Memorandum submitted by the Aircraft Owners
and Pilots Association
The Aircraft Owners and Pilots Association of
the UK has 4,000 individual members and 140 companies which are
engaged in providing flying training and other specialist services
employing about 17,000 people (source Oxford Economic Survey
1992). We are grateful to the committee for the opportunity to
comment.
General Aviation is defined as all aviation
other than commercial air transport or the military."
The fundamental problem that exists for the
GA community is the lack of Government Policy towards our industry.
This is made worse by the fact that the CAA's sponsor, the DfT,
in its sponsorship document says nothing about the way the CAA
should regulate General Aviation and this is wrong, in our view,
particularly as we get swept up in the generality of policy when
it comes to fees, for example, that the CAA is required to recover
its costs from those it regulates.
1. THERE IS
NO INDEPENDENT
OVERSIGHT OF
THE CAA
It is undesirable for there to be no top cover"
for the CAA. The Authority effectively decides what work it should
do, how many people it needs to do it and how much it should charge
for the work. Because of the safety" aspect of the CAA's
remit, it is difficult to challenge its decisions. Yet the CAA
is no different from any other authority in that it is subject
to the bureaucratic pressures of empire building, featherbedding
and jobs for the boys". The CAA needs a permanent, independent
review body to which industry can appeal when it believes it is
being imposed upon for all the wrong reasons.
2. THE CAA'S
EXCESSIVE CHARGES
AND OVER-REGULATION
ARE DAMAGING
SAFETY
The CAA's record on safety in general aviation
needs to be split off from the overall safety picture. In fact,
UK large public transport operations are safer than those of,
for instance, the United States, where airline safety is poorer
largely because of the record of commuter airlines, which have
no real parallel in the UK. In purely general aviation terms,
the UK's safety record is no better than that of the United States—and
may be marginally worse—despite the overwhelmingly greater
burden that the CAA imposes on general aviation when compared
to the FAA. It does not follow that more regulation equals more
safety. In fact, AOPA argues that in some circumstances the opposite
is the case. Those countries in Europe which have regulated general
aviation, almost to vanishing point, have the poorest safety records.
What improves safety is pilot currency and practice, and the ever-increasing
burden of CAA charges on general aviation mean that UK general
aviation pilots are not as current as they could be. AOPA believes
that CAA charges have already gone beyond the tipping point"
at which regulatory costs become a drag on safety, and that a
substantial reduction in the CAA's financial impost on general
aviation would make flying safer.
3. THE CAA'S
SENIOR EXECUTIVES
CHANGE TOO
OFTEN
AOPA believes the structure of the hiring practices
of the CAA are not optimal and, as a result, the Authority is
too easily able to wash its hands of its mistakes. The executive
directorship of the CAA should not be a short-term appointment,
and there should be an end to the practice of hiring military
officers who build second and third index-linked final salary
pensions in executive positions while crossing off the days to
retirement. An example of the negative effect of this practice
is the introduction by the CAA of JAR-FCL, which the current Head
of Safety Regulation recently termed a disaster" and for
which he apologised. Yet there is no one around to answer for
the decisions that were made at the time—all have moved
on. Similarly, those who are making even more disastrous decisions
today on CAA charges will not be around to answer for their mistakes
in four or five years. This must stop, and the CAA must hire an
executive cadre with proven commercial capabilities and a knowledge
of general aviation as well as an overriding safety responsibility.
4. COMMERCIAL
AVIATION AND
GENERAL AVIATION
HAVE ENTIRELY
DIFFERENT FINANCIAL
ENVIRONMENTS
For charging and oversight purposes, the CAA
must stop treating aviation as a single entity. The airlines cannot
be equated with GA. Airlines are overwhelmingly a leisure industry,
with more than 75% of passengers flying for fun. They are massively
subsidised, pay no fuel tax or VAT on tickets, buy cheap aircraft
(thanks to government subsidies to manufacturers), enjoy bilateral
deals which stifle competition and profit from passenger departure
tax, which they bank for 90 days before passing on. They get direct
government handouts of £2,320,720 a year to keep running
unprofitable routes. They are hugely profitable. By contrast,
more than 70% of general aviation flights are for business or
flight training. GA pays a full measure of fuel tax and VAT, its
margins are razor-thin or non-existent, and it is shrinking. GA
pilots who go to the airlines provide de facto subsidies of between
£50,000 and £100,000 each in the cost of training for
which the airlines once paid. The commercial reality of general
aviation must be recognised by the CAA, and its regulation costed
accordingly.
5. OVER-REGULATION
There must be a more robust attitude to repetitive
inspections, which risk bringing the CAA into disrepute by looking
like make-work, make-money projects. An installation check on
a simulator is justified, even at a CAA price of £10,000.
A follow-up inspection a year later may also be justified, but
further annual inspections costing thousands of pounds when nothing
has changed are unnecessary financial impositions on training
schools and student pilots. Similarly, repetitive inspections
of aerodromes where nothing has changed should be replaced by
an audit system. There is no justification for requiring aerodromes
to pay thousands of pounds for new surveys every five years when
nothing has changed. Every CAA repetitive inspection should be
scrutinised for value.
Every department of the CAA should be required
to justify its existence. AOPA questions whether the CAA needs
a medical department when medical checks can cost-effectively
be carried out by the private sector, where the real expertise
lies. Does the CAA need a standing legal department? Can the work
of the CAAFU be more cost-effectively carried out by the private
sector with no diminution of safety? Why should the CAA place
restrictions on private examiners who perform the work of the
CAAFU? Does the CAA need offices in Kingsway as well as Gatwick,
and regional offices around the country? Is it necessary for the
CAA to issue licences when the work could be done more quickly
and cost-effectively by agencies such as the DVLA? This Select
Committee investigation provides a vital opportunity to take a
clean-sheet approach to the level of involvement the CAA in general
aviation. Is it possible to remove every aircraft under 5,700kg
from CAA oversight and transfer responsibility to industry, as
has been done with most permit aircraft?
6. NO JUSTIFICATION
FOR A
6% TAX
AOPA questions the requirement for the CAA to
make a 6% return on capital. The norm for the public sector is
3.5%. Why should the regulation of aviation safety attract a more
onerous profit requirement?
AOPA believes that the CAA would become more
efficient if it complied with the guidance material that is provided
by the Cabinet Office. In a recent consultation on CAA charges
it is the view of AOPA, based on independent expert advice, that
the proposed changes to the CAA's Scheme of Charges should be
subjected to a full RIA and small business impact test as well
as a competitive analysis. Unfortunately the CAA believes that
these items are only required for Primary legislation but given
the fact that following an earlier flawed process the changes
that are being considered go beyond a known formula eg RPI or
Rate of Inflation and therefore Cabinet Office guidance implies
that the aforementioned tests need to be completed. As there is
no independent body for us to turn to for a decision the CAA say
they are right and that's it. Well even if they are right, an
independent ombudsman would be helpful on occasion like this.
Its not all doom and gloom with the CAA as there
are many good individuals employed there who do their work diligently,
the difference is that when the CAA gets decisions wrong they
do not normally go out of business. Our industry is littered with
examples of where businesses have had to stop doing things because
the costs involved outweigh the potential income. As with any
market there is a limit to what it can bear before people give
up or move to other regions in Europe and the USA just to stay
in business.
The CAA have begun two reviews of GA and if
I was a cynical person I might be tempted to suggest that someone
somewhere tipped them off that they were next in line for the
Transport Committee to review! However I am sure it is merely
a coincidence.
10 November 2005.
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