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AWSA SPECIAL REPORT – ATNS FEES ABOUT TO BE REVISED - 28 JUNE 2009
It was reported to the monitors of AWSA that General Aviation Representative Bodies met at Rand Airport on the 25th of June to co-ordinate strategy and pool resources to challenge the latest threat to its existence. Aero Club (Neil de Lange), AOPA (Dirk Uys), AWAC (Paul Van Tellingen) and CAASA (Kim Gorringe) were unanimous in their strong condemnation of the latest attempt by the airlines to obtain a larger contribution from GA. What is particularly perplexing is the fact that this initiative by the airlines will only result in additional revenue for ATNS of a maximum of R8 million, thus posing the question as to whether the resulting damage to GA is justifiable.
Citing economic hardship as the reason, the airlines are applying their interpretation of “User Pays” as a mechanism to apply pressure on the regulator to rubberstamp their requests. The GA representatives further resolved that the distorted logic of this charging model needs to be resisted with the utmost determination and agreed that the current events should be used as a springboard to challenge the underlying (or lack of) rationale of “User Pays”. AOPA (SA)’s USA affiliate has done substantial work in this area. Consensus amongst informed analysts suggests that “The ability to pay” is more appropriate where an industry of national importance is involved. Government’s responsibility to subsidise when needed should be examined first before drastic steps, such as those that are being proposed, are considered; especially so with the lead up to the 2010 Soccer World Cup.
The alignment of common interest resulted that, during the meeting on the 25th of June, GA’s unity was formalised by the re-establishment of the “Quad”. It is ironic that the airlines’ initiative regarding the current ATNS fees has resulted in a hardening in GA’s attitude which might ultimately cost them much more than the quantum of their possible gains should their application to the regulator be successful. Equally perplexing is the fact that the extra cost to the airlines, if current charging model is left unaltered, will be borne by the passengers and thus no additional financial hardship is induced on the carriers. The R8 million potential gains translate to approximately fifty cents per airline passenger ticket.
The current situation that GA finds it in is by no means unique. In 2005 a fee revision was introduced which would have effectively curtailed a large part of GA’s operations and so-doing undermine its existence. It was only after a protracted process of legal challenge that consultation was resumed which culminated in the current status quo. To reverse the agreement that was achieved after almost a year’s consultation, and so doing ignore the reasons that led to it, would border on foolishness.
The concept of “ability to pay” was not incorporated in the new fee structure at the time with the consequent disastrous effect on GA. (Flying schools closing down, AMO’s reporting losses, increase in the number of “stealth flight” incidents etc.) This oversight on the part of the policy makers, and the ensuing persistence in the belief that these increases would not harm GA, was very puzzling then and even more so now given that the airlines should have the benefit of hindsight.
The question remains, “Why should GA be accommodated in any way?”
POLITICAL/ SOCIAL
1) “Every village should have access to an aerodrome”
-State President – Sun City 18 May 2005
The requirements of Nepad also suggest that the Southern African sub continent requires a strong aviation infrastructure which includes a strong GA sector.
2) “I have instructed the Department to examine these problems carefully and to report back to me because general aviation is a major source of revenue for the tourist trade, for business activity and charters, and as a training pool for future pilots, engineers, navigators and ground support staff that we cannot afford to lose.”
-Min of Transport – Parliament 20 May 2005.
3) ” It can be concluded that GA is a major contributor to the South African economy and that aviation policy should also embrace the interests of this often less conspicuous, but active part of civil aviation.”
-Government White paper
4) Since the decline in the number of military pilots trained, GA has become the primary supplier of pilots to the airline industry. Transformation is slow, and in order to encourage applications from trainees of previously disadvantaged backgrounds, GA training institutions need to keep their costs low. ATNS fees have become a major cost component stifling entry of disadvantaged trainees. The misconception that GA consists predominantly of financially affluent participants is not assisting the policy makers in formulating sensible policies. Further, it should be noted, the airlines are incurring substantial savings by having access to a pool of trained pilots from GA for their recruitment needs.
5) The opportunity of South Africa acting as an African Nursery providing the aviation requirements of Africa cannot be lost given that GA in sub Saharan Africa (other than in the RSA) does little to contribute to the training or charter needs of Africa. We are presented with the opportunity of acting as a facilitator to re-establish acceptable standards in a geographical area that has attracted much negative attention with regards to safety from the international community.
6) Mercy flights –This invaluable service to society is predominantly provided by aircrew from the GA community on a voluntary basis. If GA is undermined this could be lost.
7) Bateleurs – as above.
ECONOMICAL
The question to policy makers and the airlines remain, “Once you have broken it will you be able to fix it?”
On the issue of subsidisation, it is clear that a B747 will always subsidise a C152. Clearly the ability to pay, with long term strategic interests of the aviation industry in mind, should enter the equation.
Government contribution with regards to infrastructure development is also a requirement. The lack of suitable alternative airports in the coastal areas comes to mind here. If this kind of infrastructure investment had been made in the past then the issue of congestion, which to a large degree is driving the debate, would have become muted. The following extract from a government report with regards to aviation supports this notion. It reads, “The commercialisation of the infrastructure companies requires the development of detailed investment planning and targets/incentives or performance contracts to ensure facilitation of government policy.”
The high collection cost on the part of ATNS further leaves one in doubt as to how cost effective the policy of introducing new fees will be.
OPERATIONAL
One of the recurring motivators advanced as justification for the increased or additional fees for GA users was the issue of limited capacity. The thinking was that the “appropriate price signal” will be a constructive way to create capacity. Representatives of GA are of the opinion that such an approach brings with it unwanted “baggage”. If aircraft below 5000kg are given a lower priority in handling, then they will effectively be using “excess” capacity and will make more resources available for use by the airlines during peak times. Since GA is not adding to the cost of peak requirements, it should be exempted from paying fees.
What is of further interest is the following extract from a Department of Treasury report. “Improvements in ATNS’ operations could allow it to navigate and land more aircraft”. We are of the opinion that allowing operational staff and controllers to develop new procedures, coupled to the redesign of airspace, more effective capacity utilisation can be achieved.
SAFETY
The introduction of the new fees could lead to safety standards being compromised. The higher incidence of unreported and untracked aircraft in controlled airspace during the 2005 fee increases is cause for concern.
Taking cognisance of the above, the need of risk management was underlined during a debate with airline representatives on the 21st of April 2009. The response during discussion of the above issue left no doubt that a policy of “Shooting the messenger” has become acceptable. The timing of the airline initiative in this regard could not have been worse given the lead up to the Soccer World Cup.
There was a quantifiable negative effect on the training standards within GA as a result of the initial 2005 fee structure introduction. Should the current airline proposals be accepted it would certainly lead to a reduction of training standards and would thus further compromise safety?
“Scud running” will also become more common place in an attempt to avoid fees which will in turn lead to a higher number of CFIT accidents.
CONCLUSION
It can be safely said that the political, social, economic, operational and safety implications of the latest airline initiative simply cannot be justified by the small financial gains. Recent experience during meetings with ATNS, where airline representatives make less of multi million Rand furniture expenditure, begs the question, “What is their true motive?”
Report compiled by Paul Van Tellingen