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State Aviation Working Group Advice

Air Transport Regulation and Licensing in NSW

Legislation

Air Services within NSW linking smaller communities to Sydney Kingsford Smith Airport are regulated by the New South Wales Government, under the Air Transport Act 1964 (the Act).

Amendments to the Act came into effect on 1 July 2006.

The amendments abolished the previously mandated State licensing and associated fees for both air charter companies operating within NSW and airlines flying the larger intrastate routes.

The legislation allows for airline routes servicing smaller communities to continue to be licensed and regulates air transport on those routes, to encourage stability, route development and continuity of services.

Charter operators are no longer required to hold a State licence, however provisions continue to apply to ensure that only authorised airlines provide regular public transport services.

The Minister has the power to deregulate intrastate air routes and has declared as deregulated the routes between Sydney Kingsford Smith Airport and Albury, Armidale, Ballina, Coffs Harbour, Dubbo, Port Macquarie, Tamworth, Wagga Wagga and Williamtown, and any routes not linked to Sydney Kingsford Smith Airport.

Also, a Regulation under the Act requires all operators to submit quarterly passenger statistics to the Ministry of Transport, for each route linked to Sydney Kingsford Smith Airport, whether regulated or deregulated. This Regulation is to ensure continued collection and publication of data on intrastate airline activity.

The licensing functions on regulated routes is vested in the Director General. There is now an appeal provision, absent prior to 1 July 2006, making decisions made by the Director General with respect to a licence application reviewable by the Administrative Decisions Tribunal.

The Air Transport Council was abolished and has been replaced with a more relevant State Aviation Working Group to ensure representation that includes local government and the airline industry.

Air Regulation Policy

New South Wales intrastate air routes (to/from Sydney Kingsford Smith Airport) are regulated unless declared deregulated by the Minister. The following policy currently applies:

  • the threshold for a route being allocated to one operator only by licensing is that the route operates at or below 50,000 passengers per annum;
  • the 50,000 threshold was adopted in October 2002;
  • five-year licences (March 2003 - March 2008) were committed to concurrently;
  • where regulated routes now exceed the 50,000 level, the five-year commitment takes precedence over deregulating the routes;
  • regulated route licences will run their full term, subject to licence conditions.

Routes with an annual passenger volume above 50,000, which account for some 75% of all intrastate passengers in NSW, are deregulated, as are any intrastate air routes not linked to Sydney Kingsford Smith Airport.

Issues such as aviation security, safety and airworthiness of aircraft, competence of the flight crew, maintenance systems and operations management, are covered by Commonwealth Government regulations. State Government regulation of intrastate air services applies only to route-operator allocation and does not cover issues of safety.

Before the threshold policy decision was made in 2002, the Government had considered work undertaken by airline Administrators, following the collapse of Ansett and its regional subsidiaries, on the viability of regional air services. Outcomes of this work can be summarised as follows:

  • In terms of providing a commercial return to operators, it was considered that there was scope for two airlines only on routes with a volume in excess of approximately 100,000 passengers per annum.
  • In the range 100,000 to 65,000, the analysis considered that these ports would be capable of supporting one carrier with full time aircraft and another with partly committed aircraft.
  • Between 65,000 and 35,000 the view was that only one operator using 36 seat aircraft full time would be commercially viable.
  • Towns generating passenger volumes between 35,000 and 6,000 could support one carrier using 19 seat aircraft on a full time or part time basis.
  • Below 6,000 passengers per annum, it is thought that only small 9-12 seat aircraft would be viable, generally feeding into larger regional centres and having on line booking arrangements with one or more of the principal carriers.

Current experience in NSW is that airlines compete on routes in excess of about 100,000 passengers per annum, with competition also occurring on the Sydney-Williamtown route, at approximately 50,000 passengers per annum.

There are currently three deregulated routes, operating between approximately 50,000 and 100,000 passengers per annum, without competition.

State Aviation Working Group

Under the Act, a State Aviation Working Group is established and has the following functions in relation to the provision of air transport services within NSW, to:

  1. advise the Director-General (and, through the Director-General, the Minister) on matters relating to the regulation of those services, including the policies and strategies to be adopted in relation to those services;
  2. provide information concerning the regulation of those services to persons having an interest in the provision of those services, including both State and local government agencies; and
  3. seek the views of persons having an interest in the provision of those services in relation to the regulation of those services.

The Group has 7 members, representing each of the following organisations:

  • Ministry of Transport;
  • Department of Planning;
  • Tourism NSW;
  • Department of State and Regional Development;
  • Shires Association of NSW;
  • Regional Aviation Association of Australia; and
  • Australian Airports Association.

In accordance with an undertaking made when debating the 2006 amendments to the Act in Parliament, a nominee of each airline serving smaller communities is invited to attend the Working Group as an observer, subject to the same rules of disclosure of pecuniary interests as members.

In April 2007 the Working Group provided advice and recommendations to the Director-General, Ministry of Transport (and through the Director-General, to the Minister) regarding aviation regulation. The NSW Government has adopted all recommendations made to it by the Working Group. The following link provides the details of the Working Group's advice.

Expression of Interest

An Expression of Interest in the air transport regulated route licences serving Moree and Narrabri was advertised on 4 July 2008. The associated licences will take effect for 4 years, to March 2013, to coincide with all current regulated route licences. The Expression of Interest closes Friday 18 July 2008.

Ministry of Transport

The Ministry's reception is at Level 21, 227 Elizabeth Street, Sydney NSW 2000. Correspondence and information requests on regional aviation matters should be directed to:

Senior Policy Officer - Aviation and Security: Robert Carnegie, Tel: (02) 9268 2801, Fax: (02) 9268 2892, Email: rob.carnegie@transport.nsw.gov.au

Mailing Address: Ministry of Transport, GPO Box 1620, Sydney NSW 2001

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