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Report on performance

4. Outcome 2 - Transport

Output 2.3.3 - Aviation and airports policy, programs and regulation

Highlights

In 2008-09, the Department worked with stakeholders to progress the development of an Aviation White Paper as a comprehensive statement of national aviation policy.

An Aviation Green Paper was released by the Minister in December 2008, proposing a range of initiatives to provide greater planning and investment certainty for the industry as well as clear commitments for users of aviation services and communities. The release of the Aviation White Paper is scheduled for the first half of 2009-10.

In accordance with initiatives announced in the Aviation Green Paper, the Department implemented important governance changes to the Civil Aviation Safety Authority (CASA) and the Australian Transport Safety Bureau (ATSB) through amendments to the Civil Aviation Act 1988 and the Transport Safety Investigation Act 2003.

The new governance arrangements introduced a small strategic board for CASA and strengthened its enforcement powers across a number of areas. The ATSB was established as an independent statutory authority within the portfolio with a new commission-based structure. The new governance arrangements commenced on 1 July 2009.

The Department also provided advice to the Minister on a number of airport master plans and major development plans including the Sydney Airport Master Plan 2009, which was approved by the Minister on 19 June 2009.

The Department continued to successfully negotiate enhanced air services agreements with a number of countries, including Brazil, Japan, the Philippines, Thailand and Qatar.

Overview

Output 2.3.3 is delivered through the work of the Aviation and Airports division which:

  • ensures that the Australian aviation industry operates in a clear and robust safety regulatory environment; and
  • facilitates access to competitive international and domestic air services for Australian businesses and consumers.

The output included the following administered programs:

  • Airport Lessee Companies - reimbursement of parking fines;
  • Fort Street High School - noise insulation;
  • Implementation of noise amelioration for Adelaide Airport;
  • Implementation of noise amelioration for Sydney Airport;
  • International Civil Aviation Organization - contribution;
  • Payment scheme for Airservices Australia's en route charges;
  • Remote Aerodrome Safety; and
  • Sydney West Airport - rental properties.

The budget and actual expenditure for each administered program is listed in Appendix A.

Summary of performance

Table 4.10 summarises the Department's results in delivering Output 2.3.3 against the key performance indicators and targets published in the 2008-09 PBS.

Table 4.10 Summary of performance - Output 2.3.3

Key performance indicator Target Result
Outputs

Aviation industry operates within a clear and robust safety regulatory framework

New aviation safety agency governance arrangements agreed.

Amendments were made to the Civil Aviation Act 1988 and Transport Safety Investigation Act 2003 to implement agency governance arrangements.

The new CASA Board and ATSB Commission were appointed.

Businesses and consumers have access to competitive international and domestic air services

Agreements which provide increased flexibility and capacity are established, consistent with government policy.

Updated air services agreements/arrangements were negotiated with 9 other bilateral partners.

Aviation relations with the European Union, Australia's largest aviation market, continue to develop. The Department held two rounds of negotiations towards an Australia-European Union comprehensive air services agreement, which will encompass a range of priorities in relation to aviation safety, security and the environment.

Leased airports are regulated in accordance with the Airports Act 1996

Master Plans and Major Development Plans assessed in accordance with legislative requirements and advice provided to Minister.

In 2008-09 the Department assessed a number of airport statutory planning documents and provided advice to the Minister in accordance with the requirements of the Airports Act 1996. These included the new Sydney Airport Master Plan.

Table 4.11 provides a summary of the results achieved by each of the programs administered under Output 2.3.3 against the key performance indicators and targets published in the 2008-09 PBS.

Table 4.11 Summary of performance - Output 2.3.3 administered programs

Key performance indicators and targets
Applicable administered program Key performance indicator
Target

All programs

Efficient and effective management of administered programs

Programs are administered in accordance with relevant legislation, published guidelines and ANAO guidance.

Implementation of noise amelioration for Sydney and Adelaide Airports

Community exposure to aircraft noise around Sydney and Adelaide Airports monitored regularly to identify any additional eligible buildings.

Noise contour maps produced for Sydney and Adelaide airports.

Warranty claims finalised.

Payment scheme for Airservices Australia's en route charges and Remote Aerodrome Safety

Air access to regional and remote communities is supported

Costs for airlines providing regular public and/or aeromedical services to regional areas reduced.

Safety of airstrips improved.

Sydney West Airport - rental properties

The Department effectively manages leases at Badgerys Creek

Approximately 250 leases managed.

Results
Administered program Result

Airport Lessee Companies - reimbursement of parking fines

The Department reimbursed the regulated airports on the basis of parking fine revenues collected and paid to the Commonwealth.

Streamlined reporting of infringements and revenues, and more appropriate banking periods.

Fort Street High School - noise insulationa

After an offer from the New South Wales Government to manage this project on behalf of the Commonwealth, negotiations commenced to enable this to occur early in 2009-10.

Implementation of noise amelioration for Adelaide Airport

Two additional eligible churches were identified and work is underway to commence insulation works in 2009-10. All other eligible insulation works are complete; only a few warranties are still current.

Implementation of noise amelioration for Sydney Airport

All insulation works were completed some time ago. Australian Noise Exposure Index monitoring is ongoing with no additional eligible buildings identified

International Civil Aviation Organization - contribution

Australia actively participated in the International Civil Aviation Organization (ICAO) Council during 2008-09, with two employees based in the Montreal office representing Australia in ICAO Council matters and on the ICAO Air Navigation Commission. The annual contribution was paid during January 2009.

Payment scheme for Airservices Australia's en route charges

Twenty-five airlines sought assistance during 2008-09. The Department paid invoices in a timely manner, conducting payment runs weekly

Remote Aerodrome Safety

Upgrades to a total of 47 aerodromes in remote locations across Australia were approved for funding under the program in 2008-09. These upgrades improved safety for aircraft operators and their passengers through a range of measures such as:

  • runway sealing, resealing and pavement repairs;
  • the installation of runway lighting to enable night operations, including medical evacuations; and
  • the installation of animal-proof perimeter fences.

Sydney West Airport - rental properties

The Department effectively administered the leases during 2008-09 to ensure the Australian Government met its obligations as a landlord. This included authorising maintenance to ensure properties remain in reasonable condition; and ensuring water and land rates have been paid.

a Effective 1 January 2009 the Treasury is responsible for payments to state and territories for National Partnership payments. Hence this program does not appear in Appendix A Table A.6 'Administered program expenses - Outcome 2'. Further information on this administered program can be found in the Treasury's PBS program information.

Detailed report on performance

The following report is against the headings from the applicable output from the 2008-09 PBS.

I    Development of an Aviation Policy White Paper

The Department's release of the Aviation Green Paper in December 2008 was an important milestone in the development of the Aviation White Paper, which will be Australia's first comprehensive statement of a national aviation policy.

The Aviation Green Paper took into consideration 295 submissions made in response to an issues paper released by the Department on 10 April 2008. It outlined a range of proposed policy initiatives, guided by four key principles:

  • safety is the number one priority for the aviation industry and the government;
  • the aviation industry is a key driver of economic prosperity and a strategic approach is required to secure its future;
  • a coordinated approach to airport infrastructure investment is required to allow the industry to reach its full potential; and
  • a responsible approach is required to managing environmental impacts, including emissions and noise.

Interested parties were invited to provide submissions and comments on the proposed policy initiatives described in the Aviation Green Paper; the Department received more than 230 submissions in response.

Input for these submissions and consultations with stakeholders will inform the government's development of the Aviation White Paper, which is expected to be released in the second half of 2009.

II    Maintaining aviation safety

The Department contributed to the international regulatory environment for aviation by participating in international forums and working with aviation regulators in the Asia-Pacific region to enable regional economies to collaborate on aviation safety and security oversight.

Participation in international forums

As part of Australia's responsibilities as a member of the ICAO, an audit of Australia's aviation safety regulatory oversight was conducted by a team of international experts in February 2008. The audit included scrutiny of Australian aviation agencies with responsibility for aviation safety oversight and service provision: the Department; Airservices Australia; the Australian Transport Safety Bureau; the Civil Aviation Safety Authority (CASA); the AMSA (in relation to search and rescue); and the Bureau of Meteorology (in relation to aviation meteorological services).

The final report, including Australia's Corrective Action Plan, was released in February 2009. The Australian Government and ICAO agreed that the report could be made public; it is now available on the websites of the Department and ICAO. The overall result was good, with Australia rated as achieving a high level of effective implementation in seven of eight critical element categories that form the basis of the assessment.

The audit team made a number of findings and recommendations for improvement. Many of the findings relate to the technical personnel and training criterion, under which Australia was assessed as achieving only a passable level of effective implementation of the relevant ICAO requirements.

All relevant agencies are undertaking corrective actions to address those findings, the details of which are in the published report. An interagency working group, chaired by the Department, is managing the implementation of Australia's Corrective Action Plan.

The Department administered Australia's ICAO annual contribution and hosted a visit of the ICAO President in October 2008.

Cooperation in the Asia-Pacific region

The Department took part in projects to assist Australia's neighbours to improve the safety, security and effectiveness of their air transport regulation. This included providing policy, safety and security advisers to Papua New Guinea through the Strongim Gavman Program, and assistance to the Pacific Aviation Safety Office through the Pacific Public Sector Linkages Program (formerly known as the Pacific Governance Support Program).

The Department continued to coordinate the Australian Government's Indonesian Transport Safety Assistance Package, which commenced in July 2007 and provides technical and training assistance to support Indonesia in addressing its aviation and maritime transport safety challenges. The assistance package was recently expanded to include road safety.

As well as the Department, the package involves Airservices Australia, AMSA, ATSB and CASA through agency agreements, with the agencies reporting to the Department against an agreed set of key performance indicators on a quarterly basis. Significant outcomes in 2008-09 included:

  • the completion of the largest ever civil joint Australia-Indonesia search and rescue exercise;
  • the delivery of staff training in procedures for air navigational services and human factors training for accident investigators; and
  • the completion of aerodrome safety management systems workshops.

Aviation safety regulation

The Department worked closely with CASA and Airservices Australia to ensure the safety of the aviation sector, and provided advice to the Minister on strategic oversight of CASA and Airservices Australia.

In accordance with the priorities identified in the Australian Government's Aviation Green Paper, the Department implemented the governance changes to CASA and the ATSB, through amendments to the Civil Aviation Act 1988 and the Transport Safety Investigation Act 2003. The Department was involved in the development of the new governance regime, appointment of the CASA Board and the ATSB, and advised the Minister throughout the process before the new changes were implemented on 1 July 2009.

The new governance arrangements:

  • introduced a small strategic board for CASA, and strengthened CASA's enforcement powers across a number of areas; and
  • introduced a governing commission for the ATSB, and made the ATSB an independent statutory authority within the Infrastructure, Transport, Regional Development and Local Government portfolio.

Air traffic management

The Department provides policy and governance advice to the government on air traffic management issues.

In conjunction with the release of the Aviation Green Paper, the Department publicly released a draft updated Australian Airspace Policy Statement for comment. The Department is considering responses from government aviation agencies and industry, and expects to provide an updated Australian Airspace Policy Statement to the Minister for consideration early in 2009-10.

The four major government agencies involved in aviation policy, regulation and service provision - the Department, Airservices Australia, CASA and the Royal Australian Air Force - continued to work together on a range of aviation policy issues which have cross-agency implications.

The Secretary of the Department is the Chair of the Aviation Policy Group; the group's other members are the chief executive officers of the three agencies. While the group offers a forum to maintain strong working relationships between the agencies and coordinate joint action where appropriate, each agency retains the individual authority and accountability for its own functions at all times.

The Aviation Policy Group met seven times in 2008-09, and discussed aviation issues such as input into the national aviation policy development process, civil operations at military airports, civil and military aviation harmonisation, airspace management, technology and ICAO-related issues.

The Aviation Implementation Group (AIG), also chaired by the Department and including senior officials from each of the three key government aviation agencies, is responsible for carrying forward issues identified by the Aviation Policy Group.

As foreshadowed in the Aviation Green Paper, the AIG is establishing a closer relationship with the reinvigorated Australian Strategic Air Traffic Management Group (ASTRA), the industry advisory group on air traffic management issues. This will be achieved through regular reports from the new independent ASTRA industry chair to AIG, and through clearer identification of the matters on which ASTRA can provide the most valuable advice.

III    Expanding aviation markets

International air services arrangements

In 2008-09, the Department continued to negotiate towards a comprehensive Australia-European Union air services agreement, to improve connectivity and air services opportunities with Australia's largest aviation market. The second round of negotiations with the European Union was held in June 2009. The new agreement is expected to encompass issues such as market access, protection of the environment, aviation safety and security, and will expand opportunities for airlines to provide a competitive network of air services. It will complement the 'open skies' arrangements settled with the United States in 2007-08.

The Department also conducted international air services consultations with nine other partners or potential partners.

  • The Department established new or updated air services agreements and/or arrangements with Brazil, Japan, the Philippines, Thailand and Qatar, resulting in the expansion of commercial rights for airlines of both sides. These arrangements provide for additional capacity and traffic entitlements and are immediately available to be used by the airlines of these countries.
  • The Department settled the texts for inaugural treaties with Bangladesh and Peru, and worked with its negotiation partners to refer the new treaties to their respective governments for consideration, with a view to entering the treaties into force and enabling the commencement of commercial operations.
  • The Department held discussions with Canada and Chile that resulted in agreement to maintain existing commercial entitlements and continue consultations at a mutually agreed date in 2009-10.

The Department continued to regulate scheduled international air services in accordance with the requirements of the Air Navigation Act 1920 and associated regulations, including new regulations introduced in March 2009. The Department granted 242 timetable approvals, 210 timetable variations, 10 non-scheduled flight approvals and nine approvals for International Airline Licences in 2008-09.

Current aviation market

The air services arrangements negotiated by the Department provide capacity entitlements exceeding current demand, giving airlines flexibility to deliver air services in a commercially viable way. Approximately 50 international airlines operated services to/from Australia in 2008-09, including five dedicated freight airlines. With the exception of a few markets, overall capacity in terms of seat numbers provided by the airlines increased, including on routes via China, India, Indonesia, Malaysia New Zealand, Singapore, Taiwan, and the United Arab Emirates.

In terms of market uptake, Australia's aviation performance in 2008-09 was mixed. Data from BITRE shows, in the year ending March 2009, there were 23.5 million passenger movements into and out of Australia, representing growth of 1 per cent in the previous 12 months. Of the total international passenger movements, short-term resident departures comprised 5.8 million passengers, an increase of 2.9 per cent on the previous year. Of those, 5.5 million were short-term visitor arrivals into Australia; this represents a decrease of 2.1 per cent over the number of visitors in the previous 12 months.

IV    Managing airport infrastructure

Management of leased federal airports

The Department oversights the operation of the 22 federal airports that were privatised between 1997 and 2003 through long-term leases of 50 years with an option to renew for a further 49 years.

The lease granted over Hoxton Park airport was an exception. The lease expired on 27 October 2008, with the airport site converting to freehold title. The airport ceased operating with effect from 28 October 2008 and is no longer a Commonwealth site, reducing the number of leased federal airports to 21.

The Department is responsible for monitoring compliance with the airport leases, ensuring compliance with the Airports Act 1996 (Airports Act) and associated regulations.

In 2008-09, the Department finalised various amendments to the regulations. These regulations were amended to ensure consistency with changes to the Airports Act that commenced in 2007, changes in the corporations legislation, and changes in the airport price and quality of service monitoring regime conducted by the ACCC. Amendments were also made to reflect the change in name of the Gold Coast Airport and to delete references to Hoxton Park Airport.

An overview of the Department's airport regulation program is provided in Appendix I.

Planning approvals

Under the Airports Act, a master plan must be prepared for every leased federal airport except for Mt Isa and Tennant Creek airports. The master plan represents the airport-lessee company's planning and development vision for the airport over a 20-year period. The master plan is reviewed every five years, and must be the subject of public consultation, and requires the Minister's approval.

In addition, a major development plan is required for each major development. Section 89 of the Airports Act defines major developments; generally, they include any significant building work or any development with a significant environmental impact on the airport site.

All airports other than Mt Isa and Tennant Creek must also prepare an airport environment strategy which provides for continuous improvement in the environmental management of the airport site. An airport environment strategy is submitted by an airport-lessee company after taking into account public comments, and is reviewed every five years.

The Minister may approve or refuse to approve any master plan, major development plan or environment strategy.

In 2008-09, the Department provided assessments to the Minister in accordance with the requirements of the Airports Act on:

  • four airport master plans;
  • seven major development plans; and
  • one airport environment strategy.

A number of the major development plans were approved subject to conditions relating to the management of the impacts of the development and ongoing operational considerations. The conditions of ministerial approval attached to each major development plan are available from the Department's website.

Details on each of these statutory planning documents is provided in Appendix I.

Environmental management and building control

Management of the environment at the airport site is the responsibility of the airport lessee. Through the Airports Act and the Airports (Environment Protection) Regulations 1997, the Department monitors compliance and regulates activities that may have environmental impacts on the airports. Through the Airports Act and the Airports (Building Control) Regulations 1996, the Department monitors compliance and regulates development on the airports.

The Department has appointed Airport Environment Officers (AEOs) and Airport Building Controllers for each of the leased airports to monitor and ensure compliance with environmental and building standards.

Lease compliance reviews

The Department conducts annual lease reviews of the 21 leased federal airports to ensure compliance with the terms of their leases. In 2008-09, the Department continued to monitor compliance with obligations under the terms of the head lease, including the requirement to make payments in lieu of land taxes and rates, and assessing the adequacy of airport insurance cover each year with the assistance of a contracted insurance adviser.

Details of the annual airport lease review meetings and the insurance review for 2008-09 are in Appendix I.

Slot management at Sydney Airport

The Department oversees slot management at Sydney Airport under the Sydney Airport Demand Management Act 1997. The objectives of the regime are to:

  • provide an effective means of administering the movement limit;
  • alleviate delays caused by congestion;
  • safeguard access for regional airlines;
  • provide equal access to slots for new entrants; and
  • spread aircraft movements more evenly within hours.

On 12 January 2009 the Sydney Airport Demand Management Amendment Act 2008 commenced.

Key changes included clarification on the definition of a slot to ensure consistency with international practice by linking movements to the scheduled arrival and departure time of an aircraft at the gate, and ensuring allocations under the Slot Management Scheme are consistent with the maximum movement limit.

The Department also developed amendments to the Sydney Airport Demand Management Regulations 1998, which commenced on 4 May 2009. Key provisions include clarifying requirements relating to access and management of records of the slot manager, data collection, and reporting arrangements.

The Department is developing consequential amendments to the Slot Management Scheme 1998, and the Determination of Sydney Airport Compliance Scheme 1998.

Reimbursement of parking fines

At eight regulated federal airports (Brisbane, Gold Coast, Hobart, Launceston, Melbourne, Perth, Sydney and Townsville), the Department collects fines for parking offences in the airport precincts and reimburses the funds to the airport lessees. In 2008-09, the Department's service agreements with the airports were amended to improve the efficiency of this program. The changes included streamlined reporting of infringements and revenues and more appropriate banking periods.

Ameliorating the environmental impacts of aircraft movements

Noise amelioration programs

In 2008-09, the Department continued to assist Adelaide Airport and Sydney Airport and local communities to work together to minimise the impacts of aircraft noise. The noise amelioration programs for both airports are being wound down after having proven to be an effective tool to help reduce the impacts of aircraft noise for residents living near airports.

The programs include funding to install noise insulation for eligible residences and public buildings under major flight paths. Two new churches (eligible under the guidelines as public buildings) were identified in Adelaide in 2008-09; insulation work is expected to commence on the buildings early in 2009-10.

The Department's ongoing management of a limited number of warranty issues will continue in 2009-10. The Department will also continue to monitor and map the noise contours in Sydney and Adelaide on an annual basis.

The costs associated with the noise amelioration program at Adelaide Airport are recovered through a levy on jet aircraft landings at the airport, under the Aircraft Noise Levy Act 1995. (The equivalent levy at Sydney Airport ceased on 1 July 2006.) Airservices is authorised to collect the levy on behalf of the Department. Receipts totalling $8.2 million collected under the Aircraft Noise Levy Collection Act 1995 are reported in the Department's audited financial statements as required by the Act.

Curfews

To minimise the impact of night-time noise on nearby communities, restrictions on aircraft movements are applied, through legislated curfews, at the Adelaide, Essendon, Gold Coast and Sydney airports. The curfews, which operate between the hours of 11 pm and 6 am, limit the number and type of aircraft that can be operated and stipulate which runways can be used.

In 2008-09, the Department:

  • assessed 93 applications for curfew dispensation - 23 for Adelaide, one for Essendon, 10 for Gold Coast (Coolangatta) and 59 for Sydney airports; and
  • approved 55 curfew dispensations - 17 for Adelaide, five for Gold Coast and 33 for Sydney airports.

International cooperation

The Department represented Australia on the ICAO Group on International Aviation and Climate Change, which was established to recommend an aggressive program of action to address greenhouse gas emissions from international aviation. The program of action developed by the group will be considered at a high-level meeting of ICAO member states in October 2009. The Department also participated in international forums that are working to address the problems of aircraft noise, such as ICAO's Committee on Aviation Environmental Protection and APEC's Transportation Working Group.

Community resources

The Department continued to provide secretariat support to the Sydney Airport Community Forum. The forum is a consultative committee composed of federal, state and local government and community representatives, which considers aircraft noise issues affecting the community.

The Department also continued to refine its Transparent Noise Information Package, a software tool that enables the non-specialist to gain a better understanding of aircraft noise exposure patterns and aircraft carbon emissions. The package is available free of charge from the Department's website.

Management of properties at Badgerys Creek

The government owns and leases out commercial and residential properties on a site at Badgerys Creek, New South Wales, originally acquired for a proposed second major airport for Sydney. The Department administered the leases during 2008-09 to ensure that the government met its obligations as a landlord.

As part of the development of the Aviation White Paper, the government announced that the construction of an airport at Badgerys Creek is no longer an option. The future of the Badgerys Creek site will be considered as part of a joint Australian Government-New South Wales Government study to assess options for delivering additional airport capacity in the Sydney region.

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