Aviation, tourism and energy writer for the Business Herald

Safety levy boost 'threat to firms'

Plans to change the safety regulation regime for aircraft operators could threaten some businesses, says Aviation NZ. Photo / Mark Mitchell
Plans to change the safety regulation regime for aircraft operators could threaten some businesses, says Aviation NZ. Photo / Mark Mitchell

Plans to change the safety regulation regime for aircraft operators could threaten some businesses, says Aviation NZ.

While consultation is under way and no final changes have been arrived at, some sectors will pay more than they do now as part of a rebalancing.

The Civil Aviation Authority wants operators in the "other commercial" category - including small passenger, freight-only, agricultural and commercial recreation operators, such as tandem parachute, paraglider or hang glider operations - to meet a greater proportion of their costs of regulatory oversight.

These levy changes would be phased in over three years.

Aviation NZ chief executive Samantha Sharif said no figures had been provided but according to its own calculations some operators would pay up to 30 times what they pay now for regulatory surveillance.

"Some of the largest operators are going to face between $30,000 and $60,000, from $1000 to $6000," Sharif said.

There was a risk some could be put out of business.

"It's certainly possible - some of them operate on fairly thin margins. The smaller operators don't have the ability to pass on and can't pass it on in the form of passenger charges for example."

However, a CAA spokesman said levies, fees and charges were last set in November 2012, and there had been no increase since then.

"The review in 2012, which was approved by the then government, was the first in 17 years," the spokesman said.

The effect of the proposals being consulted on is that some operators would pay more and some would pay less.

The CAA estimates that about 56 per cent would pay more over the 2016/17 to 2018/19 period.

The CAA is seeking to rebalance revenue sources so that the "other commercial" category makes a greater contribution to meeting the costs of oversight.

"The proposals will not achieve full cost recovery from Other Commercial Operators," the spokesman said. "For example, currently the cost to the CAA for oversight of Other Commercial operations is 23 per cent of total expenditure while that sector contributes 7 per cent of revenue."

Some operators would pay up to 30 times what they pay now for regulatory surveillance.
Aviation NZ chief executive Samantha Sharif

The proposals will see the Other Commercial operators' proportion increase to about 9 per cent.

Sharif said many of her 350 members were worried about the authority's rate of spending increase - especially in personnel expenses where it says CAA staff costs have increased by 43 per cent between 2011 and 2015 and the average salary has increased from $109,914 to $122,582.

The authority spokesman said it had been adjusting its salary levels to align more closely with median levels in the public service as CAA salaries had fallen "significantly" behind.

"In addition the CAA has to meet the natural wage and salary movements to stay competitive in what is an international market for many of its professional and technical staff."

- NZ Herald

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW

© Copyright 2016, NZME. Publishing Limited

Assembled by: (static) on production bpcf02 at 27 Sep 2016 17:02:55 Processing Time: 559ms