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STANDING COMMITTEE ON RURAL AND REGIONAL AFFAIRS AND TRANSPORT
02/07/2008
Administration of the Civil Aviation Safety Authority

CHAIR —Do you have any comments to make on the capacity in which you appear?

Mr Re —I am appearing on behalf of the federal secretary and the federal president of the association as they cannot be here today because they are involved in high-level EBA discussions with Qantas. I am representing them in my capacity as a member of the technical committee and also as a senior official.

CHAIR —I invite both of you to make a brief opening statement before we go to questions.

Mr Re —I would like to outline the Australian Licensed Aircraft Engineers Association’s role in the aviation industry in Australia. The ALAEA is an employee organisation founded in 1960 to advance the professional, technical and industrial interests of aircraft engineers in Australia. These engineers are licensed pursuant to the Civil Aviation Act to certify maintenance work performed on aircraft within Australia.

Currently the ALAEA has about 3½ thousand members employed in all sections of the aviation industry. The motto of the ALAEA is: ‘To undertake, supervise and certify for the safety of all who fly’. We currently have coverage of around 80 per cent of licensed aircraft engineers in Australia, and it is important to be cognisant of the fact that the ALAEA is a professional representative body as well as a union, somewhat similar to the Australian Medical Association. Unfortunately, sometimes administrations such as CASA do not understand the nature of the association as such; hence, such perceptions cloud the assessment of whether associations should be consulted and allowed to participate or not.

Briefly, the role of licensed aircraft maintenance engineers—LAMEs—in Australia, pursuant to their statutory duties under the act, is at the forefront of inspection, repair, maintenance and certification that an aircraft is safe to fly with regard to the maintenance of aircraft. In effect, the LAMEs are the front line of statutory enforcement of maintenance standards in aviation. They are the linchpin in the safety assurance regime that ensures aircraft are safe to fly for passengers, aircrew and pilots. Without their competence and diligence, the trust and faith that that metal and plastic container will get to a destination safely through the air becomes nonexistent.

The importance of the role of the LAME in ensuring statutory maintenance obligations are met and the value of their contribution to the safety of Australian air travel for the public and aircrews, in our view, has been intentionally downplayed or ignored by the recent CASA administration.

Senator HEFFERNAN —Are either of you gentlemen a licensed engineer?

Mr Re —I am, yes.

Senator HEFFERNAN —What are you, Mr Norris?

Mr Norris —I am an industrial advocate.

Senator HEFFERNAN —So you are a half-baked lawyer?

Mr Norris —You could say that.

Senator HEFFERNAN —Generally, I think, Australians think they have got pretty safe planes, and Qantas has a wonderful record of air safety. A lot of that goes back to the good work that you fellows do. Could you explain to me what the journey in life is to become a licensed engineer? Do you start out as an apprentice? How long does that take? What tests do you have to pass to become a licensed engineer?

Mr Re —Certainly. There are a number of pathways you can go through. You can start off doing a traditional trade in the aviation maintenance field, which currently is a four-year apprenticeship. From that four-year apprenticeship, you then work within the industry, gathering and documenting practical experience that you gain on aircraft. You then do a series of examinations for the Civil Aviation Safety Authority called CASA basics, which are pursuant to your trade and which demonstrate to CASA that you have the knowledge of aircraft maintenance and systems.

Senator HEFFERNAN —Who supervises those exams?

Mr Re —That is run by CASA. You self-study for those exams or you can use the assistance of a training organisation. But, generally, you self-study for those exams and sit an examination that is held by CASA.

Senator HEFFERNAN —And then there would be a certificate as you pass each exam?

Mr Re —Yes, you are issued with a pass or fail and with a certificate following successful completion.

Senator HEFFERNAN —Which would be recorded in a database and then you would have a copy to hang on your wall at home.

Mr Re —Yes. Once you have completed those basic exams you are then eligible to sit for what is called an aircraft type licence, which is a course teaching you the systems on a specific aeroplane, and sometimes those courses go up to three or four months in duration. You then must pass examinations, supply the results of those to CASA and supply evidence of sufficient experience on the aeroplane, for CASA to then grant you a licence.

Senator HEFFERNAN —Where do you sit for those exams?

Mr Re —There are a number of private organisations that run those exams. Qantas runs a technical training school where the majority of its engineers—

Senator HEFFERNAN —But CASA does not supervise those exams?

Mr Re —No, CASA does not supervise those exams. I think they have auditory oversight of those schools, those training organisations, but the exams and the courses are run by independent bodies and they supply the results of the courses to CASA.

Mr Norris —They are accredited training organisations through CASA. They get an approval to be a training organisation.

Senator HEFFERNAN —And do they give you a certificate?

Mr Re —Yes, they give you a certificate of completion at the end.

Mr Norris —To get a handle on the hours involved, you not only have the hours of your trade, a four-year trade; you also have the hours to study for your basics. In the case of mechanical engineers the basics amount to approximately 20 basics. In the case of avionics there are about 26 basics. Each basic contains an exam. Depending on the individual, that can take up to years to do. With regard to the licence type courses, for example, an A330 type course runs for approximately 13 weeks full-time and the hours are approximately 800 hours. Within that, the licensed aircraft engineer may do 20 or 30 exams. So the qualifications are quite onerous. On top of that, they have to have the knowledge of the act is well.

Senator HEFFERNAN —So a licensed engineer does a trade—an apprenticeship—then practical work and eventually a series of tests and becomes a licensed engineer. Then he goes further and gets a type licence. It is like a pilots licence.

Mr Re —To obtain your licence you need to complete that type course so that you are issued with a first licence.

Senator HEFFERNAN —And all the way through there is a paper trail?

Mr Re —Yes.

CHAIR —Do we have a shortage of LAMEs in Australia?

Mr Re —Yes, I believe there is a shortage of LAMEs in Australia.

Senator O’BRIEN —The licence is issued by CASA. Could you tell us, from your organisation’s point of view or your personal point of view, how CASA, the regulator, has been performing and whether you have noticed any changes in the level of performance in the last five years?

Mr Re —CASA used to run the individual licence assessments from individual state offices. Over the last few years, there have been delays because they have moved the licence issuing to a central point in Canberra, so it goes to Canberra then comes back to the state office. There have been some complaints and mutterings that there has been an extra amount of time in getting back licence applications.

There has also been the increase in cost over the last few years with the cost recovery of renewing licences or sitting exams. The cost has now gone out to the LAME at the end of the line instead of being picked up by the administration within CASA. They are the major grumbles that we have heard, but we do not have people beating down our door about the actual licensing structure as such.

Senator O’BRIEN —What knowledge does your organisation or you as an individual have of CASA’s general performance as a regulator?

Mr Re —On their general performance as a regulator, since my involvement with the regulatory side of CASA—

Senator O’BRIEN —And how long has that been?

Mr Re —That has been two years now—coming up to two years now—of dealing with the working groups and the consultation side of CASA. Having a larger involvement with the association, I am well placed to express some of the frustrations and the problems that we see with CASA’s consultation process. We also see problems with CASA’s regulatory oversight of maintenance facilities.

Senator O’BRIEN —Such as?

Mr Re —For example, the problems that have been made public about overseas maintenance facilities and the quality of the maintenance that is coming out of them. That is even up until last week; there are still problems.

Senator O’BRIEN —What sort of problems?

Mr Re —Just the general quality of the work and the quality of the facilities that Australian aircraft are being maintained in due to the lack of facilities in Australia now to carry out that work.

Mr Norris —A case in point is an aircraft that has come back from overseas in the last week. Even though the airline has put in place a customer inspection requirement in its commercial contract as a result of negotiations and recommendations by the ALAEA, that aircraft has come back with over 60 defects, effectively, in the system. That aircraft has had faults such as earth wires not being connected, which causes an electric shock to flight attendants in the galley. Upon further investigation, we were advised by our members—though we have not had the documentation to verify it—that effectively the securing bolts for the actual galley assembly may not have been secured. We are looking at a mass of approximately 300 kilos in the aircraft that has not been secured properly. The work has been signed off as being done. This is a major concern. The paper system that the airlines rely on to ensure the work is done is not making the link to the practical application of that paperwork—in other words, the check that the work has been done. This is one of the faults in the CASA system of auditing as well.

Senator O’BRIEN —Is CASA auditing the work overseas?

Mr Re —From what we have seen, CASA’s role at the start is to grant approval to an overseas facility to allow maintenance of Australian aircraft there. If I may go back, about 12 to 18 months ago, a facility in Singapore was granted an approval to work on Australian aircraft. You might remember those aircraft; they were made very public with the ‘staplegate’ affair. Escape lighting was found stapled together, hence the release of an internal audit report by the AMWU to the Australian newspaper, which made it public. That exposed some of the very, very poor maintenance standards that were evident in that facility. These were problems that were picked up by internal reporting of the company involved. There was a series of very negative reports on this facility. It leads us to question how that facility ever got approval in the first place.

Senator HEFFERNAN —So who is the villain?

Mr Re —I think the villain in the first place is that that facility is allowed to be approved under the Australian system. Oversight—looking at that facility in motion and working with real people doing real jobs—does not seem to be taken into account when doing a desktop audit of whether a facility meets the regulations.

Senator HEFFERNAN —Does the paper trail that we talked about earlier—to get you to where you are—exist for those people over there in those facilities?

Mr Re —It would exist under their own system. I believe they would have to demonstrate to CASA in a desktop audit that their personnel meet certain requirements.

Senator HEFFERNAN —Desktop audits can be pretty scary experiences.

Mr Re —But the point we would like to make is that, if a facility obviously passed the desktop audit to be ticked off as an approved facility but, whilst the facility is actually working with real people doing the jobs and the quality that they produce is well below the allowable standard in the Australian regulations, there must be something wrong in the system that does not identify that, or there is no process for the aviation authority to go and look at an aeroplane being worked on prior—

Senator HEFFERNAN —So there is no requirement for an Australian qualified person to be the foreman of the task over in the foreign facility?

Mr Re —I do not believe there is actually a requirement for that. I believe an airline could put an aeroplane into a facility and say it is a CAR 30 approved organisation. When they give us the paperwork back that says the maintenance on that aeroplane is complete, we accept that because they have been approved by the regulator.

Senator HEFFERNAN —So you just track the villain. If I am an airliner from Boofhead Airlines and I have a 737 or whatever and I am going to get it serviced overseas, I take it that the international qualifications—which are approved by CASA, are they?

Mr Re —Within that facility, yes. If it has been given—

Senator HEFFERNAN —So I take in good faith the fact that when my Boofhead Airlines aeroplane goes into that facility for a service it should be fixed up to the standards I would expect anywhere else.

Mr Re —Yes, that is exactly right.

Senator NASH —How often do CASA actually go into that facility on the ground to make sure that what they have agreed to, that the level of maintenance that is ticked off on paper, is happening in practice?

Mr Re —I cannot answer that for you. We have actually asked CASA that question ourselves and for their audit schedule and results for facilities overseas, but they will not release those to us.

Mr Norris —There is actually a freedom of information matter before the Administrative Appeals Tribunal in regard to that.

Senator O’BRIEN —In terms of the approval of these facilities versus Australian facilities, presumably CASA has a role in approving or accrediting Australian maintenance facilities. That is my understanding.

Mr Re —Yes.

Senator O’BRIEN —To your knowledge, is that role the same or different for facilities based in other countries?

Mr Re —It appears there may be some difference. Maybe it is the distance factor. But obviously if you have personnel and you can put four or five people into a nearby facility to inspect it—

Senator O’BRIEN —There are a great many maintenance facilities around the world and different aircraft types. Some are conducted by major organisations and major airlines, as with Qantas performing tasks for other airlines. How much control should and can the Australian regulator have of these overseas based facilities, on the one hand for aircraft that operate exclusively within our domestic system and, on the other hand, for aircraft that operate in the international trade?

Mr Norris —The approval system for maintenance works basically by an airline, an AAC holder or a person who wants to become an approved maintenance organisation making an application and producing a system of maintenance. That system of maintenance is effectively what is approved. Overseas organisations work within their own regulatory regimes and the boundaries of international law are, as we know, very fuzzy. So, in effect, the obligation to comply with Australian standards arises in two ways: either by the CASA approval and their inspection saying, ‘We approve your facility and we believe it meets the requirements,’ or under commercial contract. Obviously with a commercial contract there is all sorts of toing and froing with the influences that that may have.

But effectively where the regulatory regime rests is with the system of maintenance. If the act required an overseas organisation to comply with Australian systems of maintenance and standards when that aircraft was overseas—and, in particular, the appropriate numbers of people to make sure that the work is supervised and done—then that might go some way to alleviating the problem. The difficulty we have with that is that, if that were so, then more of these overseas facilities being approved would mean a greater increase in the import of labour. Virgin have recently announced that they have imported $90 million worth of maintenance from overseas by sending aircraft overseas to be done.

Senator O’BRIEN —This is for a particular check.

Mr Norris —Yes. This is for a series of checks. This is a two-, three- or four-year contract.

Senator O’BRIEN —But it is done on aircraft after a certain number of hours of flying.

Mr Norris —Yes, that is right.

Senator HEFFERNAN —Is it a grease and oil change type of thing?

Mr Norris —No. These are heavy, major maintenance checks. We were advised yesterday that, in the current situation, Qantas are sending some of their two- or three-day checks to Hong Kong. They are now sending some to Malaysia, which is basically unheard of. The outsourcing issue for us is that, if the regime were put in place where the regulator in Australia could set that standard, you would end up with more of these overseas organisations, fewer jobs in Australia and basically the whole aircraft industry in Australia under threat. We have seen an increase in outsourcing in Qantas, for instance, going from two per cent in 2002 to over 20 per cent this year.

Senator HEFFERNAN —Is that related to labour costs?

Mr Norris —It is basically related to a shortage of labour. In talks with us Qantas have acknowledged that they are sending aircraft overseas not because of facilities, lines of maintenance, hangars or space but because of the shortage of workers.

Senator HEFFERNAN —Could you not interpret that to be a sovereign issue of international interest? If there were some sort of global meltdown and we did not have the capacity here to maintain our planes in the air and had to rely on somewhere over there and you could not get over there for some reason, we would be stuffed.

Mr Norris —Exactly. While the ALAEA are probably seen to complain a lot about this—I suppose because we do enthusiastically—the continual preaching about it tends to fall on deaf ears. The actual public interest involved here is massive. We are talking about significant high-technology—

Senator O’BRIEN —We have a very short space of time, so I want to talk about the role of the regulator, because that is what this is about. You have the commercial interests of the airline. Qantas and Virgin are two Australian based airlines, both of which will soon be operating internationally—I suppose Pacific Blue is now. What do you say should be the role of the Australian regulator in terms of Australian based companies operating aircraft domestically and internationally? What should the regulator be doing about the maintenance?

Mr Norris —On overseas aircraft operating domestically and internationally?

Senator O’BRIEN —Yes.

Mr Norris —Other countries, such as the United States, require the maintenance to be performed in the United States. For instance, Qantas has had to set up a maintenance base in Los Angeles to inspect and service its aircraft in Los Angeles. The majority of the labour there is overseen by a small number of Qantas people but 99 per cent of the labour is American based and employed. That creates jobs in the United States and leaves the skill base in the States. If airlines in America were to be granted access to our routes in Australia, they should be required to have a system of maintenance under the act here and they should be required to perform some of that maintenance in Australia. For instance, most aircraft coming from overseas spend eight to 12 hours on the ground here. That is time that can be utilised. But instead of flying engineers from overseas in and out again, which does not do anything for Australia, if there were requirements within the regulations that an aircraft arriving in Australia had to have inspections in Australia to meet Australian standards or whatever then effectively that would create the base within the overseas airlines and a wider base for labour across the board, which would preserve the skill base.

Senator HEFFERNAN —So this is a situation of being between a rock and a hard place. We have not got enough people for the present arrangement; we certainly would not have enough people if we had to do that. There is a bloke shaking his head at the back there. You say that a lot of the work is going overseas because we have not got the skill set here, the people to do it. If we had those engineering requirements for that 12-hour stay here, we would need another set of licensed engineers, would we? I still cannot work out who the villain is.

Mr Norris —The villain effectively is chasing lower costs. It is cheaper to do maintenance overseas.

Senator HEFFERNAN —But earlier you said that that was not the driver; it was really that there was not—

Mr Re —I think there are two parts to it. One is that one of the key reasons there is now a desperate shortage of qualified licensed engineers in Australia is that a large amount of them were actually made redundant from the industry about two years ago, and those people do not want to re-enter the industry.

Senator HEFFERNAN —They don’t?

Mr Re —No. So when you say there is a shortage, there is a shortage of people with qualifications who wish to be part of the industry. However, if, as Gary said, it were airlines on a servicing basis, I believe there would be a sufficient pool to man airports and lure people back in.

Senator HEFFERNAN —But we have a shortage of doctors and we generally do not send the patients overseas; we bring the doctors in.

Senator O’BRIEN —It is a bit harder. Actually, we do send some.

CHAIR —I remind the committee that we are on a very tight time schedule today. Thank you, Mr Re and Mr Norris. I do thank you for your assistance to the committee.

Mr Re —I would just like to mention that we prepared a submission for today that involved a lot of consultation problems that we have had with CASA. I would like to table that for the committee to read, please.

CHAIR —Yes; thank you. The secretariat staff will get that from you.

[9.32 am]