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The New Zealand Air Line Pilots' Association Newsletter.

Conference hears global perspective on liberalisation of airspace

As he discussed The Liberalisation of Airspace – Challenges and Opportunities with fellow panel members, NZALPA’s President Tim Robinson discovered that there are many areas of “common ground” from which organisations can collaboratively work together and communicate.

Robinson was joined by Executive Director of Australian Federation of Air Pilots (AFAP) Simon Lutton, Airways Head of Strategy Trent Fulcher, Aviation New Zealand Chief Executive John Nicholson and International Federation of Air Traffic Controllers (IFATCA) President and Chief Executive Patrik Peters. 

The panel discussion took place on day one (June 20) of the NZALPA Annual Conference and was moderated by national leadership and employment relations specialist, Karl Perry.

To kick off, the term ‘liberalisation’ was interpreted differently among the group.

Fulcher said that Airways had been in the liberalisation space for a long time. For air traffic control, he saw it as the development and emergence of competition in specific services and the disruption by technology.

Speaking on behalf of the Aviation Industry Association, Nicholson believes liberalisation offers the sector much more opportunity and choice, as well as the need to ensure those opportunities have positive long-term effects on all aviation stakeholders.

“The challenge is establishing umbrella thinking and getting players thinking together and getting on the same page,” Nicholson said.

He said that if New Zealand got this right, the opportunities domestically and internationally would be significant.

From an international viewpoint, Peters said the term liberalisation was similar to that of competition and there was a need to harmonise the regulation around meeting the need for increasing global capacity.

In Australia, Lutton’s experience is that liberalisation is increasing due to a relaxed regulatory approach and generous granting rights by the Federal International Air Services Commission, which runs the rights for foreign airlines coming into Australia. He felt that New Zealand and Australia were both in unique positions to undertake a shared regulatory approach.

Talk quickly turned to the impact of Open Skies agreements and the impact of the liberalisation of airspace on passenger and crew safety. There were concerns of airlines “corner cutting” when it came to training obligations, and also the emergence of ‘atypical’ employment models.

Lutton noted that, already temporary work visas for international pilots coming into Australia were being abused by employers “hand cuffing” pilots to them.

There were enough willing and able pilots in Australia, but employers were avoiding employing them due to the domestic training obligations, he said.

Atypical employment models have also begun to appear in the local industry with airlines like Australian-owned Jetstar employing crews who live outside of Australia.

“The foreign ownership laws are broad,” Lutton said.

Consequently, AFAP is lobbying the Federal Government to realise companies and carriers might be avoiding tax obligations. In addition to this, the domestic impact on others employed to some degree by the company is likely, for example some employees might no longer benefit from superannuation policy.

Threats to labour standards were a clear concern for Robinson, who encouraged delegates to resist traditional thinking and that New Zealand is the “end of the line” and “out of reach” from any real effects from globalisation. 

His major concern was that while NZALPA supports growth and competition, the imposition of the Gulf and Middle East airlines means there is no longer a level playing field. Dominant airlines have developed the ability to push out New Zealand competition and put a squeeze on the current terms and conditions of New Zealand pilots and air traffic controllers.

“Ironically, for the travelling public, it may result in a fare increase when the dominant Gulf airlines have a monopoly on New Zealand airspace,” Robinson said.

He looked to Peters when he discussed European aviation trends for atypical employment and flags of convenience models. Some key points included how companies can have their capital and pay tax in one country, abide to the regulation and oversight of another, provide labour and follow employment conditions of a third country, all while flying to other destinations.

These flags of convenience might be inevitable, said Peters, but the key is training and keeping the standard of the profession”.

According to Peters, Europe was rocked by the 2008 global recession and subsequently training providers cut costs. Even though the aviation, particularly ATC, industry actually met with the demand for greater capacity, this was without further investment in training. 

Peters says that IFATCA has around 50,000 air traffic controller members, all of whom should be held and supported to the same professional standards and key performance factors.

 “If we see growth but not the training, we will see accidents,” he said.

Looking at it from this safety perspective is a lot more logical and defensible argument, Lutton added.

“Our one and only way forward is through collaboration,” Peters said.

Liberalisation for air traffic control

The panel agreed that collaboration will be key for both pilots and air traffic control services as liberalisation continues to create marked increases in global traffic. 

Fulcher noted that the centre of aviation is shifting towards the Asia-Pacific region, with one in three flights originating out of Asia. He warned that it would be unrealistic to expect all stakeholders to collaborate and instead the emphasis should be on meaningful partnerships. To this, Fulcher conveyed that Airways was already discovering like-minded organisations to partner with internationally.

In addition, Fulcher said that the unmanned aerial vehicle (UAV) developers out of Silicon Valley were looking to test their innovation in New Zealand airspace. This technology looks to provide air traffic service from 500 metres above the ground. 

He added that regions yet to go through liberalisation were struggling to match the increase in capacity and training. 

The importance of common interests

Robinson believes that identifying common interests is the best way to deal with liberalisation, and this includes finding the shared interests with both the Government and the public.

“We started by asking Air New Zealand where we have common ground,” Robinson said.

Fulcher replied that Airways has not sought enough early collaboration with NZALPA, explaining that there was the “need to get the views and opinions of members of the union”. He admits the organisation had not been good at this in the past.

According to Peters, this collaboration would be needed as a result of the International Civil Aviation Organisation (ICAO) forecast that 40,000 ATCs will be required and that there is a current misconception that technology and automation in particular,  will remove the need for ‘man power’.

No technology has been able to keep up with the rate of growth so far, Peters said, and automation will continue to assist but not take over as it still needs the human as an interactor.

His concern with this rate of growth is that the safety and training is no longer considered ‘a given’ and that if we move too fast we will have lapses in safety – to which it will be  difficult to catch up from there.

“We must invest in safety,” Peters concluded. 

Atypical employment models and their impact on training and safety

Executive Director of Australian Federation of Air Pilots (AFAP) Simon Lutton and NZALPA’s President Tim Robinson.

Robinson suggested that atypical employment models are having a negative impact on safety and overseas airlines. He used the example of Ryanair to highlight how airlines are risking safety because they don’t have the same employer-employee relationships that traditionally existed.

These atypical employment models appear to put commercial demands on training and reporting, Lutton added, with many pilots feeling as though they can’t freely report their concerns without ramifications on their “employment”.

He sees a huge opportunity for increased training facilities and capacity to open in Australia and New Zealand – a chance for the region to be seen as the best place for high-quality training.

Nicholson agrees. At the moment he described the training industry as competing on lowest cost rather than emphasising value, and that is having a profound effect on the technology they can afford, with many centres still using analogue cockpits as opposed to the digital preference. He questions what will happen to the New Zealand industry if this doesn’t adopt artificial intelligence and virtual reality training which is more available offshore. 

Aviation New Zealand proposes that not only should training institutions be shifting their focus to bigger contracts, such as international airline training and cadetships, but also connecting with employers, especially those with low-hour pilots, as well as aspiring pilots in order to have a more collaborative relationship.

Aviation businesses play a vital role too, as with clearer career pathways, both in becoming a pilot and air traffic controller (ATC). This clarity in career progression would attract more people to train for these roles. Robinson argued that there is also the need to tackle the issue of limited funding from the government through inadequate levels of student loans.   

“How can we fund pilot training better as both an industry and a country?” Robinson asked. 

NZALPA has presented its concerns on training costs and pathways to “getting their hours up” both to government officials and the public via media engagement.

Action is needed now before New Zealand pilots are enticed overseas by the likes of the recently visiting Emirates roadshows, Robinson added.

AFAP is seeing similar migration of Australian pilots overseas as they fail to see how their career will progress in local industry. 

“There’s no real structure for them,” Lutton said. 

The panel agreed that young pilots need to see a career path to encourage them to stay.

Fulcher recognised similar issues for ATCs and said that while Airways is having discussions at the executive level around technology, considerations need to be made about “taking people on the journey and allowing career progression”.

Technology will change the role of an ATC, and he acknowledges employers need to be supportive. 

Remote and virtual towers

Both Fulcher and Peters were asked about the use of remote towers and the likelihood of their introduction into New Zealand. Peters has seen remote tower operations being used in isolated areas quite successfully, and while the technology has more potential than ever, the IFATCA’s position was that they should not exist for multiple use.

The main concern for IFATCA was around the massive amount of data needed to operate a remote tower, and therefore the protection and security of that data.

“The implications of the protection of that data are immense,” he said.

Alternatively, Fulcher commented on what he saw were the security benefits of virtual towers as protection against terrorist attacks and said they were already being used in London City Airport and Singapore’s Changi Airport. He said they would wait to see how virtual towers evolve and what level of investment would be needed as the cost of technology comes down.

All about safety

What’s clear among the panel, and succinctly put by Peters, is that industry stakeholders have one common interest – a safer airspace – as both ATCs and pilots learn from each other and look for opportunities to combine forces in the future to propagate and improve the profession as a whole.

“We have quite a lot of common ground on the challenges and opportunities, but we need to collaborate and communicate far more,” Robinson concluded.

From left: Airways New Zealand’s Trent Fulcher, Aviation New Zealand’s John Nicolson, IFATCA’s Patrik Peters, AFAP’s Simon Lutton and NZALPA’s Tim Robinson.

PANEL DISCUSSION – KEY POINTS

  • Liberalisation is about increased competition, capacity and choice and that is particularly good for consumers. It does, however, expose legacy providers to the risks of disruptive technologies impacting on parts of the industry value chain.
  • New Zealand is becoming a part of the global marketplace, and it is no longer protected by its geography.
  • Liberalisation, increased competition and capacity has the potential to provide increased economic opportunities, however there is a real risk that competition will negatively impact the labour market. There is potential for a reduction in employment terms and conditions, and an increase in atypical employment models.
  • Airlines are now able to structure their companies in such a way that certain portions of the company fall under different state jurisdictions. They may have their finance and capital assets in one state for tax purposes, regulatory oversight in a different state, and obtain labour from a further state.
  • The technology is available to provide air traffic control services from remote locations, which have a cheaper cost base. There are those in the industry who believe that this would be best for air traffic control.
  • Training is the key to overcoming the threats of liberalisation and increases in capacity. Growth without adequate training is a real safety risk for the industry – safety is no longer a ‘given’.
  • Pilot training currently competes on lowest-cost. For many mainstream education providers reputation is very important and most people do not want what the industry would consider a ‘cheap’ option. NZALPA believes the industry should consider changing from a low-cost to a high-quality model. New Zealand and Australia have an advantage over their Asian neighbours in terms of training facilities and experience for pilots.
  • Technological change is an issue for legacy Air Navigation Service Providers (ANSPs). For example, there are non-ANSP companies looking at entering the market for control of UAVs at low levels. Collaboration between ANSPs might reduce some of the potential risk.
  • The traditional pathway to becoming an airline pilot has been disrupted by the introduction of cadet schemes. Poorly structured cadet schemes can reduce the quality of training. Whilst there is a place for these schemes, it should not be the only way into the industry.
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