Supplementary memorandum submitted by
the Society of British Aerospace Companies
We spoke briefly immediately following the Transport
Committee 18 January 2005 oral evidence session. I said that SBAC
was delighted to have been invited to give evidence on the work
of the Civil Aviation Authority (CAA). I was, however, concerned
that the tight schedule faced you faced and the emphasis in questioning
on the GA sector, may have left the Committee less than satisfied
that the opportunity to follow up on SBAC written evidence had
been fully exploited. You very kindly invited me to write to you
with further advice on the evidence already submitted and I am
therefore doing so.
I made the point during the session that in
representing 2,500 companies supplying the civil air transport,
aerospace defence, homeland security and space markets the SBAC
has an interest in, but by no means limited to, the GA sector.
The primary interaction between SBAC members and the CAA is in
the safety and certification of both civil and military aircraft
and equipment of all types inclusive of large civil air transports
during design, manufacture and subsequent in-service maintenance.
These processes are fundamental to the safety of all aircraft
flying, whether in the GA sector, or in the military or in use
by the major airlines to carry fare-paying passengers. Our membership
includes Rolls-Royce, BAESYSTEMS, Airbus UK as well most of the
UK systems and component suppliers and SMEs operating in the major
aircraft manufacturing supply chains. SBAC is the only UK national
trade association representing companies in this area. The certification
of components and equipment designed, built and maintained by
the sector is the only area of operation that EASA has thus far
taken over from the CAA, with work already under way on major
type certification projects inclusive of the Airbus A380 and A400M
and the Rolls-Royce Trent 1000 engine. The sector is therefore
exceptionally well placed to assist the Committee on the basis
of practical experience of the impact of transferring regulatory
activity from the CAA to EASA, a process that we intended our
evidence to highlight as perhaps the major challenge currently
facing the aviation community, the CAA and concerned decision-makers
in the area of safety regulation.
BUDGET DEFICIT
AT EASA, IMPACTS
ON SAFETY
CERTIFICATION
Our written evidence of 14 November 2005 commented
on the lack of clarity evident with respect to CAA and EASA financing
arrangements during the current period of transition. The situation
has since moved on. The Committee has heard evidence from the
CAA concerning a significant problem with the EASA budget. It
was suggested that the Agency could slow down or stop certification
activities and that funding might run out in six months".
If true, this is wholly unacceptable to industry both in financial
and contractual terms and more importantly in terms of the possible
implications for the certification and safety of aircraft and
their components in the European Union. SBAC representatives were
present at an EASA briefing to industry in Cologne on 17 November
2005 at which the Executive Director of the Agency, Patrick Goudou,
acknowledged that EASA was in trouble on the budget". Attendees
were told of a forecast €13loss on an expected income of
€45 million in 2005, with only €10 million thus far
invoiced to industry at that point in time.
It is not clear how the funding shortfall has
occurred. Poor planning and forecasting, administrative and process
inefficiencies, inadequate support from the Commission and possibly
the costs of outsourcing audits and inspections to National Authorities
may all have contributed.
The experience of our member companies would
tend to suggest that process inefficiencies consequent on the
way in which the Commission has required EASA to implement the
EASA regulations are a particular problem. The way in which the
financial management of fees and charges has apparently had to
be integrated into the process of applying for and obtaining equipment
certification has impacted seriously on costs, timescales and
cash management for both the Agency and its customers. SBAC takes
the view that this is a matter requiring urgent attention. If
necessary and appropriate, changes to the relevant regulations
to assist EASA and the Commission in establishing a realistic
budget for 2006 and a fees and charges regime should be implemented
now.
On 16 November 2005 the European Commission
adopted a proposal to extend EASA's remit during 2006 to include
operation rules, flight-crew licensing and training and third-country
operator aircraft. It is also expected that EASA will soon take
over safety-related aspects of air traffic management. It is estimated
that an increase in staffing levels from 200 to 800 in 2010 will
be required to accommodate these changes. In budgetary terms this
could correspond to an increase from €71 million in 2005
to €137 million in 2010. Nothwithstanding a recent assertion
by the Secretary of State to the effect that EASA has enough money",
it is not clear to industry how this will be financed. SBAC therefore
supports the position that the current situation must be seen
to be capable of early resolution before additional responsibilities
are taken on.
HAMPTON REVIEW—LIGHT
TOUCH REGULATION
EASA relies more on the internal policing"
of regulatory frameworks by industry itself than in the past.
This requires that TC holders regulate their supply chains, more
rigorously, than in the past and incurs additional costs. It is
only in the former context that SBAC recognises the term light
touch" as in any way relevant to the regulation and certification
of aviation products and components. The overall impact is no
less rigorous in assuring aviation safety and clearly both right
and important that this should be so.
The demand for high safety standards is not
solely driven by regulation, but by the demand of airlines for
reliable equipment that transport passengers in a safe environment
and by the recognition that companies are fully accountable in
this respect. Safety of aircraft is an absolute priority in the
manufacture of components and equipment which contribute to the
construction of whole aircraft. That UK aircraft and air systems
suppliers continue to deliver on safety is therefore critical
to their survival in a fiercely competitive international market.
The industry's record of safe operation alongside commercial success
speaks for itself.
Given the international character of the industry
and its regulatory framework and the particular technical challenges
of aviation safety, SBAC is by no means convinced of the relevance
of the concept of a single UK transport regulator arising out
of Hampton's recommendation in favour of thematic consolidation".
Of more relevance to a better regulation"
agenda would be a review of the way in which the recommendations
of the Better Regulation Task Force in relation to improving EU
regulation might impact on EASA. SBAC would be pleased to support
work in this area.
SBAC MEETING WITH
EASA CERTIFICATION DIRECTOR,
DR NORBERT
LOHL
SBAC is in direct dialogue with EASA in relation
to concerns within the industry. A first formal meeting took place
in Cologne with Dr Norbert Lohl and his colleagues in the Certification
Directorate on 19January 2006. Representations have previously
been channelled through the Aerospace and Defence Industries Association
of Europe (ASD), based in Brussels, and through the EASA Advisory
Board. We would be very happy to provide additional information
to the committee on the issues to be taken forward as a result
of this direct interaction. Should you feel that a private briefing
to Members would be helpful and appropriate in this respect, or
in relation to any of the other matters highlighted above and
in our written evidence, we would be more than happy to oblige.
19 January 2006
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