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Administration of the Civil Aviation Safety Authority

CHAIR —I welcome representatives from the Australian and International Pilots Association. I invite you to make a brief opening statement before we go to questions.

Capt. Woods —I would like to start by thanking the committee for inviting us here to make our presentation this morning and by commending the government for having the foresight to call this inquiry at a very timely point in the development of Australia’s and the world’s aviation. I will start by saying a little bit about AIPA. It is the representative organisation for Qantas Group pilots. That includes all Qantas international and domestic pilots as well as some members in Qantas Jetstar and in QantasLink. That gives us a breadth of representation from regional operations to international operations and ultralong-range operations.

Personally, I started flying with the Royal Australian Air Force in 1970. I enjoyed a 21-year career there, including 14 years in the Air Force Reserve flying concurrently for Qantas and the Air Force. The Air Force was an interesting organisation, and it is relevant, I believe, to what we are talking about today. I started with a squadron where maintenance was integrated in the squadron itself. As a pilot, I often worked alongside engineers in doing relatively large maintenance tasks such as changing engines and propellers, so that gave me a foundation in what I believe the maintenance practices were in the Air Force at that time and what the maintenance practices were at airlines like TAA and Qantas. I went to TAA, where we had depot level maintenance, so the association with the maintenance part of the company was not there. Of course, we found ourselves in Qantas, where I have been for nearly 30 years now and where we are looking down the barrel of globalisation.

With me today is our general manager, Peter Somerville. While Peter is not a pilot, he does have extensive risk management experience in representing doctors. Believe it or not there are a lot of similarities between airline safety and hospital safety. Interestingly, there are more fatalities in respect of hospital safety than there are with airline safety. There is a lot to be learned from what has gone wrong with the hospitals. Peter has been there at the coalface and will make a genuine contribution to this inquiry.

Why we are here is to try to put to the committee where we have been, what we have observed and what we see unfolding in the future. If we look back on aviation in Australia, we have had some of the best aviation standards in the globe. That is attributable—and I have heard this said by many eminent people—to the fact that we have airlines grounded on government largesse and military standards. As James Strong said, when TAA and Qantas were merged and privatised, ‘The challenge in the future is to turn a great airline into a good business.’ And that is the dilemma that faces the industry, the nation and the globe going forward: where do we strike the balance between commercial pressures and operational safety?

At the present time in Australia, CASA is moving to outcomes based audit results rather than in-depth regulatory oversight. I note what was said by the previous participant here and I concur with much of the sentiment expressed there. At the same time, we have the deregulation of the global industry, which will surely impact on Australia. The advantage of being a Qantas pilot is that you interact with the world’s pilots, whether they be in Canada, the US or the UK, and much of what is going on in Australia was unleashed by Jimmy Carter in the US in the late 1970s—the deregulation of the industry, the move to oversight provisions by the regulator. They had their trials and tribulations, and I believe they tightened up significantly on the way the FAA carried out its maintenance obligations. So, with that in mind, that is the basis of the submission we have put to the committee. I will hand over now to Peter to give some more detail on that general oversight, and I will then make myself available for questions from the committee.

Mr Somerville —I will be brief as the committee has only just received that submission. The overview, as Captain Woods just said, is this tension between economic liberalisation of aviation and, at the same time, CASA’s moving to an outcomes based system of regulation. Operators naturally have commercial interests, which is proper, and it is in the interests of pilots to see an expanding industry, because it means more and better jobs. That, essentially, is the tension that runs its way through our submission. We have then turned to address the terms of reference, in particular the first issue about the management structure of CASA. In short, the transition from what was prior to CASA a Public Service department to a statutory authority—and then, since 2003, having a sole CEO—has made CASA more responsive in many ways but, in our view, often that responsiveness has been to commercial operators. It is now time—and it is one of our recommendations—for a board to be reintroduced for CASA, made up of a small number of people, possibly five, who can be and are respected across a cross-section of the aviation industry, including pilots.

The second term of reference deals with an examination of the effectiveness of CASA’s governance structure. Our submission has gone to two elements we have picked out as good and strong items of proper corporate governance: integrity, and the integrity with which CASA deals with its stakeholders, including pilots and the difficulties they have faced. We have given examples in the submission but two examples in particular are CASA’s dealings with recent issues of the multicrew pilot licence and flight deck duty time.

We have, to be honest, struggled at times with the processes that CASA has used, particularly with regard to the multicrew pilot licence, which has been the subject of some discussion before this committee previously, particularly in regard to the way that AIPA and the International Federation of Air Line Pilots Associations have found it difficult to try and get sensible results regarding a new concept. It involves essentially synthetic training—moving away from the traditional training based in aircraft and on to simulator based training.

Senator HEFFERNAN —Hear, hear!

Mr Somerville —That has been difficult for us. The second element that we wanted to go to with regard to governance dealt with the transparency of CASA’s processes and, in particular, the difficulty pilots have had with consultation. The examples we raised there were regarding the disallowable instruments process, where, although this dealt with cabin crew numbers on several aircraft, CASA moved to allow the operators a concession in that regard. The consultation they did was with the operators and excluded not only the pilots but also the cabin crew. That was simply announced. In their recent advice to the current minister, CASA advised that they believed that that level of consultation was, to use their words, ‘appropriate’. That is another example of the difficulties we have had.

The last thing that I wanted to go to, and which just touches on some of the recommendations, was with regard to the alcohol and other drugs project and the introduction of mandatory testing by CASA, which many senators would be aware of. In fact, when I think about it now, AIPA was excluded from the project team. The largest representative of airline pilots in the country was excluded from the project team developing this project. CASA’s reasoning was that there were other representatives of flight crew, meaning cabin crew representatives. In our view, that was petty and retributive treatment of the pilots association. Subsequently, I have to say—and I am proud to say—that AIPA participated as an observer. From my perspective, we made the most significant contribution to that project team. The important thing from the pilots’ point of view is that we were able to contribute that expertise, but it just demonstrates some of the difficulties we have had in the relationship with CASA.

CHAIR —Have you been invited onto the project team since then?

Mr Somerville —No, the project is almost—

Senator HEFFERNAN —This is the drug—

Mr Somerville —Mandatory drug and alcohol testing.

Senator HEFFERNAN —You do not oppose that, surely?

Mr Somerville —Not at all, but we wanted to be part of developing the regulatory framework. For instance, there has never been an accident involving a regular public transport service in which an airline pilot’s use of drugs has been identified as a causal factor. That is our position. It is not an issue for us. We understand that, and we were not seeking exclusions at all. We understand that pilots have a role to play in these things and need to be part of it.

Senator HEFFERNAN —I assume that, like bankers, there are plenty of pilots who take recreational drugs.

CHAIR —Mr Somerville, thank you for your opening statement. Have you finished your brief opening statement?

Mr Somerville —The last two points were just to deal very briefly with a couple of the recommendations. Recommendation 2, which is on page 14 of the submission, goes to the board. We emphasise the fact that, if a board were to be constructed or reintroduced, it should have board members who are widely respected by a cross-section of aviation stakeholders. The last point we would like to make in this opening statement concerns recommendation 3. We talk about the CASA industry complaints commissioner being established as a separate statutory office and given powers to investigate and report to the CASA board and to the minister. We would like to emphasise that we regard that as an important confidence-building measure to deal with CASA going forward. Our experience with the current complaints commissioner is very positive; it is just that he lacks any enforcement powers or ability. I refer senators to the issue regarding flight-deck duty time, which is set out in the submission.

CHAIR —Thank you very much, Mr Somerville and Captain Woods. We received your submission some five minutes before the completion of the previous witness’s evidence. I am just briefly going over the opening. There are some scathing comments, and I am sure it will generate some questions.

Senator O’BRIEN —Your covering letter, Captain Woods, says: ‘AIPA has focused attention on CASA’s independence from the industry it regulates and the effectiveness of compliance enforcement systems. Unfortunately, AIPA believes that CASA has not met the required standards in these critical areas and is unable to act as a necessary counterweight to balance shifting economic and regulatory frameworks.’ Does that mean that you think CASA is too close to the industry?

Capt. Woods —I put this back to the role that I understand the previous government had CASA do, which was to attempt to balance its regulatory obligations with commercial realities. From the pilots’ perspective, that has resulted in some confusion of CASA’s role. Some people would say that it is never possible for the one organisation to balance safety regulation with commercial necessity and they should be separated. That is the basis for that. A number of occurrences I have personally witnessed lead me to conclude that CASA gave due consideration to its obligations there and at times confused those obligations and was not clear and definitive enough in standing up for safety regulation.

Mr Somerville —From our perspective, yes. The example to go to in the submission is flight-deck duty time. We have consistently over a period of three years brought this issue to the attention of the regulator—

CHAIR —How many times, Mr Somerville? Just off the top of your head.

Mr Somerville —Three, four, five, including interviews with the deputy CEO and elsewhere. We have brought it to their attention and they have failed to act, on the basis that they say there is another system to be introduced shortly. That other system to be introduced shortly—a fatigue risk management system—has been ‘shortly to be introduced’ for the last three years. We cannot understand that. The only people that failure to enforce benefits are the operators, who would have to have additional crew on those rostered flights. The flight-deck duty time provisions currently do not allow them to go beyond certain hours.

Senator O’BRIEN —So you are saying that CASA has specifically declined to enforce a regulation and justified that inaction by saying, ‘We’re going to change the system imminently.’

Mr Somerville —That is correct, yes.

Senator O’BRIEN —And they have been saying that for how long?

Mr Somerville —Three years.

Senator HEFFERNAN —What risks does that create for the flying public?

Senator O’BRIEN —Fatigued pilots.

Mr Somerville —Correct; fatigued pilots.

Capt. Woods —I will comment on that because I can see the worrying look in your eyes, Senator. Whilst the flight-time duty limits may not appear to be overly onerous on their face value—

Senator HEFFERNAN —What are they, by the way?

Capt. Woods —They can be up to 16 hours, depending on the number of crew, and they may be as short as nine hours. When that is taken in conjunction with splitting them and giving pilots flying back of the clock with daylight rest, that is fine. If everything goes fine and the weather is good on the other side of the nation or the world, the chances of getting a bullseye are low. But it is when the weather is poor and that is coupled with a mechanical abnormality—and Qantas had one very recently in Frankfurt; it was a poor performance by the pilot. Some of that comes back to fatigue. If you push the envelope of fatigue and things stack up against you at the other end, you are beyond what the level of accepted safety is. From my personal experience and our perspective it is not adequate to say that this looks okay, it looks reasonable. It is reasonable most of the time but aviation safety is not just about adequate, reasonable standards; it is about public confidence in a system which has stood close scrutiny.

Senator HEFFERNAN —What is the solution? If I have had a 21st birthday party for my daughter over the weekend and I have to fly to London and when I get halfway to London I am buggered, what is the solution?

Capt. Woods —The solution is to ensure that the crewing on board the aeroplane—the number of pilots to provide in-flight relief—is adequate, that the amount of rest—

Senator HEFFERNAN —And is that not the case now?

Capt. Woods —That is the debate here. It is by and large the case, but on this occasion where we have pointed out to CASA that the flight-time duty limits exceed what is in the legislation we say that it is there for a very good reason. It has not been scientifically shown—

Senator HEFFERNAN —And do they exceed the—

Capt. Woods —Yes, they do.

Senator HEFFERNAN —Is that putting lives at risk?

Capt. Woods —Anything that exceeds the regulations puts a life at risk. It is the whole debate as to how—

Senator HEFFERNAN —Can you give me a touch and feel example of how they exceed the limit? What is the limit? Are you allowed to fly eight hours—

CHAIR —Sorry, Senator Heffernan. We did extensively cover flight-deck duty time in Senate estimates. I will forward the Hansard to you, only because I am mindful of the time we have. I am also mindful that we will be asking CASA the same damn questions we asked them in Senate estimates and it will be coming back.

Senator O’BRIEN —In essence, after repeated requests, you have had no response. That is one example. I think you are suggesting to us in your recommendations, particularly your fourth recommendation, that the government take some action to change CASA’s approach to its compliance and enforcement systems. I will not use your language. I have truncated your passage in that way because I think that is the nub of what you are saying, is it not?

Mr Somerville —It is, but it is against the background that we acknowledge that CASA has a difficult job but we think they are not doing it well. We know it is a difficult job and one of the problems is with regard to not only their internal processes for compliance and dealing with the operators but the next step on from that as well, which we have not gone into—that is, comparing them to the FAA in the United States and their ability to find operators and do those sorts of things. The current compliance regime that CASA has available to it can be difficult, complex, costly and litigious. They need, in our view, what looks like some shorthand measures to get stuck into operators.

Senator O’BRIEN —Are you saying that CASA is operating at a level below the FAA in terms of their enforcement and compliance actions?

Capt. Woods —I think it would be fair to say that the amount of resourcing the FAA has is significantly more. The standards that the FAA seeks to enforce are higher and the penalties for noncompliance are significantly higher.

Mr Somerville —We cannot remember an occasion when CASA has fined an operator. It is not a regular occurrence for the FAA either, but we know that they do. They talk in the millions when they issue fines. These are the sorts of things we are concerned about, put against the background of our experience when we have brought matters to CASA.

Senator O’BRIEN —I understand the FAA was the subject of a bit of a jolt from their legislature recently because of the way they related to their industry. Nevertheless, you say, if I understand your answers, that our regulator is applying a less rigorous level of regulation to the industry than the FAA.

Capt. Woods —To be fair, the most serious concern is the real potential going forward with the way CASA is set up to operate shortly, which is self-monitoring by the airlines. When that is combined with global deregulation, the American experience has shown that that kind of system falls short of the current high standards that the travelling public has come to accept as normal.

Senator O’BRIEN —Do you believe that in the current environment of rising fuel costs the challenge for the regulator is greater and that there is more likelihood of corners being cut by operators?

Mr Somerville —That is essentially the theme of our submission, Senator, which is that economic liberalisation is increasing competitive pressures between operators in the circumstances of introduction of outcome based regulation by CASA. Inevitably, that means operators will look to shave, look for efficiencies. We do not say that that should not happen, but in the context of outcome based regulation and a regulator who we say lacks the will to take these people on, we have a problem.

Senator HEFFERNAN —Is the fantasy in all of this, though, really that everyone wants something for less? The customer wants to fly cheaper and at some point we all have to pull up and say: ‘We can’t do this anymore. If you want to do that, you have to pay more.’ Just like the food in the fridges, we are getting to that point. There must be a point when, at the balance you talk about, we say: ‘I’m sorry, but you can’t fly to Port Douglas for $100. You’ve got to pay the real cost.’

Capt. Woods —I think that is a very honest understanding.

Mr Somerville —We have never had that explicit debate in this country. Low-cost airlines are low cost for a reason. There are different standards between the different airlines. None of them go below Australian minimum standards so far as we can tell, but some have higher margins and standards than others.

Senator O’BRIEN —I suggest to you that the travelling public believes that low-cost airlines are providing a lower level of service, not a lower level of safety.

Capt. Woods —That is what the public believes, but I would say that the global experience does not support that.

Senator HEFFERNAN —You can say that again.

Capt. Woods —If you look at the number of incidents, I say that the global experience of the safety records of low-cost airlines is not as good as that of established-legacy carriers. If you look at the incidents that have taken place in Thailand and in Greece, they are inevitably low-cost carriers. The rate of accident occurrence, anecdotally, is that they are well below, in the outcome, established carriers, but they are still acceptable nonetheless.

CHAIR —Senator O’Brien certainly was not suggesting that.

Senator NASH —I want to talk briefly about your recommendation of the establishment of a board. The intrinsic question there is: what is it about establishing a board for CASA that would improve the process?

Capt. Woods —Being a president of a union, I think I can say that, when you are a single person charged with making some very complex and difficult decisions and subject to very powerful persuasive forces from both sides, the confidence to stand by a decision which is either tough regulation-wise, such as grounding an airline, or tough commercially, such as making them raise the price of their tickets, will benefit from the support that a well-informed and well-intentioned board, properly grounded with the necessary experience, will provide to the CEO. In essence, a board provides an ability to operate independently, with confidence and in the public interest.

Senator NASH —Do you think one person currently has too much autonomy?

Capt. Woods —One person has too much burden, too much responsibility.

Senator NASH —So it is very much from that burden of responsibility perspective that you are speaking.

Mr Somerville —The other point is that, as we have said, we see a small board, possibly five in number, which would have at least some board members who have experience in the industry. Some may have experience from another industry. But, from our perspective, we want to restore some confidence and apparent confidence in CASA, and we see the introduction of a board as assisting in that, as well as providing some additional expertise and support to the CEO.

Senator NASH —So this is really to assist with the burden of deliberation and decision?

Capt. Woods —Yes.

Senator HEFFERNAN —So would the board’s role be to set the parameters of policy and the CEO’s job be to implement them, as we have in local government now?

Capt. Woods —I think it would be very similar to local government but, nonetheless, the board is responsible for providing the will—Peter mentioned that word—for the CEO to act according to the charter of the organisation. Once the government clarifies the role of CASA, the CEO still needs to have the will to act, and my experience is that a board provides that support, ensures that will to comply with the charter and will be helpful to the safety standards of aviation.

Senator HEFFERNAN —Regarding your comments on the drug thing, the last time I talked about it at this committee, I said I would be quite happy for everyone who walks into this building to be randomly drug-tested at the door. I think we should apply that to judges and lawyers, as well. I have no trouble with any of that. You say that there has not been an accident related to drugs in the aviation industry—

Mr Somerville —Regular public transport.

Senator HEFFERNAN —Regular public transport—except perhaps alcohol and a few bus drivers being at work drunk.

Mr Somerville —Sorry; regular aviation.

Senator HEFFERNAN —Okay. But surely this is a pretty tricky social question, because there would be plenty of people in this building and plenty of people in your industry who are regular recreational drug users.

CHAIR —That is a far-ranging accusation, Senator Heffernan. If you have a question to put to the Australian and International Pilots Association, please ask it.

Senator HEFFERNAN —Do you think we should clean out the drugs at the point of work?

Capt. Woods —Senator, if I can address you question, which I think is a reasonable one: aviation safety has benefited enormously from the support of the pilots in self-reporting and self-criticising. It leads the world. One of the reasons that aviation safety has the enormously high standard that it does is that pilots are self-reporting and self-criticising. Why we wanted to be involved in that was to ensure that the regulatory framework set up was not from a punitive point of view. I take your point that there will certainly be a transgressor in there—and, if there has not been one, there will be one—but we do not want to ruin a culture which has encouraged pilots to work with the regulators to drag the aviation industry up to the highest standard of safety in the world, by pushing them back under the carpet. If people who are not pilots, who do not understand that the pilots are very proud to have a very safe record, go under the carpet, we are going backwards.

Senator HEFFERNAN —I applaud that perspective. I have to say that, in a touch and feel sense, there are no water restrictions at Broken Hill. The reason there are no water restrictions at Broken Hill is that they know they are such an independent bunch out there that if they imposed them they will waste water and if they do not impose them they will not waste water. But do you think that there would be anything wrong with drug testing?

Capt. Woods —We had no objection to it. We just wanted the framework done in a way that was supported by Australia’s pilots and not rejected; that was all.

CHAIR —In my previous life I negotiated many a drug and alcohol policy, and I would not in my wildest dreams not include those who are affected by it. It is just decency and common humanity to bring everyone around the table, and I think it is appalling that you were not invited.

Capt. Woods —Thank you for those supporting words, Chair.

Senator HEFFERNAN —In support of the pilots, I think what is good for the goose is good for the gander. We had a judge recently in South Australia who died of a drug event overnight. I think it is good for everyone. If it is good enough for you blokes, we all ought to be subject to some sort of speed-camera effect.

Capt. Woods —We do not disagree with that; we just want it done in a way that keeps the system’s safety standard where it is.

CHAIR —I thank you both for your time and your assistance to the committee.

Proceedings suspended from 10.32 am to 10.45 am