CASA CEO, Bruce Byron

RAAA 2008 Convention
Hyatt Regency, Coolum, 18 September 2008

Threats, Challenges and Opportunities

Good morning.

It is good to be able to join you once again at what is one of Australia's largest aviation industry gatherings. As most of you probably know, it is also the last RAAA Convention I will be attending, at least in my capacity as CEO of CASA, given my decision last year to leave CASA at the completion of my five year term of appointment at the end of November. It will be interesting to see if I suffer from Convention withdrawal symptoms!

Perhaps the best way for me to address the requested theme of this conference – from a CASA perspective - would be for me to say something about the threats and challenges that we at CASA have taken on over the nearly five years of my appointment and then to pick up on some of the issues that are emerging, both for CASA and for the industry.

However, before I embark on any detail, I'd like to kick off with something on working relationships. To relate it to the theme, what I want to raise is certainly not a ‘threat', but it is a ‘challenge', and it is definitely an ‘opportunity'. When I have joined you at past Conventions, my colleagues and I have always been received with courtesy, and what we have had to say has been listened to politely, and even occasionally with support or agreement. I have seen that as indicative of a spirit of cooperation and a willingness to consider other points of view, and that is all any of us can ask. And of course we don't expect that everything we say will necessarily be warmly received, that is not the real world, and we don't expect that.

There is a long proud history in some aviation associations that the measure of the success of an organisation, or maybe of the board or of the executive of that organisation, is the extent to which it can bash the regulator around the head. I'm not precious about this, or I hope paranoid - we are big enough and ugly enough to take whatever comes our way, and to respond in equal measure when that is appropriate, but it does promote an atmosphere of confrontation, and that is rarely productive and not usually the best way to achieve useful outcomes.

We deal with many interest groups and associations. Our legislation requires us to consult and there are a plethora of processes that adequately satisfy that requirement. But when it comes down to allocating the time of busy CASA executives to talk to industry reps I've developed a standard question of ‘What's in it for safety outcomes'. We've spent a lot of time over the last few years driving CASA to a position of looking at safety outcomes rather than just blindly following processes. We've fought plenty of battles – both internally and externally – to achieve that position. We cut our staff numbers by over 15% to ensure everything we did had safety outcomes as a focus, so we are very serious about that priority.

When we have a meeting with an airline CEO or maintenance controller we're fairly confident safety issues will be addressed – because those people have statutory safety obligations. But when we engage with industry associations that is not always the case. Quite often there are other agendas at play that have nothing to do with safety. So what I am saying – and this is really applicable to any industry association – if you want the safety regulator to allocate expensive quality time to you, we need to be assured that you have a genuine interest in safety outcomes. A good starting point is to make sure your articles of association address safety outcomes.

So, in terms of relationships, I would like to think this Convention presents an opportunity for a new beginning for the CASA / RAAA relationship, an opportunity to further enhance the parts of the interaction between us that have been working well, and also an opportunity to take another look at areas where things can be improved – in the interests of safety.

You have a new Chief Executive, who I think is doing a really good job in representing your interests. CASA will soon have a new CEO and it just might be that this could be the right time to re-think the relationship, to ensure issues raised have genuine safety outcomes as objectives and to be ready to convince CASA that this is the case. For CASA's part, we must clearly be ready to engage with any group that has a clear safety concern to raise.

Now, back to the threats, challenges and opportunities of the last few years, and I have spoken about some of these at various forums, including past RAAA conventions, so I'll keep it brief.

When I came to CASA at the end of 2003, it was not as if I did not know what I was taking on. Way back, I had worked in the then Department of Aviation, CASA's predecessor. I was later appointed to the CASA Board. I chaired CASA's Aviation Safety Forum and I was appointed by the then Minister as a special industry adviser to CASA on regulatory reform. It was an organisation that in some areas was verging on the dysfunctional. It was focussed on process and procedure.

The organisation's financial position was on a hand-to-mouth basis and the projections for my first two years meant there was no spare cash to invest in the necessary IT developments or new staff skills. My first priority was to achieve financial savings by testing everything we did

The senior management team was tired, set in its ways, and not all that interested in asking the hard questions, such as whether CASA was actually effective in fulfilling the expectations of the government, the industry, the travelling public and the taxpayer. I could go on, but I think you get the drift. There were massive challenges, but to pick up on the cliché, this also meant there were massive opportunities.

So nearly five years on, have we met those challenges and have we taken up those opportunities? I believe we have. But before you say “He would say that, wouldn't he” let me give you a few cases in point.

• Pretty much my first action was to put the IT development program on hold, re-calibrate it, and ensure it delivered achievable outcomes that would genuinely improve efficiency and effectiveness, within a tightly redefined budget. This all came to pass and we have a pretty good system working for us. Most importantly, we've saved the necessary funds that are needed to continually develop a modern IT system, without putting our hand out for more funding.
• We have a re-freshed and re-invigorated senior management group in place. No-one who was there in December 2003 is still with us. We have turned over about 50% of staff – that's over 300 – with many new staff coming from industry
• At the operating level, in addition to our traditional FOIs and AWIs, we have established a range of new positions to meet our present and likely future needs –
  • Safety System Specialists
  • Air Transport Inspectors
  • Aviation Safety Advisors
• We have abolished a substantial number of operational positions out of Canberra, a great place but hardly an aviation hub of note, to our new Operational Headquarters at Brisbane airport, and to our other offices around Australia.
• The regulatory reform program is finally producing non-prescriptive outcome-based regulations stripped of requirements that do not contribute to safety, and supported by a transparent and comprehensive industry consultation process.
• We have been able to increase surveillance of passenger air transport industry by over 40% whilst at the same time reducing staffing numbers in back-of-house areas.
• We established a robust independent Industry Complaints Commissioner function to provide an independent procedure for industry complaints against CASA to be addressed in an unbiased way.

We have also taken on a number of additional responsibilities such as

• Establishment of the Office of Airspace Regulation
• Participation in the government's initiative to assist Indonesia to upgrade its aviation safety structure.
• Establishment of the Alcohol and Other Drugs program

These new roles are not an additional cost impost on industry as they have been separately funded by government, but they do represent the government's confidence that the new CASA is fully competent to take on new responsibilities without any degradation of its key aviation safety role.

That's a summary of what is now the past. What about the future? As someone famous said, there are ‘knowns' and then there are ‘unknowns'. We are preparing for the ‘knowns' and I believe we have developed an organisation that is flexible enough and smart enough to adapt to the ‘unknowns' as they arise.

As some of you will be aware, the recruitment process for the next CEO has begun. That is a ‘known'. The recruitment process is being run by the Department on behalf of the Minister and the Minister has kindly asked me to assist the Secretary of the Department in setting the criteria for a new CEO.

I don't see any real threats or difficulties in the transition to a new CEO.

The second ‘known' is that the government plans to appoint a Board to govern CASA. This initiative is of course subject to Parliamentary approval, but there appears to be bi-partisan support for the appointment of a Board, so it seems likely it will happen. Timing is something of an ‘unknown' at this stage. The Senate Inquiry into the administration of CASA did put the legislative process on hold for a while, and it seems to me unlikely that a Board will be in place much before March 2009, perhaps later.

Is this a threat? I don't believe so. Will the existence of a Board present any unsurmountable difficulties for CASA or create great uncertainties for CASA or the industry? I don't believe so. CASA operated under a Board from its establishment in 1995 until towards the end of 2003, so it is not something that is particularly new or unusual. As you know, Boards are a common feature in many government agencies and I would envisage a relatively seamless transfer to the new governance structure. The success of a Board very much depends on the quality of the members and I am sure the Minister will be appointing people of the highest standing and experience to a future CASA Board, assuming, of course, passage of the necessary changes to the Civil Aviation Act. There will be a valuable ‘opportunity' in the way that management is able to tap into the knowledge and skills that Board members will bring.

On the financial front, one of the challenges we will be working on in the immediate future, and one that affects most of you, is getting a better handle on our costs of providing regulatory services, something that impacts on your costs. As you know we are required by government policy to recover regulatory service costs from the users of those services, but nothing more than the costs. It is therefore important that we have the best possible cost information, and we have a major project in the pipeline which will enable us to better define and capture cost data, and to give you in industry more confidence that you are paying no more than you have to for our services.

In a related issue, one of the challenges we are facing is a consequence of our program of seeking to eliminate historical requirements which have no real impact on safety, which is something I am sure most of you support. You may have recently seen, for example, that we are cutting back on the requirement for CASA to approve the addition or removal of certain single engine aircraft from charter AOCs. From our viewpoint it is a ‘no brainer'- industry's costs are reduced, and we can use the freed-up resources on areas where there is a real contribution to safety – surveillance..

So far I have spoken about some of the current and emerging issues for CASA. But there are obviously broader challenges and opportunities both for CASA and for the industry, and some that we can tackle in a combined effort.

In my view this is the most important work for the future – identifying safety risks

As our contribution to focussing attention on such challenges, late last year my office undertook a study entitled ”An Assessment of Trends and Risk Factors in Passenger Air Transport”. I commend it to those of you who have yet to catch up with it. Hard copies are available, and it is on our website.

The study identified four broad trends impacting on the aviation industry and likely to remain key influences into the future.

• Unprecedented global demand for aviation services
• Developments in aircraft manufacture, systems and technologies which offer potential safety solutions while also adding complexity and change.
• International instability and increased security-related costs and compliance burdens.
• Increased environmental awareness, driven by concerns about global warming and climate change.

Time moves on and the economic boom may have lost some of its lustre. But there are obvious implications for particular aviation operational tasks and associated safety support systems.

Although some of the issues identified are relevant to high capacity transport, a key issue identified is that it is low capacity regular public transport and charter sectors of the industry that are particularly vulnerable to the risks outlined in the report, as it is these sectors which in general have fewer resources available to help mitigate the risks.

Many of these issues are ones for you in industry to consider. To facilitate a collaborative approach to doing something about the emerging risks and trends, we are setting up five working groups, with people drawn from industry and government to assist in more detailed risk identification and research, and the development and implementation of intervention strategies. This is being organised through the Aviation Safety Forum – my principal industry advisory group

To address the readily identified emerging risks, initial CASA action includes:

• Applying increased surveillance to pilot and maintenance personnel capabilities in air transport
• Increased surveillance focus on compliance with flight and duty times, and development of fatigue risk management system guidance and regulation
• Giving increased priority to introduction of safety management systems
• Increased focus on management responsibility and capability in air transport
• Increased monitoring of operators' organisational procedures and processes during periods of rapid expansion
• Increased attention to the operation of larger passenger carrying aircraft at non-towered airports
• Monitoring developments at or near airports
• Increased focus on ageing airworthiness issues in smaller passenger aircraft not supported by manufacturers' instructions for continuing airworthiness.
• Establishment of new flight testing capability to conduct initial assessment of new flying instructors.

There are other things we will be doing. For example, over the recent past we have been paying much closer attention to foreign operators into Australia. We see the need to give increasing attention to foreign aircraft wishing to come to Australia and one of our challenges will be to ramp up our checking processes to accommodate that.

I mentioned ageing aircraft earlier. Ageing aircraft will be a growing issue for us, and you. I mentioned this issue last year at this conference. Smaller passenger carrying transport organisations operating ageing aircraft will need to deal with ageing aircraft and fatigue issues that have not been encountered before. It may be that manufacturers will decide not to support certain older aircraft, resulting in the possible grounding of aircraft used for passenger transport.

I am sure many of you will have thought about issues such as this, but it is not always something you can take very far when you are trying to run a business at the same time.

There is one topical issue I should mention. It is particularly topical in that it is today that it is expected the Governor General will sign into law Part 99 - Drug and Alcohol Plans and Testing. This will be the culmination of many years of work, with aviation in fact the last of the transport modalities to introduce drug and alcohol legislation.

There are two elements to this legislation – firstly the new regulations, which come into force today, require aviation industry organisations to develop detailed drug and alcohol management plans covering pre-employment testing, reasonable suspicion testing, and post-accident testing.

Also, aviation industry workers will be subject to random alcohol and drug testing. The testing is part of a national program that includes education, training and workshops.

The program applies to industry workers whose jobs are linked to aviation safety. Pilots, engineers, cabin crew, flight instructors, ground refuellers, dispatchers, load controllers, baggage handlers and air traffic controllers will all be potential candidates for random testing.

We expect random testing will begin later this year, while aviation organisations will have six months to develop and implement their drug and alcohol management plans.

We have worked closely with the aviation industry, drug and alcohol experts and employee representatives to ensure the testing regime is fair and effective. We have consulted widely with industry and unions and by and large, I Believe we have found bipartisan support across employers and employee groups. I want to thank the industry for getting behind the program and I urge all those involved to continue their support as the testing is rolled out later this year.

Today marks the start of our Australia-wide education campaign which will include 33 national training workshops and the provision of extensive guidance material. We have also commissioned a dedicated web section of the main CASA web-site. Dr Pooshan Navathe, CASA Senior Medical Officer, and Brenda Cattle, CASA's Alcohol and Other Drugs Project Manager, will officially launch the AOD program here at the RAAA Conference tomorrow morning, and will be available to answer any questions you may have.

I guess my take-home message to you is this. We are conscious of the kinds of challenges and opportunities going into the future that face us as a safety regulator, and we are aware of at least some of the issues that face you as a significant sector of the industry. We would like to work with you and others in the industry to better identify the issues and determine the best way ahead for dealing with them, where that lies within our responsibilities.

In many respects we have common interests. At the end of the day CASA has to be at arms length from the industry and while we should properly listen to industry and take account of your views, our safety decisions needs to be independent of those views. But that independence can still apply in an environment of genuine consultation and exchange of views, and I hope we can work together on that basis in a spirit of cooperation.

Thank you

Bruce Byron AM
Chief Executive Officer
September 2008