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NSW Air Licence Assessment Procedure

Purpose

This outlines the assessment process and associated procedures for the allocation of regulated air transport route licences in NSW by the Ministry of Transport pursuant to the Air Transport Act 1964.

When an air licence application is required

Licences are issued for a set term with a common licence expiry date, currently a 5 year period. Prior to the end of this term, the Ministry will undertake an expressions of interest process followed by a licence application process.

Expressions of Interest (EOI) process

A public call for Expressions of Interest will be made by press advertisement for regulated route licences at least 9 months prior to the common licence expiry date.

Only airlines authorised under their CASA Air Operator's Certificate (AOC) to conduct regular public transport operations will be eligible to participate in an EOI process and subsequently apply for an air licence.

To be eligible to apply for a route licence, airlines must also respond to the EOI and nominate which routes they intend to serve. No licence applications or details of the service proposals will be required at the EOI stage.

This first stage enables confirmation of airline eligibility and nomination of the route licences for which each operator wishes to apply.

Following the EOI process the Ministry will:

• Write to each airline advising them as appropriate, of the contested and uncontested routes and the associated close of licence application dates
• Advise the Minister and relevant local councils of the outcome of the EOI process

Licence applications process

Criteria

The Act gives the Director General the functions of granting or refusing to grant an air transport licence. The Act also requires that in exercising these functions, the Director General shall have regard to matters identified in section 6(3) of the Act, as seem appropriate and to no other matters.

The matters identified in section 6(3) of the Act are:

1. The needs, in relation to air transport services, of the public of New South Wales as a whole and of the public of any area or district to be served by the route or routes, or by any of the routes, specified in the application for the licence
2. The allocation of routes for public air transport services so as to foster as far as possible the existence of more than one airline operating in New South Wales capable of providing adequate and reasonable public air transport services within New South Wales and so as to discourage the development of any monopoly of public air transport services within New South Wales
3. Where the applicant is an individual, the applicant's character and suitability and fitness to hold the licence applied for and, where the applicant is a corporation, the character of the persons responsible for the management or conduct of the corporation and the suitability and fitness of the corporation to hold the licence applied for
4. The effect, if any, on the maintenance and orderly development of adequate and reasonable public air transport services within New South Wales, of the operation of aircraft by the applicant over the route or routes specified in the application
5. The effect, if any, on the economic development of, or on the environment in, any area within New South Wales, of the operation of aircraft by the applicant over the route or routes specified in the application
6. Whether the applicant and the applicant's aircraft, pilots and passengers will be adequately insured
7. The ownership of, or the extent of the applicant's rights to operate, the aircraft to be used by the applicant

These matters therefore establish the criteria upon which applications must be assessed.

The application form sets out information to be provided, including on factors such as proposed timetables, aircraft size and capacity and airfares, which assists in assessing against the criteria.

Assessment

Applications are assessed against these criteria by an assessment panel established by the Ministry, comprising two Ministry personnel and one person who is independent of the Ministry and has knowledge of the regional aviation industry.

Prior to the panel making its assessment, the Ministry seeks local Council input in relation to the proposed services.

This recognises that local government not only represents the communities using the air services, but also has relationships with regional airlines through Councils' role as aerodrome owner and operator and provider of aeronautical facilities on a fee for service basis.

It is emphasised that when making licence decisions, the Ministry has regard to the matters identified in section 6(3) of the Act, as seem appropriate and to no other matters.

The Ministry is required to consider Councils' comments within this context and accordingly, Councils input should also address those same matters (1 to 7 above) as seem appropriate and no other matters.

Information security - licence applications

All parties, including the Ministry, applicants and Councils, must maintain confidentiality when dealing with information arising from these processes. For competitive application processes, confidentiality is required to ensure a fair and impartial process and to demonstrate the integrity of the process.

The ICAC has issued information which is relevant to these Assessment Procedures, including Providing advice on corruption issues - A guide for NSW Local Government Councillors, June 2004 and The Local Government Amendment (Discipline) Act 2004 and the ICAC, May 2005.

Failure to maintain confidentiality runs the risk of causing a loss of confidence, delays, appeals, referrals to the Independent Commission Against Corruption (ICAC) and discontinuation of the process, leading to the need to start again.

Although corruption is the most serious risk, the disclosure of application information can in itself also cause these issues to arise.

Different arrangements apply after licensing decisions are made, in that timetables and airfares tendered by licensees may then be released, in order to enable comparisons to be made between the actual performance and the originally proposed services.

Criteria scoring

A numerical scoring system is used in accordance with the guidelines tabulated below.

10	Exceptional. Achievement of the full potential for the particular criteria. Demonstrated strengths, no errors, risks, weaknesses or omissions.
8-9	Superior. Sound achievement of the potential for the criteria. Some minor errors, risks, weaknesses or omissions, which may be acceptable as offered.
6-7	Good. Reasonable achievement of the potential for the criteria. Some minor errors, risks, weaknesses or omissions, which can be corrected or overcome with minimal effort.
4-5	Adequate. Minimal achievement of the potential for the criteria. Some minor errors, risks, weaknesses or omissions, which are possible to correct or overcome and make acceptable.
1-3	Poor to deficient. No achievement of the potential for the criteria. Numerous errors, risks, weaknesses or omissions, which are difficult to correct or overcome and make acceptable.
0	Unacceptable. Totally deficient and extremely difficult to correct or overcome and make acceptable.

By their nature some issues do not lend themselves to purely objective measurement and their final assessment will depend on assessment personnel reaching a consensus.

While applications must be assessed against the stated criteria, it is recognised that scoring provides a methodology for ensuring consideration of each relevant element of the application.

Scoring is therefore a guide to the optimum result.

The assessment panel however must also take into account interaction between aspects which go beyond the basis of the scoring system and provide an assessment of which applicant would best enable the stated criteria to be met.

Review by Administrative Decisions Tribunal (ADT)

Under s.10A of the Air Transport Act 1964, an applicant for a licence may apply to the ADT for a review of a decision by the Ministry with respect to the application.

Administrative Decisions Tribunal Act 1997 (ADT Act)

One of the objects of the ADT Act is to provide a preliminary process for the internal review of a reviewable decision before the review of such decisions by the Tribunal.

The ADT Act indicates that an interested person may seek either or both of the following from the relevant agency:

• The reasons for the decision; or
• An internal review of the decision

Sections 49 - 52 of the ADT Act relate to the duty of an administrator to provide reasons upon request for a relevant decision.

In summary, once the Ministry makes a determination regarding a regulated route licence application, and advises the relevant parties of its decision, an interested person may make a written request to the Ministry for the reasons for the decision.

Within 28 days of receiving such a request, the Ministry shall either provide a written statement of reasons for the decision, or may refuse to prepare a statement of reasons.

Section 53 of the ADT Act relates to the conduct of internal reviews.

The officer who conducts the internal review will be a person who was not substantially involved in the process of making the decision under review, and will have the power to either affirm the decision, vary the decision, or set the decision aside and make another decision in substitution.

The Ministry is to make a determination on the application for a review of the decision within 21 days of receipt of the request.