Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Hansard source

The Aviation Legislation Amendment (International Airline Licences and Carriers’ Liability Insurance) Bill 2008 implements elements of the previous coalition government’s 2005 aviation discussion paper. It will address some regulatory issues associated with oversight of the system of international airline licences and mandatory airline insurance. The international airline licence system, established under the Air Navigation Act 1920 and its accompanying regulations, ensures that scheduled international air services occur in accordance with bilateral air services agreements struck between Australia and our international aviation partners.

There are, however, inefficiencies associated with the administrative framework of international airline licences. One such problem is that, once issued, international airline licences remain in force indefinitely and the conditions associated with that issuance are difficult to vary. This has led to licences remaining in force even though the airlines they were issued to have ceased to exist or to operate services to Australia. Licences also may not reflect new requirements, creating discrepancies based on the time of issuance. Interestingly, this system of perpetual licensing was introduced in 1994 by the Keating Labor government, and the previous coalition government recognised the need for it to be modernised.

This bill will end perpetual licensing. It will implement a scheme where existing international airline licences will be cancelled and reissued with standardised and updated conditions. The bill will enable the making of regulations to achieve this objective. Airlines will have to demonstrate their compliance with safety, security and insurance regulations to be reissued with a licence. This change will ensure that international airline licences remain consistent with the latest aviation practice and relevant international agreements. Regulations are disallowable instruments, and the coalition will ensure that any regulations made are appropriate—that they protect the safety of Australians who travel by air but do not impose unreasonable burdens on the aviation industry.

The new system will allow airlines to appeal to the Administrative Appeals Tribunal in the event an international airline licence is not granted by the Civil Aviation Safety Authority. It will also clarify the application of international airline licences to common commercial aviation agreements such as code sharing, where two airlines sell tickets for the same flight, and wet leasing, where one airline sells tickets for a scheduled international service but hires the aircraft and crew from another airline to operate the flight. Additionally, the Civil Aviation Safety Authority is currently limited in its ability to regularly audit and enforce the rules regarding non-voidable insurance for passenger-carrying air operators. Under the proposed new system, the entire regulatory framework for international airline licences will move under the Air Navigation Regulations 1947. This will simplify the current system.

The bill proposes that air carriers be required not to obtain a certificate of compliance from the Civil Aviation Safety Authority before operating a flight but to provide a declaration that they have appropriate insurance. Failure to provide such a declaration would incur a minor administrative penalty. The authority to carry passengers, however, will only be valid whilst carriers hold appropriate insurance. If the insurance were to lapse, the authority to carry passengers would automatically lapse. Carrying passengers under these circumstances would trigger criminal sanctions.

The Civil Aviation Safety Authority will also be given authority to regularly audit air carriers and ensure that they are in compliance with mandatory insurance rules. This will streamline the administrative processes and enable the Civil Aviation Safety Authority to proactively enforce insurance requirements for air carriers. To date, the current system surrounding the issuing of international airline licences and carriers’ liability insurance has not resulted in any major breaches of public safety, and such a breach may never occur. The coalition accepts, however, that this regulatory framework can be finetuned and improved. That is why, under the previous government, the then Department of Transport and Regional Services issued a discussion paper in 2005 proposing a number of changes to Australian aviation regulatory processes. Such changes included revising the system of perpetual licensing introduced in 1994 and the system of mandatory carriers’ liability insurance introduced following the Monarch Airlines crash in 1993.

The coalition discussion paper also suggested that Australia should accede to the Montreal convention. Parliament has now approved a bill doing just this and the coalition—in fact, all parties—were happy to support our accession to that convention. Likewise, the coalition are willing to support further implementation of the changes suggested in the paper, such as finetuning the system of perpetual international air licences and the rules regarding mandatory carriers’ liability insurance. The discussion paper was widely circulated amongst the Australian air travel industry in 2005, and its proposals met with the approval of key aviation stakeholders. Further consultation with carriers, including our major airline operators in Australia, has confirmed that these measures still enjoy industry support. The coalition are proud of our efforts in government to modernise Australia’s aviation legislation. We supported acceding to the Montreal convention and are happy to support the latest round of changes to improve efficiency in the air travel industry and to protect Australian passengers.

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