On Tuesday, the Association lodged a detailed submission on the CAA Pricing Review that has been out for consultation over the past few weeks.
Key points
1. The AIANZ does not support any of the options proposed. It believes all of them, in one way or another, are either flawed or inequitable.
2. The proposed fee increases, averaging 43%, are not proportionate to inflation or wage growth as recorded by Statistics New Zealand. Over the period considered, Consumer Price Index (CPI) and Labour Cost Index (LCI) increases have been significantly lower, with forward projections by the Reserve Bank showing inflation stabilising around 2% to 2.5%. The magnitude of the proposed increases is neither reasonable nor aligned with the real economic environment. Such an approach could lead to reduced economic activity and even result in lower revenues for CAA, as operators may cut back on services, defer investments, or worse, cease operations.
3. The aviation industry, particularly sectors like agricultural aviation and flight training, have yet to recover fully from the economic impacts of COVID-19. The agricultural sector has experienced a 52% decline in activity since 2021. Flight training organisations are constrained by government-imposed limits on tuition fees, making it impossible to pass on rising regulatory costs to students. For these sectors, the proposed levy increases would be crippling.
4. In recent years, the CAA has had opportunities to improve its performance as an aviation regulator, but key performance measures have not been consistently met. Instead of enabling and supporting the industry in New Zealand, it has frequently been perceived as a ‘disabler’ due to persistent operational delays in many areas of the organisation. For a levy increase to be justified it must be matched with a minimum of level of service and performance which has not been the case.
5. The proposed increases in CAA fees add to a growing burden of compliance across a range of Government agencies that intersect with the aviation industry, including for example, ACC levies and employee related immigration fees to name just a few. These will pose further threats to the sustainability of aviation operators. For example, amongst our membership, the agricultural aviators are enduring a difficult trading period not experienced for some decades, flight training organisations have not seen student numbers recover to anywhere near 2019 levels and tourism has not got back to where it was pre-pandemic.
6. The consultation document is written in an introspective manner by saying what CAA wants, not what industry needs from an aviation regulator. It is irreverent to the impacts on commercial aviation operators. It uses no real examples of the impact of the various provisions on individual operators, while the consultation document is silent on addressing burgeoning CAA expenses and salaries.
This submission represents a crucial step in advocating for the interests of our members and the broader aviation community in New Zealand. Members can access the submission here.
Become an AIANZ member hereAs an association, we strive to ensure that the voice of the aviation community is heard and considered in important regulatory decisions. To have your views heard and be part of shaping the future of the aviation industry in New Zealand, become a member with us today.
AIANZ members gain access to detailed information, support with submissions, and the opportunity to contribute to a united front in addressing industry challenges through our policy and advocacy work.
The upcoming submissions we are working on are:
Aviation security review – due 22 October
Proposed application fees for the independent review function – due 28 October
Draft Civil Aviation Rules – due 29 October
Health and Safety at Work Act – due 31 October
We welcome your input in these matters, so please contact us here.
Simon Wallace
Chief Executive, AIANZ