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RURAL AFFAIRS AND TRANSPORT REFERENCES COMMITTEE
25/02/2011
Pilot training, airline safety and the Transport Safety Investigation Amendment (Incident Reports) Bill 2010

CHAIR —I welcome representatives from the Regional Aviation Association of Australia. You have lodged submission No. 19 with the committee. Do you want to make any amendments or additions to it?

Mr Tyrell —No, but do I need to explain to the committee the scope of the RAAA?

CHAIR —You can make an opening statement now, but do not go on too long.

Mr Tyrell —I promise. Very briefly, the Regional Aviation Association of Australia represents 27 operators. For example, those operators include Rex, Airnorth, Alliance, Skywest, Brindabella, Sharp Airlines and the Royal Flying Doctor Service. We also have 55 associate companies, including BP, Shell, Lufthansa Technik, Bombardier, Embraer, Jefferson and Pratt and Whitney. That will give you a flavour of the scope. Would my colleagues like to explain their operations?

CHAIR —Can I ask a dumb question? Where are Sharp Airlines?

Mr Sobey —It is based in Hamilton and operates out of Adelaide, Tassie and south-west Victoria.

Mr Boyd —Brindabella Airlines is a Canberra based airline and carries about 100,000 passengers a year. We operate seven RPT aeroplanes. We operate flights from Albury, Canberra, Newcastle, Sydney, Brisbane, Coffs Harbour, Moree and Tamworth.

Mr Sobey —Sharp Airlines employs about 80 people and turns over about $16 million a year. We carry about 80,000 passengers and we operate in the areas that the big airlines do not want to push into, but mainly regional South Australia, Victoria and Tassie.

Senator XENOPHON —You do Adelaide.

Mr Sobey —And Mildura-Adelaide, yes.

CHAIR —Do you have an opening statement?

Mr Tyrell —No.

Senator XENOPHON —Thank you for your submission and I acknowledge the importance of regional aviation here in Australia. Do you think something needs to be done in terms of the cost of pilot training? One of the common complaints amongst small carriers is that you train people up, they build up their skill set and then they are off to one of the main carriers. They go off to QantasLink, Jetstar or Virgin. How do you deal with that, and what do you think the federal government could do in a practical sense in terms of pilot training and also retention from your point of view?

Mr Boyd —I think Peter could probably explain the pilot training best, and I can have a chat about the retention, if you like.

Mr Sobey —Unfortunately in pilot training in Australia, one of the biggest problems that we have is it is only the pilots or cadets whose parents can support them that can make the journey through in the world of aviation. VET FEE-HELP was introduced to help the VET sector in the training area that I am in. As far as I know, there may be one actual training organisation that is qualified for VET FEE-HELP. So the scope around qualifying for VET FEE-HELP is ridiculous. It may be available to the bigger universities and TAFE colleges that have the government’s backing, but there would not be a private enterprise training organisation that would not have some debt at the bank, and we do not make the financial requirements of VET FEE-HELP. Also, it is not the primary purpose of our business. It used to be. Five years ago we would have qualified for VET FEE-HELP as training was our primary purpose. But as the airline has grown, it is not the primary purpose of our business anymore, so that also stops our students from qualifying for VET FEE-HELP. The federal government could give us some assistance in enabling us to get the right people into training in Australia rather than the students with wealthy parents. There are a lot of good kids out there who miss out.

Senator XENOPHON —So it is an issue of equity of access, really?

Mr Sobey —Too right, yes.

Senator XENOPHON —Because you need to have access to a fair bit of cash to get the foot in the door, don’t you?

Mr Sobey —Yes. The Sharp’s course is $100,000. That is what it costs to become a fully qualified commercial pilot. It is about $100,000. It is not open for everyone to do it, that is for sure.

CHAIR —If you went to just an ordinary flying school, what would it cost?

Mr Sobey —To do a commercial pilot’s licence, you are probably looking at around $55,000 to $60,000 still. The problem is that—

CHAIR —You do not induce the culture, I realise that.

Mr Sobey —It depends what sort of aircraft you fly. We are flying twin-engined aircraft, and we take them right through into the turbo prop, the Metroliner. You can do a commercial pilot’s licence, the whole thing, basically in a 152 and cap it off in a 182, a small four-seater aircraft. So it depends on what sort of aircraft you are using and what sort of training you are doing as to the overall cost of the course. I am not against training in universities or TAFE colleges, but there is an inequity in training organisations. Having some money for their students is huge in Australia. It is available at the universities, but it is not available to the people who have traditionally trained most of our commercial pilots over the years.

CHAIR —A bit like training the nurses? The ones who were trained in hospitals seem to be better?

Mr Sobey —Yes.

Mrs Sobey —On that particular point, the reason that we do not qualify is that our principal purpose is not education. In the VET sector, the key thing that vocational training is meant to have is education and following on into employability skills. That is the actual point that we keep getting caught up on. We are actually better than universities. We have the training and the employability, and we guarantee the employability for the students that we have, yet it is the point that we think is the greatest point of the training model that we use, and that is the reason we do not qualify.

CHAIR —The job at the end of it?

Mrs Sobey —Yes, the job at the end.

CHAIR —I come from Junee and obviously I am very familiar with Rex and their set-up. Is it much different to yours?

Mr Sobey —No.

CHAIR —The great difficulty for you fellows and for Rex and all the rest of them is how you stop other people pinching your pilots.

Mr Boyd —Regarding the retention of pilots, the best way we can see to keep pilots is for companies like Jetstar, Qantas and Virgin to have their own cadetship programs. That way, they are not out poaching our pilots. I have discussed with Senator Heffernan in previous meetings the fact that in 2008 we had a 95 per cent turnover with our pilots.

Senator XENOPHON —Nine-five per cent?

Mr Boyd —Yes, 95 per cent in a 12-month period.

Senator XENOPHON —How many pilots did that involve?

Mr Boyd —Forty-odd pilots. We have probably lost 45 pilots in the last 4 years to Virgin alone, let alone Jetstar, Cathay, Qantas, QantasLink and many other airlines.

Senator XENOPHON —You obviously train them well.

Mr Boyd —Obviously. If you fly for Brindabella Airlines, that is your ticket into Virgin.

CHAIR —We really do not want to go back to horse and sulky, so we really do need to address this.

Mr Boyd —Yes. That is the best break we have had. Obviously the financial downside of the GFC was shocking for us, but at least it meant we kept our pilots. We only lost a handful of pilots over the last 18 months, which has been fantastic. It has also meant that there are some pilots out there with some experience that we can recruit as well. We also take guys from Sharp to have a mix within the crew.

Senator XENOPHON —Just to cut to the chase, you think that if the larger carriers had cadet programs that would take the pressure off the smaller carriers in terms of poaching?

Mr Boyd —Absolutely. As you heard Mr Joyce say, they will always have a mix. They will not just use their own cadets. They cannot provide enough crew to just use their own cadets. The bigger airlines will still take pilots from us, and that is good for us. People will come to work for us because they know there is a ladder to climb and they will move on.

Senator XENOPHON —But it is the mix?

Mr Boyd —It is the mix, and it is the retention over a period of time. I do not care if I have got a pilot for four or five years. If I have them for four or five years, that is great. For instance, I recruited a pilot the other day with 2,500 hours. He was with us; he was checked to line for six weeks before he got his job with Virgin. So six weeks, and he has gone to Virgin. There is no way in the world that I could recoup the cost of checking that guy to line, let alone the fact that—

Senator XENOPHON —How much did that cost you?

Mr Boyd —Probably in the order of $20,000 just to check into line. He was already a qualified commercial pilot with an instrument rating, et cetera, but to get him up to speed on the Metro and out there flying was around $20,000. There is no bond for that.

Senator XENOPHON —So about $3,500 a week for the six weeks he was with you?

Mr Boyd —Yes, a pretty good hourly rate.

Senator XENOPHON —One of the terms of reference was to look at 1,500 hours because of the Colgan Air tragedy in the US and the Congress move for 1,500 hours, subject to exceptions, of course. Are you happy with the currently minimum requirement of hours at the moment?

Mr Boyd —Absolutely. I have no problem with it whatsoever. We have a mix, as I said; we have pilots coming to us that have done the job in the bush with a couple of thousand hours, and we have people coming from Peter with 250 hours. Quite frankly, the guys coming from Peter with 250 hours that have been trained in an airline environment take a lot less time to get up to speed on the Metroliner and be out there flying the airline than the guy that’s done one hour 2,000 times over—

CHAIR —Dodging around things and bloody power poles in the bush.

Mr Boyd —Absolutely. It is totally irrelevant.

Senator XENOPHON —It is competency. What is the current requirement for a minimum number of hours? Is it 250?

Mr Sobey —Minimum for a commercial pilot’s licence, 150.

Senator XENOPHON —Is there a scale between the 150 and the 1,500 that you would feel more comfortable with, say 250 more so than 150?

Mr Sobey —No. CASA put in 150 hours as an absolute minimum requirement. We would not be able to get a pilot through in 150 hours. CASA has obviously put that in place to stop the ridiculous from happening, and that is competition from unscrupulous flying schools. You have to remember that CASA took a big step a few years ago, and so did the education of pilots, into competency based training. That is exactly what it is. The levels, the standards and the performance criteria are there for us. Our pilots move on through their commercial pilot’s licence, their instrument rating, their endorsements into the Metroliner as they become competent. There are defined levels there that we have to measure that.

Whether a pilot gets through in 250 hours or 300 hours depends on his ability and expertise in that particular aircraft. We must not go back to quantitative type measures in aviation where we say that a 1,500-hour pilot is more competent than a 500-hour or a 200-hour pilot. That is not what we should be doing in this industry. If you asked me if I am perfectly comfortable with a 250-hour pilot flying one of my Metroliners, if the captain beside him had a heart attack and passed out, most definitely. But if you asked me if someone flying a Metro had 1,500 hours, and if that was the criteria I was using to determine whether he could fly the aircraft, I would be most uncomfortable. I would have to have a look at the type of training and quality of training that he had.

Senator XENOPHON —My final point on this is that CASA says 150 hours; you cannot get your people through your training for less than 250. Should 250 be the minimum benchmark?

Mr Sobey —I apologise. The 150 hours is the bare commercial. When we are talking about 250 hours, we are talking about an instrument rating on top of that and the endorsement into the Metroliner, so there are a few other things.

Senator XENOPHON —That is a CASA requirement, isn’t it?

Mr Sobey —Yes. For a full-time commercial student, we go very close to that 150 hours. But that certainly does not put them in the Metroliner with that commercial licence.

Senator XENOPHON —But technically now they could?

Mr Sobey —No, they have to have an instrument rating.

Senator XENOPHON —Which requires 250 hours?

Mr Sobey —Which requires added hours on top of the 150, yes, and then they have to do their endorsement in simulators and in the aircraft on the Metroliner, the total of which is around 250 hours.

Mr Boyd —But there is no CASA requirement for 250 hours.

Mr Sobey —No.

Senator NASH —Just following up this 1,500-hours issue which I think is quite important, from what you are saying, I guess from your view it is quality, not quantity, it is about getting the right training for the pilots as opposed to just hours? I suppose you could kind of equate it to, in New South Wales, some of our learner drivers have to log 100 hours. If they are with a rotten driver, they are not going to learn very much, are they? So the hours themselves are not the quantifying thing? Under ‘(g), other related matters’, in terms of regional airlines, what do you see are your challenges at the moment for regional airlines compared to the major airlines? In terms of access to metropolitan terminals, do you have any issues there in terms of charges or how you are able to operate in those terminals?

Mr Boyd —We face huge challenges as a small regional airline. We have one flight out of Sydney. Most of our services are from smaller regional hubs to larger regional hubs and vice versa. I understand that we got the last slot out of Sydney in morning peak time last year when we started our Sydney to Cobar services. That is at 6.45 am, so if any other regional centres want a service, it will not be out of Sydney at a peak time in the morning or into Sydney at a peak time in the morning. We are also facing tremendous financial challenges with security in small country ports and the screening of aircraft. The biggest aircraft we operate is a 30-passenger British Aerospace Jetstream 41. It does not require check bag screening or passenger screening. However, if we are at an airport, for example, Tamworth, mid-next year when the Q400 will be required to be screened, we will also have to be screened. The trouble is we have to pass on that same cost that Qantas is bearing, because they have been legally obliged to do that. We are not legally obliged, only on the virtue that we are when they are there. We have to spread the cost over a far smaller operation and a far fewer number of passengers.

Senator NASH —What is the solution to that?

Mr Boyd —Probably segregated areas within the airports. No-one is going to pass a knife—

CHAIR —We raised this the other day, by the way, in estimates, because it is a problem.

Mr Boyd —Yes. If someone is boarding our aeroplane at the centre of the terminal, and there is a Virgin jet boarding at this end of the terminal, how are you going to pass a knife 250 metres up the tarmac?

CHAIR —Yes, we are going to figure it out.

Mr Boyd —That is the sort of thing we need. Currently in Canberra, we had a flight in from Tamworth tonight. We only do one flight a week from Tamworth to Canberra. It is more of a positioning flight for our Brisbane planes to get back to Canberra for maintenance. However, we have 14 passengers on that flight tonight. We have to put those passengers in a bus, take them out the gate at the airport, drive them down the road, up the street, and in through the main gate of the airport, because there is no means of bringing unscreened passengers into the new Canberra terminal that opened a few weeks ago. It is these sorts of things that the airports are grappling with, and we are grappling with them. They are just tremendous costs and burdens that we face on top of all these new regulatory burdens.

Mr Tyrell —I think the unscreened to unscreened for regionals is a very important issue. If you have to screen passengers, as Jeff said, there is a great cost. As airports are designed, as terminals are designed, sometimes things are missed. It is a dynamic industry. New routes might come in from an unscreened port, and all of a sudden our members are stuck. We say, ‘We have no facility to help you on this; you have to go through the screened area, and that is a cost.’ Or, ‘We will now build you an unscreened gate where you can just go straight through to baggage, but we are going to charge you for that.’ Our members are relatively small to medium-sized entities, and the costs of an airport shifting that cost to a member can be prohibitive and can kill the route straight off.

Senator NASH —The smaller airlines just do not have the economies of scale that the bigger airlines have.

Mr Tyrell —Correct.

Mr Boyd —That is the problem we have.

Senator NASH —We will definitely be following that up.

Senator O’BRIEN —Did Canberra Airport consult Brindabella about non-screened passengers?

Mr Boyd —They did not initially but we are in consultation with them now about it and coming up with the means of doing this. The new airport is a staged building. There are three stages of it. Within the second stage there will be a means of bringing in unscreened passengers, but unfortunately we just assumed that there would be a means of bringing in unscreened passengers. They forgot, and we are left to pick up the pieces. But we are working through a means at the moment, but currently a bus is the best means.

Senator O’BRIEN —Do you pay for the bus?

Mr Boyd —Yes.

Senator O’BRIEN —In terms of the dynamics of pilot training and career paths, has it always been the case that pilots have come through smaller regional carriers and moved up the scale to whatever the next step was, or beyond, with the ultimate aim of wanting to be a 747 captain?

Mr Boyd —Absolutely. That is the way it worked. The regional airlines were always the training ground for the Qantases and the Virgins. What we have seen in the last few years is this massive scale-up of particularly the low-cost carriers and this need for hundreds and hundreds of pilots, not a handful of pilots a year. For instance, my wife was formerly our chief pilot; she is now the managing director of the company, but when she started with Kendell Airlines she had I think over 3,000 hours. She had 3,000 hours flying night freight, flying in the bush, all sorts of things to get to a level where she could be accepted by Kendells to fly a Metroliner out of Adelaide. That has changed dramatically. People with those hours are not out there anymore. They have just been wiped out.

Senator O’BRIEN —In terms of people seeking training at that base level—in other words those who do not get the opportunity to go straight to a Jetstar training course or a Qantas training course—have the numbers declined?

Mr Sobey —Yes, there has been a huge slide in the number of people training to be pilots. It is interesting to note that, in the cadet programs at the universities at the moment, some 60 per cent of the students who finish a commercial pilot’s training course never ever fly an aeroplane. The biggest problem we have in aviation at the moment, if we bring in this 1,500-hour rule, is where we will get the pilots. Where does the gap get joined up between the 150-hour or 200-hour commercial pilot and the 1,500-hour pilot that is allowed to move into the airlines? Where do we fill that gap? There is nowhere in GA and commercial operations outside of the airlines that can fill that gap with the number of hours. If this 1,500-hour rule comes in for a first officer, Australia will have to find those pilots from overseas. They will have to be found overseas. They will not be here in Australia.

Senator O’BRIEN —What is the cost per hour of training for a commercial pilot’s licence?

Mr Sobey —In the plane?

Senator O’BRIEN —Yes.

Mr Sobey —It depends what plane you are flying, but it ranges from $250 an hour up to $500 an hour in the aircraft.

Senator O’BRIEN —So $250 to $500 per hour?

Mr Sobey —Yes, around about that sort of figure. Senator McGauran and others spoke before about putting 300-hour pilots into commercial aeroplanes. That is not right. We are putting 2,000-hour pilots in. I spend 65 weeks with my students, five days a week, eight hours a day training them. That is how much training goes in. More training goes into our pilots than in most university courses.

Senator McGAURAN —But flight time?

Mr Sobey —Yes, I agree, flight time, but that is not what makes a pilot.

Senator McGAURAN —It is so.

Mr Sobey —No, it is not.

Senator McGAURAN —That is how it is measured. That is how a pilot is measured.

Mr Sobey —No, it is not.

Senator O’BRIEN —When you get to your questions, perhaps you can interject, but I am asking the questions now.

Mr Sobey —No, it is definitely not, Peter.

Senator McGAURAN —I will not try to be a great expert.

Senator O’BRIEN —Do you agree with the proposition that an organisation like CASA should have special regard to the financial situation of an airline when they are assessing their safety situation?

Mr Boyd —I agree with what Mr Joyce said before. It does make a difference to the safety of an airline, obviously, if you are trading well. For instance, I would put an aeroplane on the ground and go home before I would shift on safety. If I could not afford to put an engine on an aeroplane, we would all pack up and go home.

Senator O’BRIEN —That is an important difference, because scrutiny does not mean there is a problem; it means you should look to see if there are problems, does it not?

Mr Boyd —Perhaps. I have no issue with CASA having a look at my books.

Senator O’BRIEN —I think there are operators who, history has told us, have been operating in circumstances where a wise person would have said, ‘No, we have to stop because we cannot afford to keep things going and pay the bills.’

Mr Boyd —It is pretty obvious. If an operator does not have the money, the first thing you will see is the plane is not painted, the seats are not reupholstered, the carpet has not been replaced. They are the sorts of things that they will shift on first because that is not a mandatory thing. If CASA is out doing its job, looking at an operator on its annual inspection or on a ramp check or whatever, there are some pretty good indicators that these people are starting to do it tough. As I said, they will not paint the aeroplane or replace the carpet, but they will still have a damn good engine there and they will still make sure the servicing is okay. They are the indicators you would look for first, I think.

Senator O’BRIEN —In terms of the situation in regional aviation at the moment with the pressure on pilots, what is your snapshot view of where we are with the viability of regional aviation in Australia?

Mr Boyd —At the moment it is quite dire. There are substantially fewer regional airlines than there were 10 years ago, and I would say in 10 years time there will be substantially fewer again. The smaller operators have been financially pushed out of business. Many, many towns in Australia that used to have a service no longer have a service. We are one of a few airlines, along with Sharp, that have reintroduced services to towns, for example, our Cobar service. Rex pulled out of it three years ago, but we have reintroduced it. But that is not the norm.

A lot of small towns are losing their service. It is all right if you have a gold mine in your backyard—you will get a service. But the people in Bourke, for instance, have to drive to Cobar to use our service to Sydney. There is the financial burden of regulatory costs. We have a lot of things on our plate at the moment. We have had to introduce safety management systems, human factors training, drug and alcohol testing. We have a new maintenance set of regulations that will start being introduced mid-way this year—so all new manuals for our workshop and new licences for all of our engineers. All of these things involve tremendous costs. Over the last 12 months I have said to CASA, ‘There has been all of this stuff in the back room waiting and waiting to come; just be careful how you roll it out, because over the last two years we have already had some pretty significant costs to bear with regulatory burdens.’ If they keep rolling out these costs, and keep going for the optimal, ideal safe situation, it is all cost, it is all a burden, and it will be the regional airlines that will suffer the most from having to pay these financial burdens for these regulatory costs.

Senator NASH —It strikes me that regional aviation is entirely different from the larger airlines in that there is what I would call a public good component in terms of the transport of professionals from metropolitan areas out to regions that are delivering health, education and a whole lot of areas, but also in reverse, in terms of people having to get to the cities with respect to health, for instance. Do you think government should be taking more into account the public good role that regional aviation plays?

Mr Tyrell —That is a very important point. ‘Regional aviation’ is a bit of a misnomer. On any one day, our members could be flying internationally—which might surprise the committee—right down to servicing Indigenous communities in smaller aircraft, taking in education or health staff, for instance. In between that, regional aviation is often shifting around professionals to the smaller communities across Australia. To be frank, I think regional aviation is the glue in this country. We have a huge land mass with a relatively small population, and aviation, particularly regional aviation, is how we shift our professionals and our services around. If we look at the recent flood disasters and cyclones, we see that when it really hits the fan the helicopter guys and our fixed-wing members are out there delivering services. There is definitely a public benefit component.

CHAIR —Finally, what is the minimum number of hours to get into the left-hand seat? What are they generally?

Mr Boyd —With our Metroliner, it is 2,000 hours; 1,500 hours to hold an airline transport pilots licence, but CASA has a requirement of 2,000 hours total time minimum requirement to be in the left-hand seat. That is for low capacity RPT, not high capacity RPT.

CHAIR —So the guy in the right-hand seat has to spend a fair bit of time in the right-hand seat?

Mr Boyd —The guys we take from Sharp will spend three to four years with us in the right-hand seat before they move across.

CHAIR —What do you think got into them over in the United States where they thought 1,500 hours was a good idea?

Mr Boyd —I have no idea. It is unquantifiable to just say that 1,500 hours is the magic number and that that will make everything safe. I do not understand why they chose that number. I would like to see their evidence that 1,500 hours will make it a lot safer.

Senator McGAURAN —Mr Sobey, I know that you run a great operation, and I have experienced first-hand your aviation judgment. Explain to me how flying time cannot be the prime benchmark criterion for experience?

Mr Sobey —For one, I do not believe that we should be judging people on experience as far as flying aircraft are concerned. We should be judging them more on the more scientific measure for each occasion, and that is a competency based training set-up, which we have now. You are saying to me, in other words, let us take a guy fresh out of school; he starts his life with Sharp Aviation; he spends 18 months with Sharp Aviation with intense training, five days a week, 40 hours a week for 65 weeks, and I have him at the stage where he is ready to move into a Metroliner. Or we take the guy who went out to the Black Stump Flying School, did 150 hours for the commercial pilots stamp, and then he goes out and flies joy flights around Ayers Rock for three years building up 1,500 hours with no-one there monitoring him, no-one maintaining standards and no IFR flight, and then we put him in the right-hand seat of a Metroliner.

Mr Sobey —What I do not understand is the 1,500 hours. I just do not understand where it has come from, and I never will. It is a backward step in measuring the quality of our pilots in Australia.

CHAIR —Thank you very much.

[11.08 am]