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Terms of reference for the Review of Airservices Australia [and ] appointment of new Chairman and five new members to the board.



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The Hon John Anderson MP The Minister for Transport and Regional Services

Airservices Australia

A178/2004 16

th December 2004

The Deputy Prime Minister and Minister for Transport and Regional Services, John Anderson, has appointed a new chairman and five new members to the board of Airservices Australia and released the terms of reference for a review of the organisation’s governance.

Airservices Australia is the government organisation that runs Australia’s air traffic control system.

The new chairman is Mr Nick Burton Taylor AM.

“Mr Burton Taylor brings many years of experience as a professional director to this role, plus a broad background in accounting, agriculture, aviation and commerce that will enhance the ability of the board to respond to the challenges of the future,” Mr Anderson said.

The Deputy Prime Minister paid tribute to Air Marshal Les Fisher AO, who was acting chairman for most of 2004 and will remain on the board as deputy chairman.

“Air Marshal Fisher provided leadership during a most difficult period for Airservices and his contribution is much appreciated by the Government,” Mr Anderson said.

The Deputy Prime Minister also announced the appointment of five new board members: Mr David Forsyth, Ms Christine Goode, Mr Henk Mertens, Ms Philippa Stone and Ms Alice Williams. The new appointments will take effect in January 2005 and will be for three years.

“I am very pleased to announce these appointments and am very confident that the new board members will make Airservices a stronger organisation, because of their breadth and depth of experience. One of the new board’s first major tasks will be the selection of a new chief executive officer,” Mr Anderson said.

The Deputy Prime Minister thanked outgoing board member Belinda Gibson for her service to the board.

The Deputy Prime Minister also released the terms of reference for an independent review of the governance, structure and organisational performance of Airservices Australia. The review was announced in the Coalition’s transport policy, Building Our National Transport Future.

"My objective is to improve the responsiveness of Airservices Australia to the needs of the aviation industry and the challenges facing aviation,” Mr Anderson said

"The Government is removing all regulatory functions from Airservices, so it can concentrate on its primary role: state of the art air traffic services that ensure the safe and efficient movement of passengers and aircraft. The regulatory responsibility for airspace regulation will be vested in a separate Airspace Directorate to be located outside of Airservices.

“The Government is also committed introducing greater competition in the services currently provided by Airservices, such as aviation rescue and fire fighting.

“Given these changes, I have asked the Secretary of my department to engage an independent consultant to advise on Airservices’ future governance and structure. The consultant will report to me through the Secretary; I will ensure that the Airservices board is appropriately consulted throughout the process,” he said.

The details of the new board and the terms of reference for the review are attached.

Media contact: Bill McKinley 02 6277 7680

Attachment “A”

NEW AIRSERVICES AUSTRALIA BOARD

The appointments announced today will take effect in January 2005, at which time the Board of Airservices Australia will consist of the following:

Chairman

Mr Nick Burton Taylor AM: Mr Burton Taylor is a professional director with over 30 years experience in accounting, agriculture and commerce. He is currently Chairman of the Australian Agricultural Company Limited (agricultural properties and cattle) and holds directorships in several companies including Rural Press Limited (publishing), Graincorp Limited (a public company operating in the NSW grain and bulk handling

system) and Hamilton James & Bruce Limited (a specialist recruitment company in banking and finance operating in Australia and New Zealand). He is also the Principal of Hillgrove Pastoral Company which is an agricultural investment and operating company with four properties in NSW and Queensland. He served as a director of the Sydney Airport Corporation Limited, Hazelton Airlines Limited and the Federal Airports Corporation. In 1998 Mr Burton Taylor was made a Member of the Order of Australia for services to business through the accountancy profession and to the rural community.

Deputy Chairman

Air Marshal Les Fisher AO (Ret’d): Air Marshal Fisher has been acting as chairman since February 2004 and continues on the board as deputy chairman. His current term expires in June 2006.

Ordinary Members

Mr David Forsyth: is a former senior manager at Qantas, and has extensive experience gained from the boards of several aviation related organisations. He has important skills in relation to aviation, finance, information technology and management.

Ms Christine Goode: is a former senior public servant, and brings important skills in risk management and leadership. She has skills in administration, finance, management, strategic planning and extensive senior executive experience.

Mr Henk Meertens: has been involved in recreational and sport aviation for over 25 years as an active aviator, and also in the administration and management of this aspect of the industry. His experience encompasses aviation, administration, project planning and board representation.

Ms Philippa Stone: is currently with Freehills, and is a highly regarded lawyer specialising in privatisations, mergers and acquisitions. She has extensive experience is

corporate reconstructions and also brings skills relating to finance, management and corporate governance.

Ms Alice Williams: is currently a consultant and was previously with Ansett. She has extensive experience in investment banking, strategy and policy development and in a corporate advisory role. Her skills cover funds management, government reviews, finance, legal, business regulation and reform, and investment management. She has extensive board experience.

Captain David Shrubb: was appointed to the Board in July 2000 and continues in his role. His term is due to expire in December 2007.

Chief Executive Officer

In addition, the Chief Executive Officer is a member of the board. The current CEO, Mr Bernie Smith, has announced his intention to retire in January 2005. The board will appoint an acting CEO until a permanent appointment can be made.

Attachment “B”

AIRSERVICES AUSTRALIA REVIEW TERMS OF REFERENCE

The Government is seeking to review the governance, structure and organisational performance of Airservices Australia. The objective of the review is to improve the responsiveness of the organisation to government, the needs of the aviation industry, and the challenges facing aviation.

The Government is removing all regulatory functions from Airservices so it can concentrate on its primary role: to provide state of the art air traffic services that ensure safe and efficient movement of passengers and aircraft and contribute to the growth and viability of the aviation industry. The regulatory responsibility for airspace regulation will be vested in a separate Airspace Directorate to be located outside of Airservices.

The Government is also committed to a goal of introducing greater competition in the services currently provided by Airservices, such as aviation rescue and fire fighting.

Given the above, the Government directs that the Review provide advice on the following:

• Airservices’ past and present operational performance in delivering its core business within the parameters set by Government.

• In light of the experience gained from, inter alia, the implementation of the National Airspace System and the development of a long term pricing proposal, identify any impediments, including legislative impediments, that may exist to Airservices being more responsive to:

 Government policies such as the need to maintain affordable aviation services in the regions and airspace reform; and  The needs of the aviation industry.

• Flowing from the findings made above, identify how those impediments can be effectively removed so as to strengthen the responsiveness of Airservices to both Government policy and the needs of the aviation industry.

• Pricing policies and the scope and potential benefits and detriments, given the Government’s broader policy framework, of the introduction of network pricing for some or all of the services provided by Airservices.

• The effectiveness of the governance and accountability arrangements for Airservices, and the best means of ensuring the independence of the board and its accountability to the Minister, including arrangements between the board, the CEO, the company secretary, Airservices management, and the Government.

• The effectiveness of the inter-relationship between Airservices and other Government agencies as well as the aviation industry in delivering the Government’s key policy objectives including the composition, role and sufficiency of any current consultative forums.

• The most appropriate corporate form and accountability arrangements for Airservices, given its role as the provider of essential airways services as well as the most optimal capital structure for the organisation.

• How to introduce competition in the services provided by Airservices, including an identification of which current functions could be rendered contestable and the best means of separating them.

• The need for any additional regulatory measures to ensure fair and effective competition between Airservices and other actual or potential providers as well as the continued provision of essential and affordable airways services in the regions and to constrain monopoly behaviour where it is not possible to introduce competition.

• The appropriateness of the institutional arrangements within Airservices for ensuring effective interactions on airspace management issues between Airservices and the Minister, the Department of Transport and Regional Services, a future Airspace Directorate and the Department of Defence.

The review should be guided by the principles adopted by Government following the completion of the Uhrig review of the Corporate Governance of Statutory Authorities and Office Holders.

It is envisaged that consultation with stakeholders such as airlines, airports and the general aviation sector will form an important input to the review. It is not envisaged however that the review would invite public submissions or conduct hearings.

The reviewer will be supported by a secretariat provided by the Department of Transport and Regional Services. Specialist advice or assistance may be sought on technical matters.

The review is to be completed and provided to the Deputy Prime Minister and Minister for Transport and Regional Services by 30 June 2005.

Bill McKinley Communications Adviser Office of the Deputy Prime Minister Leader of The Nationals Minister for Transport and Regional Services

Tel: +61 2 6277 7680 Fax: +61 2 6273 4126