Webdiary - Founded and Inspired by Margo Kingston

I have been an airline passenger for more years than I care to admit, in planes from Twin Otters to 747s. So many memories: my first trip in a 727 – the steep angle of ascent, the acceleration pressing the passengers back into their seats. My first overseas trip, as an unaccompanied 17 year old, when the plane circled the airport at Kuala Lumpur for ages because of fog, eventually returning to Singapore for the night. Another international flight, from Los Angeles direct to Melbourne, where we encountered very strong headwinds, and some anxiety as to whether we had enough fuel to make it. My astonishment, on my first domestic flight in the US, at finding that should we land on water, we were to pick up our seat cushions to use as flotation devices. Bumpy descents into, and departures from, Canberra. Weaving through the thunderheads of the build-up to the wet when flying from Gove to Darwin. Then there was the flight out of Christmas Island (Indian Ocean), where the pilot decided to make a circuit of the island, banked too steeply, slipped, and only managed to get the power on and climb at the last moment. (My husband, an engineer, who knows far too much about aeronautics for my peace of mind, says that one second more and we would have been in the drink – and there were no rescue services…)

Even though I’ve flown a fair bit, I’m not all that fond of it – something to do, I suspect, with the knowledge that if anything were to go wrong there’s nothing at all that I could do about it. Naturally I take what steps I can, and have always been very careful about airline selection. I’ve even been known to change flights if I have real concerns about the weather. Most of my within-Australia flying has been with Qantas (including TAA and Australian Airlines under that umbrella), and for most of my life I have taken some consolation in that airline’s excellent safety record. Things, however, just aint what they used to be. For analysis of problems in the aviation industry it’s hard to go past the work of veteran journalist Ben Sandilands, whose coverage of deficiencies in Australia’s air traffic control services and air safety should be mandatory reading.

At the beginning of June the federal government announced a Senate inquiry into the Civil Aviation Safety Authority. The reporting date is 9 July, less than a week away. Earlier today I heard this on ABC Radio:

Former CASA lawyer says regulator failing

The former senior lawyer for the Civil Aviation Safety Authority (CASA) has given a damning submission to the Senate inquiry into the organisation.

Stephen Ilyk was senior counsel to CASA for 11 years.

He says it is failing as a regulator because it is too close to the airline industry.

"A relationship where industry criticism was anathema and had to be prevented at all costs, even if it meant subordinating CASA's regulatory responsibility to placate industry," he said.

He also says CASA should not have commercial insurance because he says this prevents openness at coronial inquiries.

"The insurer has an interest to making sure that CASA has no blame because if it does there'll be litigation," he said.

"Litigation will mean that the insurers will have to pay out."

He says people such as himself who believe in regulation have been forced out of CASA .

So I went hunting, and found that a Mr Peter Ilyk (note the different given name) has made a 76 page written submission to the Senate Committee. I assume that it is the same person who was reported on the ABC, given that in his submission he states:

I make this submission as a private citizen who is concerned about the way the regulatory authority has dismissed the hard earned lessons of the past in an effort to befriend the industry it was set up to regulate.

The views expressed in this submission are my personal views.

However, my views are based on my previous extensive experience in the regulatory authority in a number of senior positions:

• Assistant General Manager, Legislation Development Branch, Civil Aviation Authority – (1989 – 1995);

• CASA General Counsel – (1995 – 2006).

In these positions I was responsible for advising the various Boards, Chairmen and Directors on a variety of issues relating to regulatory development, compliance and enforcement, corporate governance, legal duties and responsibilities and regulatory policy.

Ilyk argues that CASA has succumbed to “regulatory capture”:

“… a term used to refer to situations in which a government regulatory agency created to act in the public interest instead acts in favor of the commercial or special interests that dominate in the industry or sector it is charged with regulating.” (G. McMahon, Regulatory Capture: Causes and Effects)

Ilyk’s position with respect to regulation is clear. I’ve extracted the salient part of his submission below. As a fairly frequent flyer, I endorse all that he has written on this point. I must also say – with some reluctance – that if any airline executive is prepared to compromise passenger safety for the benefit of the corporate bottom line, I hope that that executive is on board the hull that doesn’t make it.

REGULATORY PHILOSOPHY (pages 26-28 of Peter Ilyk's Submission)

The role of governments in the regulation of all manner of safety standards has generally been accepted for many years. The purpose of any government regulation (and aviation regulation is no exception) is to guard against actions which are potentially detrimental to society. Enforcement of the regulations becomes necessary when regulations are not being adhered to and society suffers as a result.

In a perfect world, merely setting of standards by the regulator would suffice and all participants in the system would, out of self-interest, take all safety measures that have higher benefits than costs. In such a case, there would be no need for regulation of the civil aviation system and enforcement of safety requirements.

There are, therefore, some who argue that those who conduct commercial air operations should be self-regulating and that the responsibility for deciding and enforcing safety standards should be left to the individual operators or to the operators collectively. The theory behind this point of view is that in the end competitive forces will prevail and the unsafe carrier will lose its customers and give way to the safe operator.

Market forces not sufficient

However, it is unlikely that market forces alone could be expected to elicit from all airlines at all times a sufficiently high and consistent degree of attention to air safety standards. It is true that in the long run a good accident record would serve an airline well commercially, but it would be unthinkable to most people that government should abandon the principle of prevention based on regulation and certification and wait for an airline to disqualify itself through its accident record from the confidence of its customers.

There are also those who argue that privately owned aircraft should be free of regulations on the basis that private owners are in a better position than the regulator to determine the continued airworthiness of their aircraft and their ability to navigate safely. However, it is apparent from the accident statistics that privately owned aircraft should continue to be subject to regulation. Such regulation is intended to protect not only the owner and his passengers from harm but also to protect others using the airways. Regulation is also intended to protect the public in the event of a privately owned aircraft failing to observe the safety standards.

Need for regulation

In our imperfect world, therefore, there are many considerations that justify regulation.

First is the view of the travelling public who want to feel they are safe in the air. It is probably not sufficiently reassuring to these people to say that airlines will always take every precaution because it is the airlines which will suffer most if they are found to be responsible for an accident. Even with the steadying influence of insurance underwriters, history has shown this approach not to be entirely reliable with operators being found to be least partly responsible for accidents and suffering commercially as a result.

Following an accident, the travelling public and in particular those affected directly, invariably scrutinize the role played by the safety regulatory authority. With perfect hindsight they see the regulator as being there for the public good and therefore able to offer a measure of protection. Such scrutiny shows that the public want (and demand) an effective regulator which is empowered to take appropriate and timely action when safety is threatened.

Secondly, the industry itself demands a watch-dog. All operators want to operate on a level playing field where all participants are required to abide by the same safety rules. A dim view is invariably taken when a less responsible competitor seeks to operate without going through the entry procedure other had to or relaxes their safety standards in order to reduce costs and prices. Clearly it is important that care is taken in dealing with complaints from operators where the motives may not be based on safety but on minimizing new competition.

Thirdly, an accident involving the loss of a wide-bodied jet aircraft is a catastrophe which justifies taking significant steps to avoid. If the existence of the regulator prevented just one such accident every 50 years, it would probably be enough to justify the regulator’s existence in economic terms alone. There is no scientific way of knowing the effect of a watch-dog authority in helping avoid such a catastrophe, but how could anyone take the chance of doing away with the watch-dog or disempowering it in such a way that it could not act in appropriate cases?

Reason for Enforcement

For whose benefit does CASA undertake its regulatory activity?

One of the best answers to these questions appeared in the Aviation Safety Digest, issued by the Department of Civil Aviation in March 1964 – some 44 years ago. It is as relevant today as it was then:

“It is fundamental to the administration of any statutory discretion, such as this [referring to the power to suspend, vary or cancel licences] that the person upon whom power is conferred shall act first and foremost ‘in the public interest’. It follows, therefore, that where there is reason to suspect that a licence holder may menace the welfare of any member of the community, while exercising the privileges of his licence, the Director-General must take steps to limit the activities of the licence, until there is no continuing ground for the suspension.

Responsibility ‘in the public interest’ is a sometimes overworked and often derided phrase, but if the Department or the industry ever overlook its responsibility to the people who comprise the community which it serves, then justifiable criticism….will surely follow”.