Welcome to the General Aviation Advocacy Group of New Zealand

A proposal to challenge the new CAA levies

By now, operators will have received a letter and information booklet from the CAA detailing the new safety levies that will take effect from 1 July 2017. These levies have been introduced despite efforts by a number of individuals and organisations to enlighten the CAA and Minister of Transport of the failings in the consultation process, as well as the inequities in the methodology adopted.

Immediate financial implications

The levies will be introduced across two financial years (2017-2018 and 2018-2019) with 50% of the full rate payable in the first year and 100% payable in the second year and beyond. For the purposes of analysis, this article is based upon the full levy rate payable and ignores the first year’s sugar-coated Trojan horse.

Certificated operators will no longer be charged at an hourly rate by the CAA for routine inspections and monitoring. They will instead be levied at varying rates as outlined in the following table:

Sector Full levy rate
Part 115 – Parachuting $1.60 per descent
Part 121/125 – Passenger Air Transport $5.50 per flight hour
Part 135 – Passenger Air Transport $6.50 per flight hour
Part 137 – Agricultural Operations 0-10,000 tonnes per annum $0.87 per tonne
10,000 – 50,000 tonnes per annum $0.73 per tonne
50,000+ tonnes per annum $0.65 per tonne
Part 121/125/129/135 –
Freight Only
0-10,000 tonnes per annum $3.00 per tonne
10,000 – 50,000 tonnes per annum $2.60 per tonne
50,000+ tonnes per annum $2.00 per tonne

 

Apply the above figures to your operation to determine how much you will pay the CAA under this new levies regime. Compare this to how much you currently pay annually for routine audits and this will tell you whether you are immediately better or worse off.

The longer term consequences

These are numerous. A couple of the more obvious consequences are the loss to industry of the mechanism whereby demonstrated safety performance was financially rewarded via an increased audit interval and a corresponding reduction in CAA charges; and the fact that in moving away from an hourly rate-based method of cost recovery, the CAA has skilfully managed to put itself in a position where its operating costs can’t easily be compared with other similar organisations or government agencies.

Of far more significance, however, is the fact that throughout the process of setting these levies, the CAA was very clear that its objective was to more closely match the revenue recovered from each sector of industry with the expenditure it incurs in regulating that sector. This all sounds very nice as a concept, but an analysis of the CAA’s current sector-by-sector costs and budgeted future expenditure shows what full cost recovery might look like, and the ramifications for commercial general aviation become immediately apparent:

  • Regulating commercial general aviation accounts for 23% of the CAA’s total expenditure.
  • The CAA’s budgeted total expenditure for FY2019 is $42.818m.
  • This means that the CAA’s expenditure on the regulation of commercial general aviation will be 23% of $42.818m, which equals $9.848m.
  • Deducted from this is the CAA’s projected revenue from other sources (for example, fees and hourly rate charges) of $1.637m, which leaves $8.211m to be recovered from commercial general aviation by way of levy.
Sector Historic percentage of total cost of commercial general aviation audit oversight Share of $8.211m to be recovered if 100% cost recovery principles applied Levy rate required to achieve 100% cost recovery
Part 115 – Parachuting 11.3% $927,843 $11.94 per descent
Part 121/125 – Passenger Air Transport 11.6% $ 952,476 $25.15 per flight hour
Part 135 – Passenger Air Transport 25.4% $ 2,085,594 $29.78 per flight hour
Part 137 – Agricultural Operations 34.7% $ 2,849,217 $3.99 per tonne
Part 121/125/129/135 – Freight Only 17.0% $ 1,395,870 $13.75 per tonne
TOTAL 100.0% $ 8,211,000

 

In terms of the way the Government sets fees and charges, there is nothing to prevent the CAA moving to a 100% cost recovery methodology. You will be able to assess the impact on your business, but it doesn’t take rocket science to also imagine the implications for the entire commercial general aviation sector.

Can this be challenged?

Yes it can. Four avenues have so far been identified through which various aspects of this levy can be subjected to scrutiny. These range from the veracity of the consultation process, through to the selective targeting of the levy, its longer term implications, and compliance with government guidelines and the Civil Aviation Act itself.

This isn’t going to be an easy process. It will involve significant research and analysis coupled with engagement in the political arena to maximise the chances of success. Any such challenge needs to be mounted now, before the levies are cemented in place.

The estimated cost to mount a credible challenge will be around $20,000.

The next step

If you have any questions, or would like to support the effort to overturn this parasitic threat to the future livelihood of commercial general aviation, please contact Qwilton Biel.

Phone:           (027) 493 5655

Email:            qwilton [at] biel [dot] nz

Client Satisfaction Surveys in a post-factual world…

The CAA is either living in a fools’ paradise and thinks all its customers are happy, or it is deeply afraid to ask them. We can’t think of any other reason why the CAA refuses to hire a neutral organisation and tell it go to the customers and ask some honest questions. We also have convincing proof that no company or organisation can rely on anything other than an independent monitoring of its customers.

Here’s why…

In January this year, we wrote to the Chairman of the CAA Board pointing out that the Authority engaged Colmar Brunton to undertake a client satisfaction survey in 1995 and 1998; five years later in 2003, the same research company carried out a similar survey. Since then, there have been no further CAA Client Satisfaction Surveys specifically targeting all CAA document holders. The 2003 survey’s results did not heap praise upon the CAA.

In his reply, the Chairman said:

“Your interest in surveys is topical as the CAA will shortly be repeating its flagship ‘Feel Safe’ survey conducted by Colmar Brunton. Management are currently planning on supplementing the survey, or even splitting its content, so that while retaining its prior focus on the CAA’s ultimate customer (the public) it also provides more information from the aviation sector”.

OK, it’s costing you $4.50 a minute. But do have a problem with me?

The Colmar Brunton “Feel Safe” surveys have typically only contained results from 300 to 400 respondents. We have written to the Chairman and asked that all CAA document holders be made aware of his planned consumer survey. But we reminded Mr Gould that this is just a consumer survey, and what is actually required is a CAA document-holder survey related to specific client issues, and promoted via the CAA’s email user database and Vector magazine.

Post-audit or inspection feedback to the CAA

In our letter to the Chairman, we pointed out that MoBIE has for many years operated a system in which, after every investigation, an inspector is required to send a client satisfaction survey to all parties involved. Something similar would be a valuable tool for the CAA Director for feedback about, to quote just one example, the knowledge and performance of auditors and the way they interact with aircraft operators and aircraft maintenance facilities. A client feedback system also provides useful information to senior managers of departments to gauge the performance of individual staff members as part of their yearly performance reviews.

The Chairman said:

“… at the end of each audit or inspection, the CAA already surveys the parties involved in order to gather information on their views on the effectiveness and efficiency of the regulatory intervention they have just been involved in. While that provides limited information about the performance of one regulatory function, we are interested in gathering a broader range of views to inform risk management and decision-making. Both the management and Board of the Authority recognize the importance of such information from the sector to inform our planning and improvement efforts. In part, this is one of the reasons we place so much importance on the relationship with representative bodies like the Aviation Community Advisory Group.”

We then sought to verify what the Chairman had claimed was correct – “the CAA already surveys the parties involved in order to gather information on their views on the effectiveness and efficiency of the regulatory intervention they have just been involved in”.

We asked a number of operators if what the Chairman claimed (or had been told by his officials) actually happened in practice.

  1. Did the Chairman’s statement have validity?
  1. Did operators feel comfortable providing feedback to the CAA when their AOC is at stake?

We believe the replies below speak for themselves, and we’d welcome further comments.

  • No, I’m not aware of any statement like that. Imagine if an operator criticised them at that point, they could be deemed not fit or proper and their AOC withdrawn or delayed when the auditors got back to Wellington. Yes there is a discussion, but who would dare to complain? It proves how out of touch the Chairman is.
  • I never had the auditors ask me how the audit went or what I thought of CAA. If you wanted a good audit report you would never consider expressing your thoughts on that issue. Ask the Chairman for some of the recorded comments.
  • No, I haven’t been asked for feedback (that’s not to say I haven’t given verbal feedback to auditors at a subsequent audit however!).
  • I am not aware of any formal feedback system. At one point during an audit, I found I was being asked the same questions at each audit such as “Is your fax number still xxxxxxxxx. Is your mailing address still xxxxxxxxx. Is your phone number still xxxxxxxx. When I’m paying over $4.50 PER MINUTE for CAA to ask me the same questions at each audit to which there was no change, I wasn’t happy. I suggested they send me an A4 sheet with those questions on it prior to the audit and I could go through and tick the boxes, thus saving valuable minutes. They thought that was a great idea but nothing was done.
  • I have never been asked at all, fair to say I have offered my opinion on a number of occasions regarding their efficiency levels, no one has ever asked me for it tho and I have undergone approx 25 audits over the years.
  • The last CAA audit that I went through was about 2 years ago for our former Part 145 maintenance organisation. There was certainly a discussion on how we viewed the conduct of the audit but our responses were very much along the lines of what you would expect of “the regulated” talking to “the regulator”. No matter how the CAA Chairman might like to dress it up, it is extremely difficult to get anyone whose livelihood relies on holding an aviation document to be critical (no matter how well intentioned or constructive) of the organisation that issues said document.
  • I am in full agreement for the auditing process to be outsourced, what a great idea, at least if this happened there would be no favoritisms by the auditors. It’s imperative that all operators record* audits.  In that way it keeps the auditors honest and semi under control.
  • Yes this is an interesting subject and I totally agree with the other comments.  After last year’s audit we received a survey, which I filled out with my own feelings regarding CAA.  But I then thought it wasn’t a good idea to return it as it may have been held against me.  So I never posted it. I am certain that industry is running scared of CAA and feel that there are “bully” tactics going on. CAA is determined to change the aviation industry to make it highly regulated to cover their own arses.  Hence industry is finding this hard to come to terms with.
  • A further point about commenting on audit skills etc is as long as they are sitting at your table you are paying for that time.  You want them in and out of your place as soon as possible so the audit doesn’t cost you an absolute fortune.  So no, we wouldn’t think there would be anyone out there brave enough to criticise the CAA openly and in front of the auditors, as it would make their lives a misery.

The Chairman also said:

“On the information theme, please note that management is also introducing a ‘balanced scorecard’ to improve the information available on organisational performance. While not yet complete, over the next 12 months you can expect to see information being sought from the sector and others to inform the assessment of matters of regulatory effectiveness, efficiency and regulatory burden”.

  • Record, in this context, means to “tape record”. The GAA recommends that all important dialogue you have with CAA personnel –  on your premises, over the telephone or at the CAA’s office – should be recorded on audio and/or video. Before making any recording, you should advise your intentions to the CAA personnel, ensure they agree to an uncensored recording and offer to provide them with a copy of it.

CAA Notices – The tentacles of regulation just keep growing longer

In mid-February, the CAA announced its intention to publish CAA Notices as a means of ensuring that “the regulatory framework remains responsive and adaptable to change.”

On the surface, these objectives almost appear noble. But when we peel back the layers, what emerges is a worrying erosion of the checks and balances that have underpinned aviation rule-making since the early 1990s.

A CAA Notice will be a mandatory stipulation of requirements and must be complied with. It will be reinforced by a rule, but the notice itself will be issued by the CAA rather than going through the rule-making process.

Parliament did not vote for this

When concerns were raised about the advent of CAA Notices without any consultation, the response from CAA management was that there is no proposal to consult on the concept of Notices because these are currently permitted under Section 28(5) of the Act.

Section 28(5) was inserted into the Civil Aviation Act in 2010 and does confer certain powers to impose requirements or conditions; however, some seven years later, the CAA is being somewhat cute in its interpretation of how far the law-makers (Parliament) intended these powers to extend.

One of the positives of our system of government is that it keeps records, and these very clearly show that:

  • In recommending amendment of the Civil Aviation Act to Cabinet, the Minister sought to grant the Director power to determine technical matters such as testing equipment, syllabi and examinations
  • Cabinet agreed to amend the Civil Aviation Act to provide for rules that delegate to the Director the power to determine technical matters, such as testing equipment, syllabi, and examinations
  • When introducing the amendments to Parliament for debate, the Associate Minister highlighted them as being about the power of the Director to determine technical matters under the Civil Aviation Rules.

Parliament intended the granting of powers to determine technical matters in a narrow range of areas. It never intended the establishment of a process where the CAA becomes the risk-definer, the solution-chooser, the rule-maker and the law-enforcer.

This entire CAA Notices concept is a flossed-up attempt by the regulator to twist the intent of the law-makers in order to extend its tentacles and shield itself from the scrutiny of its masters. Aviators will not have recourse to the MoT or Minister regarding the content of CAA Notices.

Rather than looking for mechanisms to increase its powers and subvert the checks and balances that exist, the CAA should be focusing on getting rules and rule amendments right the first time so that they progress through the existing process in a timely manner.

CAA funding review: Political leadership is now essential

Since our update last month, we’ve achieved much greater clarity around a few things:

  • The Minister of Transport, Simon Bridges, is still waiting for the final Cabinet paper and Regulatory Impact Statement on proposed charges.
  • He believes that these two papers are months away, not weeks.
  • He has given an undertaking that the Chairman of the Board will respond to our letter calling for independent and open and transparent analysis of the Regulatory Impact Statement, but told us that he doesn’t think such transparency is necessary.

So what does this all mean?

It is by no means certain that the new levies and other changes will occur in November as planned. This triennial review of charges is already running at least 12 months late. Some say that if there is no decision on changes before the end of the year, it will be very difficult to impose them until after the election.

We are quite happy with (and support) a number of the CAA’s proposed changes. We oppose only one of them: the proliferation of new levies on commercial general aviation. All the others are either unequivocally supported or backed with some reservations about their consistency with the user pays philosophy.

The GAA is opposed to the introduction of new levies because:

  • They are unfair and unjust – some sectors, notably GA commercial, will have to pay for audit and surveillance through the proposed new levy, while all other groups get this service for free.
  • Commercial GA will have to pay for educational, safety investigation/prosecution and safety promotion and implementation of rules under the levy arrangements, while all other sectors have these activities paid for by the levy on passengers.
  • Safety in commercial GA is highly vulnerable to increased costs – a recent statement by the CAA’s Deputy Director responsible for GA confirms this point, saying a recent survey of more than 600 helicopter pilots has shown cost-consciousness was a major safety issue for the group.
  • The CAA doesn’t need the money. It is extraordinarily well resourced, reporting reserves of more than $5m in the 2015 financial year.
  • Obedience to Treasury and Audit office guidelines for charging in the public sector is leading to an internationally uncompetitive industry, with the CAA’s hourly rate significantly in excess of the UK or Australia.
  • Levies are like taxes – they only increase. When the aviation industry is expanding, the CAA over-recovers – and if there is a a shortfall, charges are increased with government approval.

Last time, the CAA had some justification for a rate hike but on this occasion there should be only one recommendation and that is to reduce present charges because the Authority is rolling in money.

And that’s why the Regulatory Impact Statement is so critical.

Simon Bridges: Time for some serious attention

Simon Bridges: Time for some serious attention

If you get this high-level analysis wrong, things go really pear-shaped. We are surprised that the Government doesn’t see the RIS as a key part of managing its political risk – and there is significant risk if the analysis is wrong.

We know through our network that the hourly rate charges are doing a lot of damage. There is a commitment out there to bring in new equipment and technologies, but exorbitant CAA costs are having an impact. New Zealand is simply not always getting the best kit because CAA charges can be as high as $60k per aircraft and these charges must be paid up-front, before the aircraft is productive. So we get new aircraft, but perhaps not always with the best technology and safety benefits.

At no time did officials tell ministers that this would be one of the downside consequences.

We cannot understand why Simon Bridges is so quick to rule out any engagement with the industry on developing the RIS.  The CAA clearly understands (or has allegedly been told as much by an astounding 600 helicopter pilots in what appears to be a private survey) that commercial pressures are substantial in the sector.

So why aren’t the Ministry of Transport and CAA open to engaging independent and informed advice on the issue? This is the best way of managing the political risk.

Aviation safety is not some esoteric flight of fantasy by number-crunchers in gold-plated towers with water views. It is a very practical matter to which we all contribute, so why won’t Wellington officialdom accept we should have input into this critical paper? We have nothing to hide.

I am disappointed that, despite Minister Bridges’ commitment, the Chairman of the Civil Aviation Authority has chosen not to respond to my letter of mid-July on the RIS issue. Now I do know that The CAA’s apparent position is that it has made recommendations to the Minister, and that’s it. However, it also appears that the CAA is still having major input into the development of the RIS Why wouldn’t CAA want to put the best possible advice to the Ministry?

At the behest of the Auckland National Party MPs, we filed a formal complaint via Andrew Bayly, MP for Hunua. Its content has not yet been widely circulated, but we’ve done some more work on the impacts of all the changes proposed and concluded that the new levels of cross-subsidy are larger than the current ones.

The GAA believes that the Authority’s underlying strategy is aimed at taking our focus off its exorbitant hourly rates, and the escalation to a 100% cost recovery hourly rate of $466 per hour plus GST.

The real issue is benchmarking CAA charges so that they are internationally competitive. This would mean hourly rates of between $150 and $190 per hour and a medical application fee of no more than $80. Forget the Treasury and Audit Office guidelines; this is about making New Zealand’s aviation industry as attractive as possible, and that means safe and cost-competitive.

Our message to you: It’s really important to keep talking to your local MP, because sooner or later Minister Bridges will make a recommendation to his Cabinet colleagues.

Our message to Simon Bridges: It really is time to seriously consider and discuss our sector’s competitiveness, and that requires accountability and leadership.

 

♦ If your experience with the CAA – on any issue – has been disappointing, don’t keep it to yourself and them. Please share it with fellow aviators. Email admin [at] caa [dot] gen [dot] nz. Your privacy is assured.

Ag pilot competency checks: CAA leaves a mess in its wake

CAA - the fox in charge of the henhouse

CAA – the fox is in charge of the henhouse

The CAA is clearly in difficulties over its plans to reform the testing regime for agricultural pilots, particularly since the GAA pointed out that much of the proposed reform was not practical – particularly for the single-seat, single-control fixed-wing aircraft. Yes, it may be “legal” using the subtle differences in interpretation between a “passenger”, a“crew member” and a “required crew member”.

However, legality does not necessarily translate into a safe operation.

There are serious Health and Safety implications in the CAA’s proposals. Protests from the ag operators have highlighted the hazards. The CAA has adroitly passed the health and safety issues back to the operators and made them responsible for mitigating the dangers.

Because some of the single-control aircraft do not have a specific reference in their operating limitation pages of their flight manuals (a single-control Fletcher aircraft has only a placard on the panel, for example), the CAA says that the manufacturers do not specifically prohibit the carriage of a person in the jump seat during actual agricultural operations. However, a GA 200C Fatman, for example, does have a specific reference in the limitations pages to the fact that the passenger seat must not be occupied during agricultural operations and therefore an E Cat or a flight examiner may not be legally carried in that seat.

To mitigate the risks of restricted control movement caused by the person occupying the passenger seat during actual agricultural operations, the CAA has passed that responsibilty over to the PIC to ensure he has full and free control movement before takeoff. Whether this control check adequately takes into account the person in the passenger seat shifting his pre-takeoff seated position during a critical phase of flight, such as the low level reversal turns at the end of a spray or topdressing run, is open to conjecture.

As a result of submissions regarding the difficulties in complying with AC 61-15, the CAA has modified its stance and now permits ground observations of Ag competency checks in single-control, single-seat aircraft, provided they are backed up with high resolution video footage taken from within the cockpit.

The CAA is delegated to manage the new Health and Safety Act in the sphere of aviation. We question how the CAA can be expected to carry out an independent investigation of its own ACs and AMCs when it is, in effect, the fox in charge of the henhouse.

Ag pilots – a tiny and easily identifiable group for the CAA – were never individually consulted when the Authority issued its first AC about flight testing.

The Authority’s latest Advisory Circular is now up to Revision 5.

Of course, all this nonsense could have been avoided by proper consultation.

The General Manager GA has told us that there is no requirement for the CAA to consult on the addition of an AMC (Acceptable Means of Compliance) to an AC, although it may disclose and discuss the AMC informally but not necessarily with all interested parties.

However, the parties most affected by the Rule and the first version of the AC were the single-seat, single-control, fixed-wing Ag pilots – and they were not specifically consulted. We ask the obvious question: “How hard would that have been?”

We say that the way the Authority handles ACs and AMCs amounts to regulation by stealth, there being no compulsory requirement to consult with all interested parties – leaving the CAA at liberty to advise hand-picked groups claiming to represent the industry.

 

♦ If you have written to the CAA – on any subject – don’t just keep it to yourself and them. You can share it with fellow aviators by sending it to the GAA as well. Email to admin [at] caa [dot] gen [dot] nz

 

CAA Funding Review: Mud sticks – and so do promises

It wasn’t just former Transport Minister Gerry Brownlee who, in 2012 (when imposing those dramatic rises), promised to reduce or remove the need for increased CAA charges in the 2015-2018 triennial review. He spoke for every minister of the day. In 2016, that still involves at least 13 ministers in the present Cabinet.

Min of Tran Simon Bridges: Muddled response

Min of Tran Simon Bridges: Muddled response

There seems to be an official reluctance to even acknowledge Mr Brownlee’s undertaking, possibly because bureaucrats and politicians wish to avoid accusations of broken promises. Current Transport Minister Simon Bridges’ muddling response, when recently faced with sharp questions in the House from NZ First’s Denis O’Rourke, was, we suspect, because he had been hoodwinked by officials who had conveniently failed to brief him about the Brownlee pledge.

If you read the CAA’s briefing papers to the incoming minister in 2014, you’ll see that its “first principles review” of future funding was already under way.

This suggests that Minister Brownlee either approved a first principles review in the expectation that charges would be held or reduced and the present hourly rate of $288 would become the 100% cost recovery rate, or officials charged off on their own. Gerry Brownlee is not known to mislead his Cabinet colleagues. He’s a minister of long standing. His expectation would be that the promise:

For the period for the next funding review (that is 2015-2018) the Civil Aviation Authority will look to decrease costs so that fees and charges reflect full cost recovery from 2015/16 and the need for further increases is reduced or removed…”

would be honoured.

Few ministers have objections to “first principle” reviews; such reviews are set in the context of the Government’s overall policy objective. In this case, the CAA apparently never told Mr Bridges that his predecessor had committed to two things:

  • Decreased costs
  • Need for further increases reduced or removed.

One can only assume that the promises were designed to get the controversial 2012 increases across the line. In other words, they were false and merely designed to comfort other ministers who were concerned that the draconian 2012 rises were unfair.

We also know that, this time round, many politicians are uncomfortable that those who can afford to pay – such as central and local government-controlled monopolies – get a free ride under the new proposals, while some of our most vulnerable operators, servicing similarly vulnerable communities, must pay up to 300-400% more.

If the present review is a “first principles review”, why weren’t these principles clearly articulated to everyone?

I was around when we went to “user pays”. The first principle of user pays is that the users have a say. As users, what say had we in the $43m of revenue the CAA claims it needs? As far as I am aware (along with everyone I have spoken to), we were merely told that $43m was what CAA wanted. Well, let me offer just a few of many money-saving thoughts:

  • The Civil Aviation Act S.72 E requires the Board to consider the most efficient and effective means of performing its functions and discharging its powers either by delegation, contracting or performing in-house. There is no evidence that the Board has ever done this. Why not?
  • The CAA undertook an expensive investigation ($250,000-plus) of an accident involving a US-registered aircraft. The Feds were not even interested and the findings were of zero benefit to the New Zealand flying public – where’s the accountability for that?
  • LTSA has a perfectly good system for registering vehicles. Why can’t we register our aircraft on the same system and at the same cost?

The second principle: All who benefit should contribute something. This means there should be no free-loaders. Under the CAA’s new proposals, this principle is destroyed. The likes of the private pilot will pro rata contribute more to financing the system than any airport, ATC and Met provider, engineering company or registered cargo agent. This is unfair and unjust.

The third principle: Where an activity can be identified and linked to a beneficiary, an hourly rate should be charged. This is not merely some flight of fancy but is enshrined in how charges must be set. There must be zero cross-subsidisation of these activities.

The fourth principle: Ability to pay. Not all companies and/or individuals have an equal ability to pay. Some businesses derive much more global credibility than others, through having a competent regulatory authority.

The fifth principle: When all activities have been allocated fairly according to the 100% cost recovery hourly rate, then – and only then – can a levy be struck. Levies cannot be based on hours because if a beneficiary can be identified, that beneficiary must pay.

One of the reasons the Ag levy is so high is because of the cost of implementing the Ag Sector profile. I put money on it that Ag operators were never told they would have to retrospectively pay for the Ag Sector profile. Levies – as with taxes – can’t be applied retrospectively without Parliament’s authorisation. This is a big NO NO.

Recent advice from the CAA says: “The Board… has now finalised its advice to the Minister of Transport. As he is now considering that advice, it is not appropriate for me to comment further…..”

This clearly shows that the Regulatory Impact Statement (a document forming part of the advice to ministers) was undertaken by officials without any transparency or consultation with industry as to the impact of the proposals. We had sought, on the industry’s behalf, an independent development of the RIS. The Chairman of the CAA didn’t even bother to respond to that letter.

We are determined to oppose any unjust or unfair proposal and will use every means at our disposal.

The GAA has commenced a formal complaint process with the Minister of Transport, highlighting the areas where consultation has been deficient, and in particular:

  • the “selective” nature of aspects of the consultation process
  • the failure of the CAA to release to all parties the individual submissions it received
  • the timing of the consultation process, which curiously coincided with peak work periods for the industry
  • the lack of full financial transparency around the levy proposals
  • the defective thinking behind decisions that would permit “free-loading”

Individually, these aspects may seem minor. Collectively, they form a convincing basis to claim a breach of process and to challenge these proposals.

Live within your means – Minister Brownlee’s promise after the 2012 review

Brownlee may have gone away, but we haven't

Brownlee may have gone away, but we haven’t

I’ve already expressed my view that the CAA’s proposed new levies on commercial general aviation are some of the most draconian steps I have ever seen attempted, although I am assured they rank up there with the epic pricing debacle of the early 1990s.

Well, it would appear our former Minister of Transport nailed the CAA’s feet firmly to the ground when he said:

for the period of the next funding review (that is 2015-2018) the Civil Aviation Authority will look to decrease costs so that fees and charges reflect full cost recovery from 2015/16 and the need for further increases is reduced or removed…”

It’s time to deliver.

Has the CAA looked to decrease its costs? To be fair, it’s a mixed bag – some “ups” pushed by such things as the agreement with Airways on the AIP ($2m plus CPI adjustments) and SMS; and some “downs” such as shared services with AvSec.

BUT the net effect has been, as disclosed in the CAA consultation document, to push up the full cost recovery hourly rate calculated on the same basis as in the 2012 review to $466 per hour. Under the Treasury and Audit Office guidelines on charging for public services, this is the rate CAA should be charging industry – and could charge, unless costs are controlled at the 2019 review.

There was a quid pro quo in 2012 – Ministers formed the view that the industry had to “suck up” the increases – but there would be no more. The clear message: the CAA must live within its means.

We do agree that its “means” are pretty gold-plated compared to what we ordinary people in industry are used to, but nevertheless the message from Ministers was clear: Enough is enough.

Ministers come and go and Minister Brownlee handed the reins to Minister Bridges. But the problem remains.

Our lobbying programme is reminding everyone of the Cabinet’s undertaking.

For those who have responded to our survey and wanted further action, we have drafted letters for them to send to their MPs. We have also been in contact with and spoken to many more commercial GA companies. Each has been grateful for the assistance we are providing.

We are not suggesting that commercial GA shouldn’t continue its contributions towards the costs of running the CAA, but we are opposing the imposition of any new levies.

Levies are taxes that reduce financial accountability. They are the beginning of the slippery slope towards future revenue hikes. An hourly rate of $466 is simply ridiculous.

Let’s be clear:-

  • The CAA does not need $1.792m from GA commercial – present reserve levels are almost 300% higher than stated as required in the 2012 Cabinet paper.
  • Minister Brownlee’s 2012 assurances were an undertaking to reduce costs and remove the threat of further increases.
  • The CAA is not delivering value for money – commercial General Aviation is reporting little if any improvement in services.
  • The new levy “pays” for services which commercial GA already funds via the participation levy.
  • The CAA’s communication of proposals was too complex, lacked the critical financial information justifying the $1.792m increase, and occurred during peak season.

A quick reminder of the increased charges being proposed;

  • Introduction of new levies for commercial General Aviation (3-year phase-in):
Parachuting/Paragliding operators $2.50 per descent
Commercial Passenger operators (Medium/Large aeroplanes) $5.50 per flight hour
Commercial Passenger operators (Small aeroplanes and helicopters) $6.50 per flight hour
Adventure Aviation operators $12.50 per flight hour
Freight only operators $3.00 per tonne
Agricultural operators $0.87 per tonne

 

  • Existing levies (Passenger and Participation) to be retained.
  • Removal of hourly rate charging for all CAA audits.
  • A claimed 30% reduction in the pilot medical certificate application fee, which on closer examination was proved to be CAA sleight of hand: The Authority first increased the existing fee by 23% (to $404.71) and then reduced the new total by 52%, to $210.45. A genuine 30% reduction would put the charge at $162.76.
  • CAA annual income requirement projected to increase from $38m (2016) to $43m (2019)
    • o Removal of hourly rate audit charge – $2.24 m
    • o Reduction in medical cert fee – $0.8m
    • o Passenger levy + $6m
    • o New GA levies +$1.792m
  • CAA actual reserves $10.2m; targeted reserve $3.6m

We understand the CAA Board has considered and reconsidered the final recommendations. Adjustments to the levy rates have been flagged but the CAA continues to pursue the new levy on commercial GA.

There are now well over 50 letters with key Ministers and MPs. Each of them requests a one-on-one meeting with the MP to raise “parliamentary awareness” of the issue.

If you are opposed to these new levies and want to join our campaign, let us know and we will help you. We know we still have a bit more time as the Minister hasn’t received the CAA’s final recommendations. We will only overturn these levies if we speak with one voice and deliver the same message:;

LIVE WITHIN YOUR MEANS – deliver on Brownlee’s undertaking

We are not going to go away, and we will use every possible avenue to get these new taxes on commercial GA removed.

 

Now the CAA puts small aviation businesses in its sights

Drop 'til you pop - the CAA will grab $2.50 every time someone falls out

Drop ’til you pop – the CAA will grab $2.50 every time someone falls out

Many of us may be thinking that, this time around, GA has been let off lightly in the CAA’s triennial funding review. But we could be very wrong.

Did you know, for example, that the CAA is reducing charges for many big operators such as airports and airlines, but plans to radically increase them for many small GA commercial operators, if it can convince the Minister of Transport?

Take a look at this little-known article: http://www.sunlive.co.nz/news/123994-bureaucrats-threaten-skydivers.htm

The CAA could once again inflict serious damage on the little guys – but this time there will be knock-on effects for local businesses and our country’s important tourism sector.

We think this needs a closer look, and we are asking commercial GA operators for some pretty urgent assistance. The GAA has already written to Transport Minister Simon Bridges about this (and, for good measure, we reminded him of the harm done to GA by the last round of increases signed off by his predecessor, Gerry Brownlee).

The GAA is asking commercial GA operators:

1 – Do you support the introduction of a new levy on GA commercial?

2 – The CAA’s proposal is that you will no longer pay for regular audits. How much do you presently pay (on an annual basis) for CAA audits?

3 – Looking at the table below, what could be the cost to your business of the new charges? Remember to remove the annual cost of your routine audit(s).

CAR 121/125/135 Freight only$3.00 per tonne plus participation levy
CAR 121/125 less than 20,000 pax $5.50 per flight hour plus participation levy
CAR 135 $6.50 per flight hour plus participation levy
CAR 115 Adventure Aviation $12.50 per flight hour plus participation levy
CAR 115 Parachute/Paraglide $2.50 per descent
CAR137$0.87 per tonne applied plus participation levy

 

The estimated cost to my business would be: $

4 – Are you aware that charges for all other certificate holders (e.g. Airlines paying pax levy, Airports, Airways, Engineering, Aviation Training Providers, Registered Cargo Agents) will be reducing? Do you consider this fair and equitable?

5 – Do you wish to participate in further work we do in opposing these new levy payments?

If these proposed charges affect your business, we invite you to respond by simply sending an email to airfabrico [at] xtra [dot] co [dot] nz with the following info:

1 – yes or no

2 – $ amount

3 – $ amount

4 – yes or no

5 – yes or no

Add any comments, if you feel inclined…

Confidentiality is guaranteed.

We will use this information to prepare more opposition to the CAA proposals.

The GAA is asking the Director to reveal details of all 111 responses to the second stage of consultation. We know that the CAA has already given that information, in a neatly bound document, to a select group of its customers.

We are also collecting information on whether you are receiving “value for money” from the services CAA presently provides. We’d welcome your comments (either positive or negative) on this subject.

Goodbye PPL Medical – and good riddance (but not in New Zealand)

96% of UK pilots backed the scrapping of the PPL medical. Is the NZ CAA deaf?

96% of UK pilots backed the scrapping of the PPL medical. Is the NZ CAA deaf?

The UK Civil Aviation Authority has announced the virtual end of the PPL medical.

Requirements for private pilots are to change in line with the CAA’s top level principles for GA regulation. They do not apply to pilots with commercial licences or those displaying at airshows, who will still need to be approved as fit to fly by a specialist aviation medical examiner.

The move – supported by 96% of respondents in a public consultation – will lead to cost and time savings for pilots and, in most cases, even remove the need for General Practitioner or Authorised Medical Examiner involvement.

Once the change takes place later this year, the medical requirement for UK private pilot licence and national private pilot licence holders will be to meet the same standard as that required to hold a DVLA Group 1 Ordinary Driving Licence. Existing medical options (for example, a UK declaration with GP countersignature) will remain available. The same options will also be available for private balloon pilots.

To take advantage of the change, pilots will need to complete a form on the CAA website to declare that they meet the DVLA medical standard. Pilots under 70 will need to do this once, while pilots over 70 must confirm their declaration every three years.

The changes are planned to come into effect in late northern summer 2016 when a new version of the UK Air Navigation Order will be published, containing these changes and other significant amendments for general aviation.

Currently, pilots with a NPPL licence are required to comply with DVLA group 1 or 2 standards and have their self-declaration of fitness countersigned by their GP. Holders of a UK PPL currently need an EU class 2 medical or the NPPL medical requirements if they only use the privileges of an NPPL licence.

The change is supported by a study of the risks associated with GA flying, together with a review of the causes of light aircraft accidents and the likelihood of these being triggered by a pilot being medically incapacitated. The risk to third parties has been considered and the regulatory approach taken by the Federal Aviation Administration in the USA, which mirrors the UK proposal, was also reviewed.

The consultation response document can be seen at www.caa.co.uk/cap1397.

More detail on the CAA’s GA activities and the work of the GA Unit are available at www.caa.co.uk/ga.

The FAA has a bill passing through Congress which will give PPL privileges on a driver’s licence medical.

Could we soon see the walls of our own CAA Medical Unit begin to crack under the weight of global common sense?

Class 2 medicals harm your wealth and add unwanted fat to the CAA

This article was written by Murray Shaw, a GA pilot, who originally sent it to the CAA

Class 2 medicals: They provide no benefits, either individually or to the public

Class 2 medicals: They provide no benefits, either individually or to the public

I propose that the CAA eliminates the requirement for a Class 2 medical for Private Pilots, replacing it with the same medical requirement as that currently required for the Recreational Pilot Licence (RPL) while retaining the current privileges of a PPL, and removes any requirement for PPLs to apply to the CAA for a medical certificate for a basic PPL.

There is substantial international information that points strongly to the fact that medical certificates do not prevent medical events from occurring in flight.

To expand on this subject:

♦ Paul Bertorelli researched some stats in the US (Avweb, 28 July 2015). He cites statisticss produced by a review of the autopsy results of 471 pilots involved in fatal aircraft accidents between 2011 and 2014, in which 403 had a medical certificate, 68 did not (flying under Sport Pilot rule) and 18 of the 403 were caused by medical incapacitation, or 4.4%. All of those pilots possessed current medicals which had not detected the issue that caused the accident. This indicates that for pilots, medicals do little or nothing to protect the public from the hazard of any pilot undergoing a medical event that leads to incapacitation or an impaired ability to maintain control of an aircraft in flight. None of the Sport Pilot accidents were caused by a medical event.

♦ The ICAO documents indicate there is a need to maintain some level of medical oversight over aviation activities. However, the ICAO acknowledges that, in applying the “1% Rule” (one pilot incapacitation due to a medical event in roughly every one million hours) for the above grouping the incidence of risk is very low.

♦ The rule to report medical events that impact on a pilot’s medical certificate has been removed from the PPL requirements, but is retained under the RPL requirements, which results in a confusing state of affairs. Are PPLs not required to report any such situation?

The reality for any pilot is a need to self-certify prior to any flight. In recent times, this has taken the form of the “I’m Safe” checklist which includes an assessment of any medical/health issues that may impact on a pilot’s ability to safely conduct the flight. Having said that, and in light of the point above, how many pilots report to the CAA that – due to having a head cold – they are not fit to fly? My guess is very few, if any, because too many know that to do so would incur further scrutiny, and significant costs, before being cleared to fly again – no one trusts the bureaucrats!

♦ The limitation of any medical exam is that its certification is only valid at the time of the assessment. Health issues can and often do come on with little or no notice, and can very quickly become debilitating. No medical assessment can predict this. As is indicated in the top point, medical assessments are unable to accurately identify and predict the likelihood of any such condition that can impact on a pilot’s medical certificate.

♦ The ICAO states that its own information identifies the primary cause of pilot incapacitation is gastrointestinal issues (75%). These can occur in the range of minor discomfort to rapid onset and complete debilitation. They are also identified as “usually impossible to predict”.

♦ For any risk management activity to be effective, the applied treatments must be proven to be effective. It is clear that the New Zealand population available to supply the level of data necessary to properly assess risk is insufficient. Therefore the CAA must rely on international statistics to inform it of the efficacy of its oversight and regulation processes in many areas. In the area of aviation medicals, it is very clear that all the CAA achieves is to create an additional layer of unproductive bureaucracy that does not serve to protect the public of New Zealand and, moreover, appears to be a revenue-gathering exercise by a Government department and an attempt to justify the existence of highly paid (but unnecessary) jobs.

♦ It is clear that the CAA considers cost to be a significant issue in the operation of its medical unit. From a public perspective, the obvious question is: How and why is the unit structured in such a way to generate such costs, and why are efficiencies through a review of its necessary functions (as required of other Government agencies) not looked for – and a restructure achieved?

Under the principle of “User Pays”, the CAA has introduced conflict:

♦ First, through over-regulation, the CAA is forcing pilots to pay for a service that provides no benefits, either individually or to the public in general.

♦ Second, the CAA is endeavouring to have pilots subsidise the additional scrutiny required for a very small number who have had an identified medical issue occur, but wish to retain their flying privileges. This breaches the principle and unfairly imposes costs where they are not necessary.

I would like to stress that this submission is not one that requests removal of medical examinations altogether, as I do not believe that is either sensible or appropriate risk management. I also believe that the lack of statistics to the contrary is a clear indication that the current approach to medical fitness applied by the CAA is excessive and leaves significant scope to reduce the level of surveillance of pilots, particularly recreational General Aviation ones.

I submit that, in view of the above evidence and in serving not only the Government, but the general public of New Zealand and the aviation community (pilots and support functions such as maintenance organisations) the CAA would be best served by supporting and encouraging general aviation activity through the reduction of the PPL medical requirements to the same level as that of the current RPL.

 

♦ If you have written to the CAA – on any subject – don’t just keep it to yourself and them. You can share it with fellow aviators by sending it to the GAA as well. Email to admin [at] caa [dot] gen [dot] nz