and Perth to Onslow.

In parallel, we have directed $4 million up to June 2019 to continue supporting vital aeromedical regional services, such as the Royal Flying Doctor Service. 

And of course, built infrastructure is as vital to regional aviation as to any other industry.

We significantly increased funding for the Regional Aviation Access Programme in the May budget with an extra $33.8 million up to 2018–19 for upgrades to remote airstrips, with more announcements soon.

These infrastructure capital works complement the $56 million up to 2018–19 that the Government is directing to air operators to provide remote and isolated regions with a regular air transport service. Some 260 communities are serviced under this programme.

These generally weekly services carry passengers and freight including fresh food, educational materials, medicines and other necessities.

These vital services to isolated areas underline the great value of regional aviation to regional Australia—and the Government is pleased to do our part in supporting them.

Northern Australia

Our release of the White Paper on Developing Northern Australia earlier this year was a significant development for regional Australia's future—and for regional aviation.

The White Paper included a commitment to create a Business Stakeholder Group dedicated to improving aviation and maritime connections in the north.

I will be announcing the establishment of the Group soon. It will represent a broad cross-section of skills across the aviation and maritime industries and the wider business community.

The Group will work closely with regional aviation stakeholders to identify impediments to aviation services and develop practical solutions for further growth in the North.

Regional access to Sydney Airport

I mentioned earlier the pioneering efforts of New England Airways in the 1930s—and an important function of regional aviation clearly remains connecting metropolitan and regional areas.

A Western Sydney Airport will be operational by the mid-2020s and a new greenfields capital city airport is one of the most exciting aviation projects imaginable.

It is estimated that by 2060, a Western Sydney Airport will increase in Australia's GDP by $24 billion—and this growth will provide significant opportunities for regional airlines.

On Monday I released the draft Airport Plan and draft EIS for public comment over 60 day or 45 business days).

First stage construction of a single 3,700 meter runway and terminal building will cater for 10 million passengers, car parking and our $3.6 billion Western Sydney roadworks package is well underway. Our plan provides for a second parallel runway around 2050 to cater for 80 million passengers.

However, Sydney's Kingsford Smith Airport remains an essential transport hub for regional New South Wales. 

And the Government is committed to retain the existing protections for regional airline access to Kingsford Smith Airport.

The new Western Sydney Airport will provide scope for growth, not a substitute for existing arrangements.

Aviation Safety Regulation

I am well aware of the RAAA's concerns about the extent and nature of Australia's aviation safety regulation.  

The Government's Aviation Safety Regulation Review acknowledged Australia's excellent aviation safety record—but identified scope for improvements to maintain this record.

The Government agreed to most of the Report's 37 recommendations and action is well under way to implement the Government's response to the Report.

I have already issued new Statements of Expectations to Australia's three key aviation safety agencies—CASA, Airservices Australia, and the Australian Transport Safety Bureau.

These publicly outline the Government's expectations of these agencies over the next two years—including the timely implementation of our response to the Report.

The Government has appointed a new CASA Board, including members who bring relevant technical, operational, governance and managerial aviation experience to the Board. That includes new CASA Chair, Mr Jeff Boyd whom I'm sure you all know very well given his regional aviation background.

The Government also welcomes CASA's release of its new regulatory philosophy—which emphasises the importance of collaboration and communication between CASA and Industry.

CASA is engaging with the aviation industry on several deregulation initiatives to reduce the regulatory burden on industry. This includes looking at specific regulations, rules and procedures that impact on regional airlines.

CASA has also invited the industry to submit specific deregulation proposals.

I encourage the RAAA to continue its work through its own proposals with CASA staff and the Director of Aviation Safety, Mark Skidmore, who is speaking at this conference.

Aviation skills

It is clearly essential that the aviation industry's workforce has the skills and qualifications needed to meet future growth and demand without compromising safety.

The Transport and Logistics Industry Skills Council has identified a range of aviation specific workforce development needs and challenges.

Globally, the International Civil Aviation Organisation, predicts that in the next 20 years airlines will need an additional 25,000 new aircraft to meet demand—it may be a good time to consider buying shares in aircraft manufacturers!

As a result, by 2026 the entire international industry will need 350,000 new pilots and 480,000 new technicians to maintain the aircraft.

There is already a particularly high demand for pilots—and, almost inevitably, poaching—stemming from strong growth in Asia and the Middle East.

These pressures are impacting on Australia and, although I note the good work Rex is doing through their Pilate Cadet Programme—there are significant difficulties in attracting people to work in regional or remote locations.

These pressures create the need to better understand the current challenges and future workforce needs of Australia's aviation industry.

This is why I am establishing an Aviation Workforce Skills Study.

The Study will help Government and industry better understand the future needs of the Australia's aviation workforce, so that we can work to meet them.

The Aviation Industry Consultative Council has advised on the parameters of the study and my Department has engaged the Transport and Logistics Industry Skills Council to lead this work—with a close engagement with industry.

I expect the study to be completed in early 2016.

The Government is also finalising a new and contestable model for developing vocational education and training products.

Australian industry will take the lead in this process, because it is best-placed to know its current and future skills needs.

The move to a contestable model ensures arrangements respond to industry needs.

Skills Service Organisations will be selected through a competitive grants process. They will assist Industry Reference Committees to develop and review suitable training products—and we will shortly announce the successful Skills Service Organisations which will support the Committees.

I expect that the new arrangements will be fully operational from January 2016.

Announcement of the Regional Aviation Security Awareness training package

Finally, the safety and security of Australian aviation is the fundamental priority for the Government, and everyone engaged with the industry.

While there is no evidence of a specific threat to regional aviation in Australia, it is likely to remain a potential terrorist target for the foreseeable future.

The nature of this threat will continue to evolve—so it is essential for Government and industry to continue their efforts to deal with it.

In this context the Government has decided to fund the development and delivery of a new Regional Aviation Security Awareness Training Package.

The Package will commence in 2016 and be available to the 158 security controlled airports in small, lower-risk categories—including 49 airports which host screened air services, such as the Bundaberg, Devonport, Geraldton and Tamworth Airports.

The Package will support many regional and remote airports in accessing important training.

It will provide them with a comprehensive understanding of the current risk environment, assist them in planning responses to future threats, and improve general security awareness.

My Department will shortly begin consultations with regional and remote airport and airline representatives to develop the content and learning delivery model for the Package.

The current Regional Passenger Screening Programme will now be directed to raising security awareness at regional and remote airports.

Regional and remote airports are vital to Australia's prosperity and well-being—and the new training initiative will support their efforts to provide a secure aviation environment.

Conclusion

I have touched on a wide range of issues over the past few minutes—but, as you know, the breadth of issues involved in aviation is very much the nature of this industry.

The initiatives I have announced today will make an important contribution to regional aviation.

But beyond the specifics of both our new and existing measures, I can assure you that the Australian Government is thoroughly committed to the progress of regional aviation.

And we share your goal of ensuring it continues to maximise its longstanding—and outstanding—contribution to the Nation.

Thank you very much, and I am happy to take your questions.