Among the latest WikiLeaks cables out of the US Embassy in Canberra is one that blows away the myth making about how superbly CASA was regulating air safety in Australia, at least until the current overhaul took hold under a new director of safety.

The cable explains why CASA’s director of safety, John McCormick, has been given a much expanded budget and a tight timetable to overhaul the air safety regulator.

In short, the cable shows that CASA was so bad at carrying out its obligations that it risked causing Australia’s International Civil Aviation Organisation or ICAO rating to be busted from level one to level two by March last year.

And under America’s much tougher air-safety rules, a level two rating would have compelled the US Federal Aviation Agency to cancel the Qantas code share with American Airlines, deny V Australia any additional flights, and enforce enhanced oversight of all Australian airliners using American airports by its FAA inspectors.

The damage to the reputations and earnings of V Australia and Qantas would have been considerable.

The run-up to this regulatory crisis had been in the making for many years as US and ICAO audits raised doubts about how effectively Qantas air safety oversight was conducted by CASA and its predecessor.

By late 2008, ICAO had conveyed its assessments to the FAA, and they were reported in 2009 by Crikey and Plane Talking, with the UN body damning CASA  for a range of deficiencies:

  • Australia didn’t even provide navigational charts fully compliant with international standards.
  • CASA training provided to technical staff is insufficient to address the competency requirements for all the technical tasks.
  • Airworthiness inspectors used some procedures that didn’t fully reflect the required level of detail or are not kept up-to-date.
  • CASA had not developed and implemented essential procedures for approving modifications and repairs, or to review and approve an airline’s maintenance control manual, or approve leases of jets from abroad.
  • The regulator had not provided industry with “sufficient guidance in relation to unapproved parts”. And it hadn’t “developed guidelines for the proper usage of parts removed from aircraft no longer in service and for the disposal of scrapped parts”.
  • Australia lacked one of the foundations of airline governance in the developed world, in defining the corporate responsibility for safety by the managements of carriers.
  • ICAO found that “There are no regulations in Australia that … clearly define the direct accountability for safety on the part of senior management”.
  • The body noted that CASA delegates some tasks such as flight proficiency checks to qualified persons within an airline, but “CASA does not perform sufficient safety oversights of these delegated individuals, as the surveillance program is not being fully implemented”.

In short, CASA was undertrained, underfunded and incapable of understanding or meeting its obligations to airline safety oversight in the 21st century.

The FAA audit the WikiLeaks cable refers to is the FAA mission to find out first hand if the situation was as bad as ICAO said, and it was, even thought CASA had started to make reforms.

The FAA team had arrived in Canberra late in November 2009, after which the US Embassy informs Washington DC that Australia is very keen to prevent a downgrade to level two but that the possibility this will occur is very real, and details a worst-case scenario in which this could be confirmed and made official by March 2010.

This was, however, averted by diplomatic pressure in Washington DC and a sharp rise in funding for CASA under the direction of McCormick stapled to an extensive set of commitments to remedial actions that CASA continues to work on meeting and sustaining.

The FAA audit that Australia initially failed to satisfy came after decades in which the Australian policy setting had been to trust the major carriers to do the right thing, and to devote disproportionate CASA resources to prosecuting breaches by general aviation and third-tier regional operations.

However even there CASA had been a failure, as demonstrated by its determined unwillingness to impose safety compliance on the known yet tolerated dangerous operations of Transair before one of its flights crashed on approach to the Lockhart River strip in  far northern Queensland in 2005, killing the 15 people on board.

That accident, a rising sense of unease over serious Qantas and Jetstar incidents, and the FAA process that followed up and confirmed the ICAO concerns, had all set up CASA for serious change by the time the 2010 federal budget threw long overdue additional funding at the safety regulator.

CASA is in the midst of unprecedented regulatory reform and is clearly working to very tough deadlines to fix what is not widely acknowledged in the general media, which is sensitive to airline advertising revenues and unaccustomed to doing much more than cutting and pasting PR releases and day-old financial analyst bulletins.

Since this flirtation with an FAA downgrade, CASA has demonstrated its toughness by suspending Tiger Airways flights in July and early August of this year and as been reported by Crikey and Plane Talking as having threatened other larger Australian carriers with the issuance of a show-cause notices against their air operator certificates unless they promptly respond to and comply with any of its concerns as or when they arise.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey