Select Committee on Transport Written Evidence


Memorandum submitted by W H Handley

  I am taking the opportunity of your review of the remit and funding of the CAA to express my views on those areas of its activities that I believe need changing. Accepting that there are areas for which the CAA carries out commendable work, there are aspects of its operation that I believe do not effectively serve the public interest or the interests those it seeks to regulate.

  In writing, I would declare my interest as a private pilot and member of a group operating a light aircraft. Our experience has been that both the level of regulation and the costs imposed upon us, with no recourse to appeal, has risen steadily over the past 15 years and is expected to grow exponentially over the next few years.


  It is of concern to me that the CAA decides its own agenda and its actions and priorities are not subject to oversight by any elected or independent body. This leaves the CAA in the position where it can decide its own staffing, recruitment policies, budgets and activities and simply charge them to the aviation industry. There is a need for a system of oversight which would require the CAA to justify its activities and costs.


  The safety record of general aviation needs to be considered separately to the safety record of commercial aviation. The UK large public transport operations record is better than the United States, which is the comparator most frequently used, the US airline safety record is poorer largely because of the record of commuter airlines, which have no real parallel in the UK.

  As far as general aviation is concerned, the UK's safety record is possibly marginally worse than the USA in spite of the substantially greater burden that the CAA imposes on general aviation in comparison with the FAA. This demonstrates that more regulation does not mean more safety. Data from AOPA supports this. Those countries in Europe, which have almost regulated general aviation out of existence, generally have the poorest safety records. Safety is promoted primarily by pilot currency and practice, and the growing level of costs imposed on general aviation by the CAA will, if not already, lead to general aviation pilots becoming less current than they should be. When the proposed increases in CAA charges are added to the recent substantial cost increases imposed on general aviation (eg fuel costs) it is likely that the industry could enter a downward spiral where the funds that are spent of flying have to be spread further leading to insolvencies within the industry as a whole as existing narrow margin are turned to deficit. It is certain that this would be followed by a rise in the accident rate as pilot currency declines.


  The staffing strategy of the CAA gives me great concern. Their practice of employing retired military officers and executives on short term contracts means that the level of commercial awareness within the organisation is lower than it should be and that those who make decisions frequently do not have to live with the consequences. Evidence of this is to be seen in the comment by the current Head of Safety Regulation that the introduction by the CAA of JAR-FCL was a disaster, for which he apologised! The executives and managers in the CAA should have a long term commitment to the industry such that they will be motivated to consult with their constituents and make decisions that they are prepared to live with rather than finishing their contracts and leaving for someone else to sort out.


  Cost charging to the airlines and general aviation needs to recognise the differences between the two. Airlines are mainly 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 even profit from the 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 and all their costs are offset against any tax on their earnings.

  In stark contrast, more than 70% of general aviation (GA) flights are for business or flight training. GA pays a full measure of fuel tax and VAT, its margins are close to non-existent and shrinking. GA pilots, who go on to fly for 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 apportioned accordingly.


  There must be a more justification to the repetitive inspections, which look like purely make-money projects. An installation check on a simulator or an aerodrome may be justified, (although the level of the charge is probably disproportionate), however annual and repetitive inspections when nothing has changed are unnecessary financial impositions on GA, training schools and student pilots. These inspections should be replaced by user monitoring coupled with 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. The option of derogating the activities of each department to the private sector, where the real expertise lies, should be evaluated. Does the CAA need a medical department, a legal department, CAAFU etc or could their activities be more cost-effectively carried out by the private sector with no diminution of safety?

  Does the CAA need offices in Kingsway Gatwick, as well as regional offices around the country? Should the CAA subcontract the issue of licences to the DVLA who could probably do the work more quickly and cost-effectively?


  Requiring the CAA to make a return on top of their charges for costs is out of line with European practice as a whole. Further, the activities of GA generate huge sums in VAT and tax from which the Exchequer benefits. At the very most this should be brought in line with the norm for the public sector of 3.5% but I would hope to see the CAA limited to covering its costs. There is no justification for the regulation of aviation safety to attract a profit requirement?

  I look forward to a positive outcome from your investigation, leading to improvements in the cost effectiveness and quality of the activities of the CAA.

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