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STANDING COMMITTEE ON RURAL AND REGIONAL AFFAIRS AND TRANSPORT
24/02/2009
INFRASTRUCTURE, TRANSPORT, REGIONAL DEVELOPMENT AND LOCAL GOVERNMENT PORTFOLIO
Civil Aviation Safety Authority

CHAIR —Welcome, Mr Byron and officers from CASA. Mr Byron, as per usual in senate estimates, we do invite you to make a very brief opening statement if you wish to.

Mr Byron —I actually said my goodbyes last time, but I do have a very brief statement to make which I am sure the committee will be interested in—and that is that, as you may be aware—I hope you are aware—in December our minister announced the appointment of my successor, Mr John McCormick, an experienced airline executive, operator and pilot, who takes over the organisation on 1 March, so not very far away. My term, as I mentioned at the last estimates hearing, was due to expire at the end of November, and I advised the government some time ago of my intention to serve my term and then depart. But I agreed to work with the minister to assist, to some degree, in the process of inducting the new chief executive officer into the organisation. I am pleased to inform you that over the last few weeks Mr McCormick has accompanied me to a number of the regular meetings that I have both internally and externally with other government agencies, and this week he is undergoing a fairly intensive series of briefings. As part of that induction program, he is also able to observe these proceedings.

CHAIR —Thank you, Mr Byron. I will go straight to questions. Senator Williams?

Senator WILLIAMS —Mr Byron, in the last six months or so there has been plenty of publicity about Qantas outsourcing its maintenance overseas. Is this a concern for your organisation or are you happy with the job that they carry out overseas?

Mr Byron —I will make some introductory comments and then I will hand over to Deputy Chief Executive Officer, Operations, Mr Quinn, in a moment. But the nature of your question was: am I happy? The fundamental issue of outsourcing maintenance is a long-term activity and practice in the aviation industry. The key to it is that the organisation conducting the maintenance has appropriate approvals. If they are looking after Australian registered aircraft that carry our fare-paying passengers, then our Civil Aviation Safety Authority takes a very active interest to make sure that that organisation, wherever it is, operates to an appropriate standard.

On top of that, the provisions of the Civil Aviation Act mean that the operator has a duty of care—a very serious duty of care—and some specific obligations to make sure that maintenance conducted on their aircraft operated under their air operators certificate are managed and organised by appropriately qualified people approved by CASA within the organisation. This is what we call the maintenance control function. So we take an active interest in all airlines and what they are doing. As far as the specifics of the question about the outsourcing, and Qantas does some outsourcing—a lot of airlines do some outsourcing—certainly I have no significant concerns about the practice.

Mr Quinn —On the specifics of your question regarding Qantas, obviously this was a topical issue last year—

Senator WILLIAMS —Exactly.

Mr Quinn —particularly following the review that we conducted. I think to put some context around what we are talking about for that particular operation, the typical Qantas outsourcing of its maintenance of its 737s, 767s and 747s runs around the 10 per cent mark. The majority of the maintenance is conducted on Australian turf, in Australian facilities, and when the capacity and capability of those facilities becomes maxed out they go offshore to a number of organisations, as Mr Byron said, that are certified by CASA. During the industrial problems that they had last year, I think that percentage shifted from about 10 per cent to about 20 per cent. As a result of that, CASA has taken an active role in increasing surveillance of the organisations that they use. There are about half-a-dozen organisations throughout Asia that they use and the audits that are being conducted by CASA do not indicate any significant problems with those stations.

Having said that, when the maintenance is conducted, a team typically comprising a dozen or so Qantas licensed engineers travel with that aircraft to oversee and ensure that the maintenance work is being conducted appropriately. So I believe that Qantas are taking a responsible role in how they execute that. They don’t have to do that; they do. That is the way their standards work.

Errors in maintenance, particularly, happen everywhere. They happen here. They happen in production. We have seen many aircraft, brand-new aircraft, come out of Boeing and Airbus with errors. From a CASA perspective, the process that the organisation has to rectify and look at these types of errors that either come out of their own shop or out of an offshore station, is a solid process. It is one that is used internationally—the MEDA, maintenance error decision aid, process. That organisation, I think, conducts about two or three of those types of investigations every week. Considering this is an organisation of several hundred aircraft with 6,000 maintenance personnel, you are going to see as part of the human error chain the odd problem.

Our plans to continue on that line of increasing surveillance on outstations will continue, in a slight different format. Previously, we used to audit specifically the heavy maintenance bases where the heavy maintenance is done on these aircraft. We have now taken that a step further in looking at the line maintenance type facilities across the network of the organisation. Obviously, we do not have the ability to look at the entire network, as it is broad. We select a few key points where line maintenance, the sort of maintenance that is done in turnarounds, is conducted, and CASA has added that to its surveillance work.

Senator WILLIAMS —The incident with Qantas where I think it was the oxygen cylinder that exploded, was it, in the bay under the—

Mr Quinn —That’s correct, yes.

Senator WILLIAMS —What was the cause of that? Was it just a freakish event? What were the findings of that inquiry into that?

Mr Quinn —I have seen the preliminary report from the ATSB, the Australian Transport Safety Bureau, who are following us. So they are probably best placed to look at that. But if there was a specific determination that it related to a failure of the bottle, or of a component of the bottle, that would be quite detailed from a technical perspective. But there are no other adverse findings that should affect the continuing airworthiness of the 747 fleet.

Senator WILLIAMS —Just on a personal note more than anything, I have not done a lot of flying in my life—I have certainly done more in the last eight months than I have done in the rest of my life put together. How is Australia’s air safety record overall? I know it is very good. Are there many incidents or near misses on approaching airports and that type of thing? Have there been any near misses of late that have been of concern to you or are you happy with the way the whole safety structure is running at the moment?

Mr Quinn —Were you talking about regular public transport operations?

Senator WILLIAMS —Yes.

Mr Quinn —The system is safe. CASA’s line is that, if we didn’t think it was safe, we would be doing something about it. Near misses, whether they be near misses in terms of some type of failure on an aircraft or near misses in terms of a physical breakdown of separation, every failure in the system is taken seriously and we have a close cooperation with the ATSB. That is a much improved relationship in terms of information sharing and trying to understand some of these problems.

It is an industry that has some risk associated with it, but I think our performance internationally is second to none. The record speaks for itself in terms of the accident rate, particularly involving RPT operations. If you look at the international statistics, which were just launched recently by the International Air Transport Association, you will see an accident rate of about 0.8 per million sectors. In Australia, it typically is a big zero and we ensure we keep that record where it is.

Senator WILLIAMS —Yes, congratulations. Our record is obviously probably second to none in the world. Just on another issue, about training pilots, I note that from the start of this year student pilots must meet new English language standards. Previously, could they fly without understanding English?

Mr Byron —I might ask Mr Carmody, Deputy Chief Executive Officer, Strategy and Support, to answer that one.

Mr Carmody —No, Senator, they could not fly without understanding English. But we have made the system more rigorous. The International Civil Aviation Organisation last year implemented standards for pilots around the world with a language rating scale of six levels. That was a very broadbrush approach. We went one step further here in Australia because there are a lot of training activities of non-English-speaking students. We implemented it within the student pilot regime as well. We have gone further, in fact, than most other nations.

Senator WILLIAMS —That is about all I have. My mother’s maiden name is Carmody, so we might be related somewhere down the track, Mr Carmody.

Mr Carmody —We may well be.

Senator O’BRIEN —I know there are others with some questions but given they are not here I will ask a few to keep the witnesses before the committee while we are waiting. There has been some publicity about a directive issued to Qantas about the qualifications of certain of their employees. I believe, Mr Byron, you signed a directive to Qantas on 5 February this year. Is that right?

Mr Byron —I certainly signed a directive, Senator. I would have to double-check the date, but it is around about that time frame. That is correct.

Senator O’BRIEN —Has that directive remained in the form you signed it on that date?

Mr Byron —I have the directive in front of me, Senator.

Senator O’BRIEN —It has not been amended?

Mr Byron —No.

Senator O’BRIEN —I was trying to make some sense of it when I saw it and there seems to be some problem with the language. Who drafted it?

Mr Byron —Senator, can I ask what is the problem?

Senator O’BRIEN —I am happy to go through that but I just wanted to find out where the drafting was done. Was it in-house or did you have someone out of house do it?

Mr Byron —No, it was done in-house, Senator.

Senator O’BRIEN —There seems to be a word left out in direction 1, subparagraph C. Should there have been an additional word at the beginning of that paragraph, such as the word ‘are’?

Mr Byron —The stem that relates to that subparagraph, if we are on the same page here, says:

… held by all of the operators personnel who—

and then we go onto (c)—

authorised to approve the design …

Senator O’BRIEN —’Who authorised’ does not really read very well, does it?

Mr Byron —I accept that it could be clearer with the word ‘are’ in there to say, ‘Are authorised’.

Senator O’BRIEN —It may seem like nitpicking but ultimately enforcement will lead to some need to interpret what this was intended to mean.

Mr Byron —I accept that, Senator, and I accept that it could have been clearer with the extra word in there. However I would say this particular issue needed to be dealt with promptly, and it was dealt with in the time frame that I required, which was a pretty short notice. In my discussions with the operator, they are in no doubt as to what they are required to do.

Senator O’BRIEN —I think I understand what you were intending to do but this is a legal instrument, isn’t it?

Mr Byron —Yes, it is, and I accept that comment.

Senator O’BRIEN —Presumably it was drafted up in your legal section.

Mr Byron —Yes, it would have been.

Senator O’BRIEN —Another issue that seems to arise is that direction 1 requires an audit of persons who hold CASA licences and authorisations. What about those who do not?

Mr Byron —At the time the purpose of this was to target people who Qantas believed to be approved by Qantas conducting maintenance as part of their normal procedures. If I may, I might ask Mr Quinn to give it a bit more detail.

Mr Quinn —Yes, Senator, I had this discussion with the team, and also just to reinforce what Mr Byron said, the operator is certainly under no illusions as to what we are trying to do here. I understand your point. The difficult part of that is this is an organisation containing about 2,000 licensed engineers and about 6,000 maintenance personnel. How do we audit is what we do not know, basically. So the purpose of the direction was threefold. Firstly, to address the actual licences and make sure they have got a problem. Bear in mind that this was the second type of event. The first incident involved a different scenario, but someone actually cooking up their qualifications. It was not the case with this one. But we thought, given what had gone on, it was appropriate for us to look at them checking the licences, checking the validity of the licences and tell us what is going on. The second point, which is probably more important to this latest event, involves the operator Qantas being able to demonstrate to us that they have an adequate system in place to ensure that those people who are performing and particularly certifying maintenance for this aircraft, are actually licensed.

In this latter case the individual involved had basically tricked his supervisor as to his capability and his licence status, and then he was therefore out there doing the odd work here and there very, very sneakily. The last part and probably the most important part of it, hence the urgency with which the directive was issued by Mr Byron, was to understand—and this is an enormous amount of work—we required them to go back several years through their records to establish what work this individual actually signed off on, that is what certifications were done and understand the risks associated with those. Were they significant certifications of the things that may affect the safety of flight, or were they minor issues in a cabin, for example, understand what those are and recertify the aircraft. At this stage I believe they have gone back to about 2004.

The signatory process appears to have started in 2007 and they are satisfied that all of the fake certifications or false certifications have been validated. The aircraft have been recertified. They found nothing significant. However, the point for us at the moment is that we are requiring them to conduct a detailed risk assessment, which is currently underway within the organisation, to be able to demonstrate to us that the system does not have any holes in it. This is a legacy operation that is dealing with some legacy process and that needs to change. I believe that the risk assessment process is currently underway.

Senator O’BRIEN —Is this a process that fills gaps that CASA’s previous oversight of Qantas may have left? In other words are you catching up with this directive on what some people have said is a lesser level of scrutiny of Qantas than might otherwise or should otherwise have occurred?

Mr Quinn —I understand your point. The important thing to understand is it is the responsibility of the operator to ensure that the competency and validity of their licensed staff are in place. For CASA to be activity monitoring 2,000 licences on a daily basis from a shift point of view would be impossible, therefore, we require them to have the appropriate processes. Surveillance has been conducted in the past but when you are doing random surveillance that is hit and miss on a large number of people you are never going to find the rats in the system.

Senator O’BRIEN —Mr Klein gave evidence to the Senate inquiry last year that he thought the level of scrutiny of Qantas was inadequate given that the number of CASA personnel scrutinising a large operation led to the inevitability that you could not properly scrutinise it. That is why I asked the question: are we now in the process of issuing a directive to try and catch up because we have found that there have been gaps in the system? Are we now issuing a directive to try and catch up on holes in the system that have appeared through a less than adequate scrutiny process in the past?

Mr Quinn —Senator, if I did have additional resources, at the end of the day I need to make a judgment call on how we utilise those resources and where we target them from a risk perspective. To be frank that issue would not rate highly in where I would use the additional resources in terms of risk.

Senator O’BRIEN —Because you did not think this would happen?

Mr Quinn —It is not that I did not think it would happen, I just do not see it as one of the high risk areas.

Senator O’BRIEN —Your perception of risk proved to be incorrect because what has been happening, there are now two instances of a person without qualification certifying aircraft in the Qantas fleet, so your perception of risk was wrong.

Mr Quinn —My perception of where the—

Senator O’BRIEN —Or is that an acceptable level of risk?

Mr Quinn —My perception, you can call it flawed if you like. There are probably a lot of other things out there in that industry that I definitely do not have a crystal ball to be able to predict some very unusual things, particularly when you are dealing with activities like this. This is not accidental. We are dealing with intent here, and human beings dealing with intent, that is a difficult thing for me to regulate or manage. The focus from a risk perspective is more on the accidental—what protections, what error tolerance systems we can build into the regulations, and therefore provide adequate oversight from that perspective.

Senator O’BRIEN —But doesn’t that indicate the flaw in the risk management approach, because what you are saying is where human intent to get a personal advantage comes in, you cannot make a judgment about where that risk will occur?

Mr Byron —Senator, if I might just add a view here. There are many, many issues that occur in an operation and in a maintenance organisation that have the potential to affect the safety outcome. Some are covered by regulation, some are not. There are a lot of things in the air transport industry that the industry has to deal with. They change on a daily basis. In terms of a large organisation like Qantas, oversighting recruiting, training and oversighting people with allegedly CASA approvals, small organisations that may not have fairly robust systems or levels of checking may end up taking a different approach to a large organisation like Qantas, which then will reflect how CASA will react. With a large organisation like Qantas they do have systems in place. They have verification processes for checking people when they recruit them, train them, and that sort of thing.

Senator O’BRIEN —But, Mr Byron, we have discussed this a number of times. I think the point that is arising, and we have got limited time, which is why I am trying to perhaps abbreviate things—

Mr Byron —Yes.

Senator O’BRIEN —And I know you have got limited time, which is why I am trying to abbreviate things, is that in this case the judgment of risk which directed CASA’s allocation of staff has seen this problem slip through. The question that I was asking Mr Quinn was, if you cannot really make your judgments of risk based on these sort of individual, personal, gain-seeking behaviours, is that a flaw in your system of risk management?

Mr Byron —In my view, Senator, any system will not be 100 per cent perfect. I think I have said before that aviation safety cannot deliver absolute safety. There are always going to be variables and risks in there. I think to a large extent this comes down to behaviour, and influencing behaviours is something that we need to be doing. The reason for the directive was because we wanted this operator to take this issue very seriously with all its staff. Why? Because we had two incidents. We have not issued the directive to other operators. I would hope that that behaviour is not widespread. But your broader question is, does this require us to look at our approach to this issue and the risk it presents? Of course, yes, I would accept that, and certainly in the processes of planning oversight of the air transport sector, I would expect Mr Quinn to certainly be taking this issue and what lessons can we learn from it. We certainly sit down as a management group on a quarterly basis and look at a lot of information that we have access to and say, ‘Well, okay, how is CASA responding to the safety outcomes that are being delivered out there?’ Certainly this sort of compliance issue is on the table for the next round of discussion; I accept that.

Mr Quinn —Senator, if I can just add to that, I think it is important to note here that it actually was the operator’s system that did detect both of these.

Senator O’BRIEN —Well down the track.

Mr Quinn —Well down the track, yes, unfortunately down the track. It had been operating, particularly with the second case, for several years.

Senator O’BRIEN —The system had failed to a serious extent.

Mr Quinn —Their system had failed, and as we expect the industry to be always working on continual improvement, so are our systems, and hence to gain confidence in the operation the direction was issued to ensure that their system is right. We will now go away and have a look at our own process.

Senator O’BRIEN —So direction number 1.2 required them to tell you who was acting beyond their qualification on 27 February, and presumably that was intended to be enforceable?

Mr Quinn —Correct.

Senator O’BRIEN —Which year?

Mr Quinn —I have not got the instrument in front of me.

Senator O’BRIEN —The instrument does not specify a year.

Mr Byron —Certainly the intention was this year.

Senator O’BRIEN —But you could not enforce it, could you?

Mr Quinn —I can comment that, although I do not have this formally from the operator, the process of the 2000 licences has been conducted and there are no other—

Senator O’BRIEN —That is good. You will not have to try and enforce it because you could not. That is realistic, isn’t it? When you look at those words, there is no year.

Mr Quinn —No.

Mr Byron —Your point is taken, Senator. The intent of the instrument was to get the activity done because we had already written to all operators after the first incident, to all operators, and after the second incident we wanted the checking done. To enforce it, yes, we take your point. But the first step of actually getting the work done was done.

Senator O’BRIEN —My father used to say to me, ‘More speed, less haste.’ It seems to apply to this directive, doesn’t it?

Mr Byron —To a degree. I think the important thing—I wanted this work done on the day we issued the directive and the work started, so I would debate that on this particular case. We cannot afford to sit around for too long before we take action.

Senator O’BRIEN —No, no, but you know what I mean. If you are going to issue a directive, you do not want to have to come back and reissue it when you find it was faulty.

Mr Byron —I am sure we will learn from this experience.

Senator O’BRIEN —I hope so. I do not have any more questions unless something else arises.

CHAIR —Thank you, Senator O’Brien. Senator Heffernan has one or two in wrapping up.

Senator HEFFERNAN —No, he does not.

CHAIR —Thank you very much, Mr Byron and the officers of CASA. Mr Carmody, could you hang back for five minutes, thanks.