Chapter 4
Related matters
4.1
This chapter considers other matters related to the inquiry's main terms
of reference (term of reference (j)).
4.2
The issues considered in this chapter are:
-
fatigue;
-
issues relating to cabin crew;
-
issues relating to flight crew; and
-
cost pressures impacting on the Australian aviation industry.
Fatigue
4.3
A considerable amount of evidence was received in relation to the issue
of fatigue affecting flight and cabin crew, and the extent to which fatigue
levels may be adversely impacting on airline safety in Australia.
Fatigue management
4.4
The committee heard from a number of stakeholders that expressed
significant concerns about the prevalence of fatigue affecting Australian
airline flight and cabin crews.
Flight crew
4.5
In relation to flight crew fatigue levels, the AIPA submitted that,
while it was difficult to accurately gauge the overall performance of fatigue
management systems given the variety of operating schedules in use by airlines,
'the existing framework works more often than not'.[1]
4.6
However, AIPA was concerned that, in some cases, specific rostering
patterns were emphasising 'productivity over risk management'.[2]
Further, it noted that 'fatigue management is not being adequately monitored by
CASA and may be subject to abuse by commercial imperatives'.[3]
4.7
Mr Terry O'Connell, Executive Director, Australian Federation of Airline
Pilots (AFAP), commented that the potential for fatigue had increased with the
advent of low cost carriers (LCCs) into the Australian market. He explained:
One of the major changes that has come about as a result of
low-cost carriers coming into Australia in particular is that aircraft are used
much more. They are much more productive. How do they become more productive?
They become more productive by flying more hours, and that is generally 'back
of the clock'. That is why you see the Melbourne-Darwin and the Melbourne-Denpasar
pairings. The aircraft are being used now much more than they used to be as a
result of the nature of the low-cost carrier mentality. That is why we have to
be far more vigilant in our roster pairing builds and other protection
mechanisms.[4]
4.8
The committee was concerned by an email that was sent from the then
senior Jetstar based pilot at Perth Airport to other pilots with regard to
fatigue. The email, sent on 7 January 2011, read:
"Toughen up princesses!
You aren't fatigued, you are tired and can't be bothered
going to work."
...
"In the last 4 weeks I have done 7 BOCs, 2 lots of back
to back and 1 after JQ117. I personally found the back to back the hardest and
after JQ117 no dramas. By trial and error I have worked out what works for me
so I can manage the shift. I can say that I hate the shift and I definitely
don't operate to my normal standard. I am tired throughout the shift, feel
terrible, but would not call it fatigued.[5]
4.9
Whilst Qantas group senior management said they did not have knowledge
of the document, the email raises serious questions about the corporate culture
governing fatigue in flight operations.
4.10
Furthermore, the existence of 12 Duty One extensions in 21 consecutive Jetstar
flights (on the Darwin-Singapore route) would seem to indicate a systemic
problem in route planning at the very least.
4.11
The committee also received evidence of significant concern regarding
the way fatigue was managed by some operators.
4.12
A CASA document titled 'Special Fatigue Audit: Jetstar' prepared on 10
May 2010 by Ben Cook of the Human Factors section highlighted concerns around
Jetstar's handling of flight crew fatigue, including that the operator favoured
operational benefits rather than focussing on safety risk management.[6]
4.13
The document also states that:
- No evidence has been provided to date to demonstrate appropriate
strategic assessment of fatigue risk;
- There was no evidence of pro-active fatigue risk assessment when
the new Darwin based was established;
- Evidence from interview and review of documentation highlights a
reactive system for managing fatigue with a heavy reliance on the CAO 48.0
exemption. The system is too reliant on incidents to occur and for reports from
flight crew to determine whether there is an unacceptable fatigue risk;
- There remains significant operation pressure for flight crew to
accept extensions of duty; and
- Based on feedback from operational personnel it is not considered
Jetstar management has created a culture of open and honest reporting of
fatigue risk. There remains reluctance from a number of flight crew to report
fatigue risk and/or to say no to an extension of duty based on the perceived
punitive nature of taking such actions. Open and honest feedback from
operational personnel is one of the key processes required to identify and
manage fatigue risk.[7]
4.14
The committee notes that this document as tabled was not provided to
Jetstar; rather a modified version of the report was provided, which did not
include the aforementioned concerns. However, it is noted that Jetstar has
changed pilot rosters for the Darwin-Singapore route.
Cabin crew
4.15
AIPA observed that cabin crew fulfil important safety functions on
commercial flight operations:
Cabin crew are part of the aircraft management team. More so
now than ever prior to the enforced separation of the cockpit security door,
cabin crew have to deal with many issues without the physical support of the
flight crew. AIPA believes that it is axiomatic that proper fatigue management
of cabin crew must be prescribed in legislation.[8]
4.16
In relation to cabin crew fatigue levels, Captain Klouth, who appeared
before the committee in a private capacity, remarked that the issue of fatigue
had been widely raised by cabin crew, and advised:
The consistent theme, particularly with cabin managers, is
that they are being rostered with such onerous duties with a little time off in
between that they are often coming to work very tired.[9]
4.17
Captain Klouth advised that cabin managers, who are in charge of the
safety of the cabin section of aircraft, were reporting being under significant
fatigue pressures due to certain rostering practices. He explained:
Cabin managers have told me of being rostered for 6 consecutive
days of usually 10 hours duty followed by a single day off then rostered for
another 5 days. The duties they are rostered for often consist of a series of
early morning starts followed by late starts and back of clock operations which
usually results in elevated levels of fatigue. Cabin managers have told me that
on occasions they have felt momentarily disorientated in the cabin and have
forgotten how to disarm an aircraft door...Cabin managers also say that if they
take sick leave then they are questioned by their manager.[10]
4.18
Captain Klouth remarked that, on longer flights, certain carriers did
not provide adequate cabin crew rest facilities. On a Jetstar Sydney-Honolulu
flight, for example, cabin crew were not able to lie flat and rest.[11]
4.19
In answer to a question on notice regarding the frequency of long shifts
for cabin crew, Qantas and Jetstar advised:
Jetstar has two international flying shifts in [the range of
15 hours duty]...which are rostered in accordance with the relevant labour
agreements. Crew receive a minimum planned rest period...equivalent to the duty
time operated. Jetstar international cabin crew are rostered an average of up
to two such duties a month, and as standard practice Jetstar rosters no more
than three a month. If a shift is extended due to operational reasons, crew
receive a minimum extended rest period...[12]
4.20
However, Ms Monique Neeteson-Lemkes, who appeared in a private capacity,
argued that rostering practices needed to take more account of certain duty
types and combinations carrying a higher fatigue risk. In answer to a question
on notice, Ms Neeteson-Lemkes stated:
[There is a need to]...put parameters and limitations around
types of duties rostered leading up to a back of the clock [shift] and after
completion of back of the clock...[Currently a] flight attendant can be rostered
a combination of earlies, standbys, lates and then a back of the clock. I've
not met one flight attendant who hasn't said this not only plays havoc on their
body but definitely affects the way they operate on flights as their bodies and
sleeping are disturbed and their bodies aren't able to adjust. This has an
adverse effect on safety whilst flying.[13]
Use of flight duty limit exemptions
4.21
AIPA was concerned that the limits set by the current standards could
see crews operating that were 'seriously fatigued', and noted also that
standard industry exemptions relating to flight time limitations, issued under
Civil Aviation Order (CAO) 48, were outdated compared to the current
understanding of fatigue management.[14]
4.22
The CASA website provides the following explanation of CAO 48:
A 'Standard Industry Exemption' is an exemption from the
flight and duty time limitations set out under CAO Part 48. Under CAO 48
Paragraph 4.1, CASA is authorised to issue an instrument in writing to exempt a
person from any of the requirements set out in Part 48. It is in effect a
permission from CASA for an operator to work to a different set of flight and
duty time limitations. CASA will only issue such an exemption to an operator
who has applied in writing to operate to the exemption and satisfied CASA that
they are operationally capable of working at an equivalent level of safety to
CAO 48, when operating to the flight and duty time limitations set out in the
exemption.[15]
4.23
A number of submitters and witnesses identified the extension of duty
times as an increasingly common practice that could contribute to the fatigue
of pilots and crews. Captain Woodward, noted that a CASA analysis of the
worst-case night-flying scenarios under CAO 48 suggested that operating crews
would be 'seriously fatigued'. Captain Woodward noted that the CAO 48
exemption suffered from a lack of clear definitions, particularly relating to
what constituted 'duty' for the purposes of calculating duty times.
4.24
As a particular example, Captain Woodward noted that certain crews
operating on a Darwin-Singapore-Darwin flight were commenting on the 'fatiguing
nature' of regular extensions of duty under CAO 48.[16]
The committee heard that, while some airlines require crew to fly long-haul
flights such as Darwin-Singapore-Darwin in one shift, others 'overnight' crew
on such flights.[17]
Mr Bruce Buchanan, Chief Executive Officer of Jetstar, noted that, following
ongoing incidents of exceeding duty time limits on a Darwin-Singapore-Darwin
service the company had made a decision to overnight the crew in Singapore. Mr
Buchanan observed that this was a case of 'fatigue risk management processes
working well'.[18]
More broadly, Jetstar advised that it had 'processes in place to assess the
rate of duty extensions' and that 'repeated duty extensions are escalated to
the Airline Safety Committee for resolution'.[19]
4.25
However, Mr Buchanan noted that extended duty periods were a relatively
common feature of the aviation industry:
...the aviation business does work shift work and we are
subject to earthquakes, volcanoes, weather and floods, so sometimes shifts do
go longer than is expected and sometimes people do work longer hours. The
average number of hours our cabin crew work a week is 27 hours, putting it in perspective,
and that includes about 21 flying hours.[20]
4.26
Mr McCormick, advised the committee that the CAO 48 prescribed minimum
duty and rest periods and exemptions were 'written a long time ago in a
different world and they never were contemplated as tools for managing fatigue
risk as we understand it today'. In direct terms, Mr McCormick explained that:
...the issue is that the original CAO, when it was written, did
not contemplate things like ultra long haul operations, multiple crews,
multiple sector operations or relatively tight turnaround times. The reg is
just not up to it...Those exemptions were put there to allow Australia’s aviation
industry to continue to operate.[21]
4.27
Mr McCormick noted that commercial imperatives had seen the prescribed
minima approach taken in CAO 48 become outdated:
Up until [the pending ICAO fatigue risk management guidelines
(discussed below)]...we have a system that...is prescriptive, whether it be a
minimum standard of hours on...[or] a minimum standard of time off...But when it
is a minimum it is there for a very good reason and that is the lowest that you
can show acceptable safety and acceptable compliance. So the minimum is not
necessarily dangerous, but in the commercial reality of these operations I
think it is pretty self-evident that all these carriers these days look to go
to the minimum, they look to go to where they get the most commercial advantage...The
basis in reality is that the minimum is the acceptable. Whether it is best
practice is another question.[22]
4.28
Mr Peter Boyd, Executive Manager, Standards Division, CASA, noted that
the 'prescriptive' nature of CAO 48 did 'not fit' a number of situations to
which a number of standard exemptions had therefore been developed. CASA was
'eagerly awaiting' the ICAO fatigue risk management guidelines 'to move into
the modern world on that fatigue issue'.[23]
4.29
Notwithstanding the problems identified with the operation of CAO 48,
Mr McCormick stressed that this was the current industry standard within
which airlines were required to operate until such time as CAO 48 was replaced
by the new ICAO fatigue risk management scheme. Mr McCormick noted that:
...the use of flight time limitations, extensions of duty
periods and reductions in rest periods, rightly or wrongly, is industry
standard.[24]
4.30
Virgin advised that it had in-built restrictions in its rostering
practices to limit the allocation of back-of-the-clock duties, which is where
pilots or crew are required to work an overnight shift. Captain Rick Howell,
General Manager of Flight Operations and Chief Pilot, explained that Virgin
had:
...built restrictions into our rostering system...and we can
absolutely demonstrate where the impact of those restrictions has dropped the
fatigue reporting level significantly. We monitor the fatigue reports and we
also monitor the removal of crew due to fatigue.[25]
4.31
Mr Buchanan advised that there were multiple layers to the fatigue risk
management process, which resulted in rostering practices that were not
accurately described as going 'to the limit of the compliance envelope'. He
explained:
The way the fatigue risk management process works is you have
got a compliance structure you start with and then it is like an onion: you
peel back the layers, and each layer adds a little more conservativeness to the
rostering build.[26]
4.32
Mr Buchanan observed that the factors influencing duty limits included
industrial agreements, rostering practices based on knowledge of safety issues,
fatigue analysis, safety forums and, ultimately, the shared responsibility of
employees to notify their employer if they were unfit for duty. The combination
of such multiple factors meant that Jetstar pilots were 'working on average 18
hours flying a week [against]...a compliance maximum of 25 hours a week'.[27]
4.33
The committee considers that claims by airline operators that flight
duty extensions are 'industry standard' are unacceptable and CASA's attitude to
fatigue management supervision is woefully inadequate. CASA's answer to a
question on notice in relation to more than half the number of Jetstar flights
on a particular route in one month being subject to extensions, is concerning.
Senator Xenophon – Perhaps on notice you can provide
details of: how did Jetstar respond to this and how were you satisfied that
they have complied? I do not know whether Mr Hood can comment on this. How is
it that, if it is the case that there were extensions in 12 out of the 21 –
which I think you have acknowledged seems quite high – and that you will be
looking into that, is that something that CASA ought to monitor on a regular
basis? You get all these undertakings, you give them the tick of approval, but
if there are 12 out of 21 extensions out of more than half the flights in
January alone, does that indicate there ought to be continual monitoring by
CASA of this particular exemption?
Mr McCormick – We will take on notice, Senator, as you
quite rightly said, the issue of the 12 out of the 21. I will go back to what I
did say earlier on. We are auditing Jetstar's AOC SMS in May this year. That
will be a more comprehensive look at the organisation rather than just looking
at an individual piece of it. Perhaps you would care to request that document
when we have finished that, to answer that question more fully rather than
giving you pieces[28]
–
Answer
CASA does not consider that these extensions require
continual monitoring.
The duty extensions recorded in January 2011 by Jetstar were
a result of flight crew agreeing to operate beyond the standard 12 hour initial
limits as provided for within Civil Aviation Order 48 Exemption. No breaches of
the 14 hour condition were recorded.
Jetstar have since advised that the January rate of
extensions was considered at the January meeting of their Flight Standards and
Safety Committee. It was identified that due to a number of factors associated
with ground operations provision at Singapore, the schedule did not live up to
planned expectations. The Flight Standards and Safety Committee again
considered the matter in February, and while some improvement was noted in the
duty extension rate for February, the Chief Pilot resolved to split the pairing
and overnight flight crews in Singapore. This decision is being implemented.[29]
4.34
It is the committee's view that flight duty extensions should not be
considered common practice; rather, they should only be applied in unexpected or
unforeseen circumstances. Furthermore, flight extensions and fatigue management
should be carefully monitored by CASA.
Development of international
fatigue standards
4.35
AIPA advised that committee that in 2010 the ICAO had introduced a
requirement for the introduction of fatigue risk management systems, which
would have to be implemented in Australia, and noted that AIPA was:
...optimistic about the ICAO Fatigue Risk Management Systems
(FRMS) guidance scheduled for release this year. This is particularly so, given
that ICAO is as much an economic as it is a safety regulatory advisor and it
must consider the full range of social and economic development of the
Contracting States to the Chicago Convention. Hopefully, implementation in
Australia will follow closely thereafter.[30]
4.36
CASA advised that it expected that the ICAO fatigue risk management
system guidance, mentioned above, would contain guidance specifically in
relation to cabin crews.[31]
4.37
Noting the existing disparities in the duty limits applying to
Australian cabin crew, Captain Klouth called for CASA to regulate this area of
airline operations, as it does in relation to flight crew:
Another recommendation I would like to make is that cabin
crew duty hours be regulated by CASA regulations in the same way that flight
crew duty hours are regulated. At the moment, some cabin crew are on an EBA and
they have restrictions on the hours they can work; and then I think there are
another two tiers of employment contracts that cabin crew are working to—all on
the same aircraft—and they do not have the same restrictions on duty hours,
which are hours spent in an aeroplane. They can operate for, I think, up to 16
hours, whereas the EBA cabin crew can only operate for up to 12. It seems to me
that those duty hours are regulated only through the EBA process. I think cabin
crew duty hours should be regulated through CASA because, at the end of the
day, even though the passengers' lives are in our hands as flight crew, if for
whatever reason the aircraft is on the ground and needs to be evacuated, their
lives are then in the hands of the cabin crew.[32]
4.38
Virgin advised that it would support a proposal for cabin crew fatigue
risk management to be regulated by CASA.[33]
4.39
AIPA also supported this proposal. Captain Woodward remarked:
...[AIPA] would like to see...regulatory standards being set for
cabin crew, such as basic flight time limitations and things that are viewed by
the regulator as the minimum that you can do, so that we do not have tired
cabin crew operating an aeroplane. Arguably, their role is principally a safety
role to ensure that in an evacuation everyone gets out alive; it is not to
serve tea and biscuits to the passengers, even though that is what they spend
most of their time doing.[34]
4.40
Mr McCormick provided the following advice regarding the implementation
of the ICAO fatigue risk management guidelines:
...[CASA is] awaiting the fatigue risk management guidelines
from ICAO [which are] due to come out [April 2011]. The compliance date for
what is called the SRP, the standard recommended practice, is expected to be
November [2011]...We will implement those ICAO recommendations for flight crew by
that date. We are anticipating the introduction of fatigue risk management for
cabin crew to take slightly longer than that...[because CASA] have never regulated
cabin crew times before, and we think we will have to do a lot of consultation
with the industry and the cabin crew unions and other interested parties before
we produce our first ever document. That is our intent.[35]
4.41
Qantas advised that it had commenced the implementation of the new
standards. Mr John Gissing, Executive Manager of Group Safety, advised:
...[Qantas is]working with the ICAO proposals at the moment. As
recently as October last year, ICAO has tabled the implementation guiding draft
form and across the group we are working on initiatives to improve our fatigue
risk management systems in line with those recommendations that we expect at
the end of this year to be tabled for consideration by member states. So a lot
of work is continuing, and we will be in a very good position to be well ahead
of any requirements that are brought in at that time.[36]
4.42
Senior Jetstar flight attendant Monique Neeteson-Lemkes in her
submission to the inquiry stated:
Flight Attendants are afraid to speak the truth about current
practises within the workplace. They know it'd be seen as going against their
employers. It's known as the culture at Jetstar that should you choose to speak
up about truthful matters, you aren't exactly welcomed with open arms. Flight
Attendants don't have the attractive salary level that comes with being a
Captain so the cost to 'fight back' legally should our employment be terminated
is extremely intimidating.
Whatever type of contract of employment we all share a common
concern, fatigue. It is not only impacting our occupational health and safety
but spilling over into our personal health and safety. The impact fatigue has
to both the Flight Attendant and the safety of the airline's passengers whilst
operating is of great significance and potentially dangerous.
My Flight Attendant peers regularly discuss the symptoms that
manifest as a result of fatigue. These include disorientation, stinging dry
eyes, involuntary nodding off whilst seated on our jump seats, short tempered
dispositions, short term memory loss, ineffective decision making, involuntary
yawning, anxiety and a higher error rate whilst performing duties. We tend to
be much slower in reaction and workplace injuries are at a high rate but not
often reported, as crew are too tired to fill out forms. [37]
4.43
Ms Neeteson-Lemkes also stated in her evidence to the committee:
... a couple of month's back-to-back running of flight
attendants being expected to extend beyond rostered duties on a daily basis.[38]
...
The biggest safety concerns to date, in my opinion, are
fatigue and the training of the new flight attendants and the impact that the
training they have had on the existing flight attendants.[39]
4.44
Captain Klouth also makes reference to occupational stress and fatigue
in his supplementary submission and also in evidence:
With fatigue your decision-making abilities are impaired in
event of an emergency, and as I mentioned it does not have to be an accident.
An example is, say, the QF5 incident at Sydney, where they evacuated the
aircraft at the terminal. If you have cabin crew who are fatigued, their
ability to respond to that emergency is much reduced because they are not able
to think straight.[40]
Issues relating to cabin crew
4.45
The committee received a significant amount of evidence relating to aspects
of safety with regard to cabin crew.
Training and regulation
Training
4.46
A number of submitters and witnesses advised that Jetstar had reduced
training of cabin crew.[41]
4.47
Captain Klouth submitted that training of cabin crew by Jetstar had been
reduced from six weeks to three weeks.[42]
Captain Klouth stated that this was reflected in deficiencies in the knowledge
of cabin crew staff:
The result has been that some new Flight Attendants have
completed their training without having operated on the airline's A321 aircraft.
They have been unable to 'arm' the doors. Arming the doors is necessary to allow
for the automatic deployment of the emergency escape slide if the aircraft has
to be evacuated. Some Captains have stood Flight Attendants down and not
allowed them to operate on an aircraft because they have not been able to
demonstrate that they have the required knowledge to perform their safety
function. This is not the fault of the F/A but rather a symptom of the
reduction in resources and training that Jetstar allocated to F/A training.[43]
4.48
However, Mr Buchanan advised the committee that this change had
legitimately reflected a substantive change in the work of such cabin crew. He
explained:
Our safety component training was reduced from 25 days to 18
days some time ago. Previously we used to train all of our cabin crew to do
both wide bodied and narrow bodied work. So they would be trained for both
aircraft types. When we reduced it to 18 days, we just trained them for the
narrow bodied work, which has been the primary growth vehicle. They are
dedicated to one aircraft type, so we do not need to train them for both.[44]
4.49
Mr Buchanan noted that Jetstar had in fact 'put a significant investment
into customer service training and safety training over the last 12 months,
and...doubled the amount...[of] spending on cabin crew and pilot training'.[45]
Current lack of regulation of cabin
crew
4.50
The committee heard that cabin crew currently do not fall under the
regulatory oversight of CASA. AIPA submitted that 'the lack of legislative
certainty over the qualifications, training and checking of cabin crew is
unacceptable'. The AIPA supplementary submission commented:
AIPA believes that Australian legislation must contain a
formal requirement for the qualifications and training of cabin crew. The
requirements should cover initial and recurrent training as well as a checking
regime...While we note that the proposed new [CASA Part 121] rules may address
some of these issues, we believe that this matter should be referred to the Minister
for Infrastructure and Transport to be included in his current inquiry into cabin
crew numbers.[46]
Use of foreign cabin crew
4.51
The committee heard that there was an increasing use of foreign cabin
crew on domestic legs of flights conducted by Australian carriers. Qantas and
Jetstar, for example, confirmed that crew from different international bases
were used on domestic Australian flights in order to achieve 'efficiencies at
the bases'.[47]
4.52
Captain Klouth advised:
Jetstar is also employing more [flight attendants (F/As)] who
are based in Singapore and Bangkok yet operate domestically in Australia on
international 'tag' flights. These flights are considered to be extensions of
international flights that arrive in Darwin but then continue to other
Australian airports. The flights are available for domestic passengers to fly
on but the cabin crew are often all foreign based F/As.[48]
4.53
Captain Klouth suggested that the use of foreign crews could potentially
impact on safety:
The foreign based crew all speak English but the ability to
be understood in an emergency is an aspect of their training that is not
effectively assessed..[49]
4.54
Captain Klouth noted that foreign cabin crew operating on domestic legs
of international tag flights [and pilots if such a practice were adopted] fly
under the regulations of their home country. While Captain Klouth could not
therefore comment on the specific restrictions, if any, governing pilot or
cabin crew fatigue levels, he observed that such things as rostering practices
applying to Singaporean cabin crew 'are [likely] very different from what we
would normally consider acceptable here in Australia'.[50]
4.55
Qantas and Jetstar acknowledged that crew from different international
bases would be employed under different conditions. However, this was also the
case with Australian crew employed on various domestic awards.[51]
4.56
AIPA also raised safety concerns in relation to the use of foreign
crews, and expressed the view that 'international crewing models do not confer
any public benefit on Australian travellers'. The association believed that the
use of foreign crews:
...lead to a number of increased risks, particularly regarding
safety standards for cabin crew. The risk will increase if there are
inconsistencies in English language skills and training standards, simply due
to the likelihood of confusion and loss of team coordination in an emergency.
We believe that the problem is exacerbated by the lack of Australian standards
for cabin crew.[52]
4.57
AIPA commented that foreign crews would not enjoy 'many of the
Australian employment and general workplace protections that we consider
appropriate for Australian employees and...workplaces'.[53]
Further, AIPA identified a number of potential public revenue implications
raised by foreign crewing models:
AIPA believes that one of the primary consequences of the
crewing models pioneered by Qantas through Jetconnect and Jetstar Airways in
New Zealand is the avoidance of Australian taxation and the mandatory
superannuation requirements.
There may also be consequences for any HECS or FEE HELP
debts. It has been suggested that employing Australian citizens on foreign
contracts may serve to avoid the repayment of HECS or FEE-HELP debts because
these are tied to Australian tax returns. Presumably, pilots employed on
foreign contracts will not pay tax in Australia.[54]
4.58
Mr Buchanan stressed to the committee that the use of foreign crews was
driven by business demands. He advised:
The company strategy is driven by where the growth occurs. So
when the growth occurs inside Australia, we employ people inside Australia;
when the growth occurs from Ho Chi Minh to Guangzhou, we will be employing
people in Vietnam and China. It is really about the market dynamics.[55]
Issues relating to flight crew
Use of foreign pilots
4.59
Captain Klouth advised that, in relation to Jetstar, 'all pilots who fly
for Jetstar in Australia [currently] have to meet the Australian licensing
requirements'.
4.60
However, there was a suggestion that the company was considering moving
flight crews between the various entities of the Jetstar group, including its
operations in Vietnam and Singapore. Captain Klouth noted that there were
potential cultural factors to be considered in relation to this proposal, to
ensure that foreign crews met the historically high standards of Australian
flight crews.[56]
4.61
AIPA was also concerned at the potential for the use of foreign crews in
Australia:
AIPA is also concerned that proposals to source pilots to fly
Australian aircraft from overseas may further increase the risk of an aviation
accident because there are many countries that are not as well regulated or as
culturally aligned in terms of corporate governance as Australia.[57]
4.62
AIPA pointed to recent problems in India relating to the integrity of
pilot licensing, and submitted that:
...CASA may need to introduce more stringent scrutiny for
foreign applicants for Certificates of Validation for existing pilot licences
as well as applications for Australian licences based on foreign
qualifications.[58]
4.63
Responding to concerns about Jetstar's use of New Zealand based cadet
pilots, Mr Buchanan advised that this employment strategy was guided by the
training needs of those pilots:
We do move around some cadets based on training needs into
different jurisdictions. Cadets in New Zealand, cadets in Singapore and cadets
in Australia are employed largely to fill the flying in those markets. They are
not there to undercut and effectively move across into Australian flying, but
there is some flying done around the network to make sure we get exposure to
the best of our training captains and the best of our check and training
captains, and make sure we are giving those young cadets exposure to the best
and brightest of our pilots.[59]
4.64
Mr Terry O'Connell, Executive Director, AFAP, indicated that there was
likely a significant disparity between the wages of Australian and Singapore
pilots:
Our rough reckoning is that the Jetstar New Zealand and
probably Singapore are between 30 per cent to 40 per cent lower than the
equivalent Australian Jetstar pilot. It is significant and it is a major
industrial concern.[60]
Cost pressures impacting on the Australian aviation industry
4.65
A number of submitters and witnesses responded to the inquiry's terms of
reference within the broader context of commercial pressures impacting on the
Australian aviation industry. Many of the in camera submissions provided by operating
pilots addressed these broader commercial trends and, while this evidence was
largely comprised of personal or anecdotal accounts, these submissions were
largely reflected in the collective view as represented in the submissions of
pilot unions.
Pressure to reduce costs and
impacts on safety
4.66
A consistent theme of the submissions and evidence provided by AIPA was
that competitive pressures in the Australian market, due to increased
international competition and the advent of low cost carriers into the
Australian market, was leading to significant pressure to reduce costs that is
impacting on the safety related areas of airline operations.
4.67
AIPA noted that 'intensive' competition in international markets were
impacting on the flight safety margins and practices of the Australian airline
industry:
While we are most certainly not anti-competitive, it remains
true that there have been insidious declines in operating standards as a
consequence of intensive (if not excessive) competition in the US and European
aviation markets.[61]
4.68
AIPA submitted that it believed there is:
...ample evidence that cost reduction strategies within the industry
have led to the sacrifice of quality for lowest cost compliance. This can be seen
in such examples as the reduction in the ratio of licensed to unlicensed maintenance
personnel and the shifting of training costs from operator to employee.[62]
4.69
Similarly, Captain Klouth, for example, explained that he saw the issues
identified by the inquiry's terms of reference as part of an overall financial
imperative to reduce costs
I was motivated to write to the committee through concern that the safety margins that
were a normal part of the aviation industry, and which contributed to
Australia’s safety record, have been and are being eroded [due to cost
pressures] to the point that airline safety can no longer be considered as a
given. This erosion of margins has occurred in the areas of flight crew and
cabin crew training; rostering practices that contribute to increased fatigue;
experience levels of flight and cabin crew; and, reduction in resources
allocated to operational areas.[63]
4.70
Captain Klouth observed that many areas of airline operations were
effectively fixed costs, and that safety functions were therefore an area
targeted for cost reductions:
...in an airline the fuel cost is fixed and the maintenance
costs are fixed. There is only one way you can go with reducing the costs and
that is with people...[For example, at Jetstar] the safety department still has a
similar number of investigators for an airline that is much bigger than when I
was in the safety department.[64]
4.71
Similarly, AIPA submitted:
AIPA is concerned that Safety Departments, like Training
Departments, are often viewed as cost centres rather than quality assurers and
come under commercial pressures to generate the appearance of activity rather
than generate genuine quality improvements in airline processes. Investigation
of aircraft incidents and monitoring of fatigue inducing rostering practices
are examples where inadequate resourcing of Safety Departments and
inappropriate management expectations can give the lie to the safety first
mantra.[65]
4.72
AIPA was concerned that continued cost reductions in response to
competitive pressures would ultimately translate to adverse safety outcomes:
AIPA believes that it is abundantly clear that operators will
seek to cut costs until prevented by legislation or the public response to a
serious incident or accident. Unregulated market forces will inevitably end up
with operators taking calculated risks that technology can offset quality
training and that a hull loss may not cause the demise of the business.[66]
4.73
A number of submitters and witnesses argued that the cost pressures on
the Australian industry were exemplified by the availability of increasingly
cheap fares in the Australian market. Captain Klouth remarked:
[How] do you get the fares so low? You have to reduce your
costs in some areas.[67]
4.74
AIPA also discussed this issue:
The advent of very low air fares has increased the
demographic pool of potential air travellers and created a significant demand
for increased capacity that appears set to continue. However, the expectation
of the public is generally that the cheap fares come without any reduction in
safety. That expectation may not be matched by the industry performance if we
do not address the issues raised [by AIPA in its submissions to the inquiry].[68]
4.75
Given the risk that competitive pressures would lead to an
underinvestment in operational and training systems, AIPA remarked that:
It may be necessary for additional agencies such as the Australian
Competition and Consumer Commission (ACCC) or the Productivity Commission (PC)
to become involved in looking at the financial and economic viability of fare
levels to provide greater assurance of financial viability.[69]
4.76
AIPA concluded that current trends in Australia and, indeed, worldwide,
in the aviation industry present a number of latent threats to safety that must
be addressed to ensure that Australia maintains its enviable aviation safety
record:
Historically, the airline industry has been good at being
reactive to threats and has slowly matured into an ultra-safe industry. But
progress has slowed and may even have reached a nadir. To move forward, we now
need to identify and mitigate latent threats and be more proactive. Low crew
experience, inadequate training, cultural differences and poor job satisfaction
are all latent threats, yet little response is apparent.[70]
4.77
However, in response to concerns over the competitive pressures in the
Australian market, Mr Alan Joyce, Qantas Chief Executive Officer, advised that
discounted fares were a sustainable feature of the airline industry:
...there will always be opportunities for airlines to fill up
aircraft seats at lower airfares. We have a large number of seats that go empty
in the airline every year. We know that having aggressive pricing out there
stimulates demand; it gets people to travel when they would have normally not
wanted to. It fills up seats, and the economics for us are a lot better. So you
will always have the need to have very discounted airfares.[71]
4.78
Further, Mr Joyce strongly rejected the suggestion that cheaper fares
and LCC models inevitable involved a compromise on safety. He stated:
We have noted expressions of concerns about the long-term
viability of aviation, given the rise of budget airlines and customer
expectation of ever-reducing fares. I have had the experience of establishing
Jetstar...so I am familiar with the budget airline model. The first thing to say
is that low fares do not inevitably mean lower safety standards. The budget
airline model is viable because of reduced service offering, with major savings
on everything from catering to lounges to in-flight entertainment. Operating a
new fleet and having fewer fleet types significantly cuts maintenance costs,
and operating out of secondary airports and a focus on airport costs improves
the overall economics. Let me make this clear: at Jetstar there is no
compromise on safety. The budget airline model does not require it, and we would
never accept it.[72]
4.79
Mr Joyce also identified changes in aviation industry technology as a
basis for airlines to continue to pursue efficiencies and reduce costs. Mr
Joyce noted:
...new aircraft technology is changing the industry all the
time, and costs and efficiencies can be generated by having new ways of doing
things...[Qantas] have utilised technology and efficiency to provide economic air
transportation to people over a long period of time. That will continue,
because we are seeing major changes to technology coming from the manufacturers.
We are seeing the use of technology in airport check-in and other areas, and
they can continually help us be more efficient.[73]
4.80
In relation to Jetstar, Mr Buchanan commented:
If you look at the history of Jetstar, a lot of that cost
saving has come through technology. We started with the 717s, which were
smaller aircraft. We then moved to the A320; we have now introduced the A321.
We have also introduced the A330 and now we are investing in 787s as part of
the group fleet order. All of those things are delivering significant cost
savings which then flow through to the bottom line.[74]
4.81
Mr Buchanan specifically rejected suggestions that pilot training had
been reduced in pursuit of cost savings:
A fallacious view you hear is that that is coming about through
cuts in pilot costs or pilot training. The opposite is true. Our costs in the
pilot area alone have been up 7½ per cent every year since we started. Our
costs in training, just in the last 12 months, have doubled. They are not areas
that we are cutting back on at all. They are small areas in the overall cost
base. Our primary focus, like all low-cost carriers, is to get creative in how
we can unbundle the product and give people more choice. That includes things
like taking out meals, taking out some of the other product attributes and then
giving them back as choice to customers.[75]
4.82
Mr John Borghetti, Virgin Chief Executive Officer, also defended the
sustainability of cheaper fares and airlines' responses to competitive
pressures. He commented:
I think sometimes people get misled by a $50 airfare between
Melbourne and Sydney or wherever it might be. The truth is that not many seats
are sold at that price, and the truth also is that technology continually
improves and it improves your cost structure if used correctly. So I think all
that leads to competition, but it does not necessarily lead to the assumption
that safe practices are compromised.[76]
Committee view
4.83
An issue of significant interest to many stakeholders in the inquiry was
the extent to which fatigue affecting flight and cabin crew may be adversely
impacting on the safety of Australian airline operations.
4.84
The committee notes evidence suggesting that changes to flight
operations arising from the internationalisation of the aviation industry, as
well as the entry of low cost carriers into the Australian market, have
resulted in generally increased levels of fatigue in relation to specific 'long-haul'
flights and certain rostering practices.
4.85
The committee notes also that the discipline of fatigue prediction and
management is a relatively uncertain exercise, particularly when applied to the
physical make-up and broader environmental influences that can affect how a
given individual may respond to extended periods of duty. Given this
uncertainty, the committee could not confidently assess the extent to which
increased fatigue levels may be adversely impacting on safety within the
Australian airline industry.
4.86
However, the committee notes that the anticipated ICAO fatigue guidelines,
which will require, and presumably establish criteria for, Australian airlines
to institute fatigue risk management systems, should establish a credible
benchmark for the duty limits which currently apply to Australian flight crew,
and should also inform CASA's assessment of the extent to which current
exemptions appropriately allow for duty limits to be exceeded.
4.87
Based on the evidence received, the committee is of the view that
Australian cabin crew should be subject to regulation by CASA, and the
committee understands that the ICAO fatigue guidelines will, by including
reference to cabin crew duty limits, bring this issue into the regulator's
purview. The committee agreed that, following the release of the ICAO fatigue
guidelines, CASA should expedite necessary changes and/or additions to the
regulations as a priority.
4.88
In the event that the ICAO guidelines did not extend to cabin crew duty
limits and fatigue management more broadly, the committee agreed that the
Government should amend the Civil Aviation Act 1998 to include cabin
crew under CASA's regulatory oversight.
Recommendation 20
4.89
The committee recommends that, following the release of the
International Civil Aviation Organization (ICAO) fatigue guidelines, the
Civil Aviation Safety Authority (CASA) should expedite necessary changes
and/or additions to the regulations governing flight and cabin crew fatigue
risk management as a priority
Recommendation 21
4.90
The committee recommends that, in the event that the International Civil
Aviation Organization (ICAO) fatigue guidelines do not extend to cabin crew
duty limits and fatigue risk management more broadly, the Government should
amend the Civil Aviation Act 1998 to include cabin crew fatigue risk management
under the Civil Aviation Safety Authority's (CASA) regulatory oversight.
4.91
In relation to the broader issues raised in evidence to the inquiry
regarding the broader competitive pressures in the Australian airline industry,
the committee notes that many of the issues considered in the preceding
chapters of this report discussed the specific concerns relating to cost
reduction as applied to pilot training and safety related functions.
Recommendation 22
4.92
The committee recommends that the Civil Aviation Safety Authority (CASA)
specify the type of training and amount of training required for cabin crew,
including mandatory English language standards.
Senator the Hon. Bill Heffernan
Chair
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