Dear #Customer.FirstName#,
 

This week Bruce Heesterman speaking about achieving our $16Bn sector revenue contribution goal ……..  

Greetings.  It is a pleasure to bring forward a few thoughts today following on from the comments of Dale and Graeme over the past two weeks about the future direction of Aviation New Zealand (AKA “AIA”). 
 
I have Chaired Aviation New Zealand Limited for nearly three years and as we merge and become one organisation it’s timely to reflect on what the growth or export agenda is all about.  I appreciate that you will probably have heard all sorts of facts and figures thrown about regarding aviation exports and I will try and resist repeating them all today.
 
In my view every member company must be part of the aviation export drive.  The traditional view has been that exporters are those companies that spend hours flying to foreign markets, watch fluctuations in currencies nervously and get to strike up deals in locations whose capital city is unpronounceable … and of course cleverly sell goods and services overseas.
 
 I believe our thinking has to move past this definition if as an industry we want to really grow.
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There are a couple of ways to look at this.  Whether you operate two aircraft dropping fertiliser in the hills behind Gisborne or are a chopper operator flying people into the Southern Alps on heli-skiing adventures or lastly sell clever comms equipment globally. Our collective performance record is an integral part of the New Zealand aviation brand. 
 
Look at the coverage last weekend of the reported near miss between two Qantas aircraft over Australia.  Whatever the cause of the loss of separation, and never mind that TCAS did its job correctly, as a result of this the reputation of aviation in Australia took a hit. 
 
Secondly, we are frequently used as the test bed for innovation and we are a nation of fast and first adopters of new technology.  Thus organisations that do not consider themselves exporters in the traditional sense, are in-fact a critical part of the development cycle for new products, services or trained professionals.  There are lots of examples of this, but Flightcell stands out as one where the comms unit was developed to solve a local operator’s problem, expanded to meet other local operators’ needs and now is a truly global product.
 
Of course as much as I define us all as exporters, we are all local operators too. As companies expand overseas they innovate, invest in new plant and equipment and grow the capability of their people.   All of which is available back to the local market bringing a range of tangible and intangible benefits to the industry.
 
However proud we are of our own country the fact is that it is small and the local market is both finite and experiencing only moderate growth. Ideally to grow value we need to play in a bigger market.  The same is not the case in many other countries where a burgeoning middle class is driving extraordinary aviation growth.   There are lots of examples but India for example has an aviation industry the size of Australia, but a population 50 times that of Australia and an aviation growth rate of roughly twice CPI.  Add in China, Brazil, Indonesia, the Gulf states not to mention emerging economies in Africa overlaid by projected aircraft sales and the export potential is simply enormous. And will be for the foreseeable future. 
 
I do sense that there is a danger of export fatigue setting in where we hear of the possible fabulous opportunities but never seem to be closer to them.  The fact is that we are securing great wins in all sorts of locations although I admit we are not terrific at telling these stories widely.  This needs to change.
 
As New Zealand exporters we do have some advantages over the competitors including being the third easiest place to do business with and being in the top three least corrupt places to do business. Aviation is an integral part of our national economy, having efficient regulation and inter-government cooperation in place (yes, truly) and having an extensive base of customers overseas as reference sites in place.
 
 Offsetting these of course are some barriers too.  We lack scale and we don’t work well together as an industry. We lack a cohesive brand on the international stage and tend to think small, or at best medium, instead of big. Some regulatory changes would assist growth too.  
 
In my view the newly configured Aviation New Zealand is about exploiting the strengths and eliminating or reducing the impact of the barriers.  This will allow New Zealand aviation to truly dominate the global scene; something I really believe is achievable.
 
As Graeme said in his letter two weeks ago doing the same old thing will not get us achieving the big goal of a $16 billion sector revenue contribution to our economy anytime soon and I want to leave you with four things to consider about moving forward:
 

1. We need to think bigger.  Much bigger. Rather than being a supplier of just airport fit out expertise we need to own the airport.  Instead of bringing groups of 30-40 ab initio trainee pilots into New Zealand we should be looking to secure a 1000 per year. We should be chasing the high value and high margin work and not be content to be only component suppliers to the industry.
    
2. We need to trust each other more.  This might sound oxymoronic in an industry that thrives on competition but I think we need to trust Aviation New Zealand to act in the interests of the industry as a whole even if we individually don’t benefit from every action.  We need to trust the leaders and employees in Aviation New Zealand to do their job.  Most of all we need to find models that allow competitors to collaborate and bring more lucrative and bigger work to New Zealand than is possible alone.  The wool, wine, education and milk industries can do it, but so far it seems to elude us.
    
3. We need to act now. The opportunities will not wait for New Zealand. There is $600 billion of aviation infrastructure spending happening in just three countries.  The pilot and aircraft engineer shortage globally is growing, not abating. The industry spends $700 billion annually on operating costs and we can assist in reducing this. The aviation services industry is valued, conservatively in my view, at $50 billion annually.  This is all happening now.   Closer to home the World Bank is poised to award over $100 million to aviation infrastructure spending across the Pacific Islands that we should as NZ Inc try and grab.  It will not come knocking on the door and it will go to someone else if we do not act both swiftly and with each other.
    
4. Aviation New Zealand needs to perform well.  As Dale spelled out in his note last week, we do as singular and rebranded Aviation New Zealand need to see it working really well and effectively.  This includes the mundane but critical collection of debt, through to resourcing and having the right people to do the right thing for members.  It includes building up the membership and improving communications in the industry and to the population at large. We need to work with government departments to get rules, regulation and funding aligned for growth and we need to get our divisions and grass-root activities in Aviation New Zealand really humming to deliver for members big and small.

How to summarise?  Whether you buy my argument that we are all, as part of the New Zealand aviation industry, exporters or not, the fact is that the industry is too small to be fractionated, mis-aligned and focussed on the wrong thing.  My view is that we all must make the newly shaped Aviation New Zealand work exceptionally well to maximise the benefits.  This could be in the form of safety, efficiency, innovation or value creation to members and groups of members alike.  We can all take deliberate and positive action to make this a reality and if you are a glass half full person like me, then there are tremendous opportunities for all at stake. 
 
Have a great week.
 
Bruce
 

4 October Unattended Aerodrome consultations – the list click here, the essence (click here) – when this consultation paper was received the email comms lit up in Aviation New Zealand.  There are some big potential efficiency gains but also some big potential costs.  By now we understand Airways have been in touch with most parties. The time frames are being driven by CAA and we’ll be asking some questions of them.      
 
October 8 Submission of complaint to Regulations Review Committee. It will be robust and pointed. The clear message is that enough is enough and its time for government to recognise this sector’s contribution to the New Zealand economy. Did you know that government has tipped a further $2m into Maritime New Zealand to deal with the shadow of the ship formally known as Rena? Is this what it is going to take in aviation – a very scary thought.
 
October  15 CAA 1300-1600 Radio Frequency Outside of Controlled Airspace   click here  - did you know there are five possible frequencies for GA use in the vicinity of Fielding aerodrome?
 
October 28 Release for consultation of draft Airspace and Air Navigation Plan – detailed workshops 18-25 November all going well, with consultation complete by Feb. 2014. This is the road map and we would urge you to get involved because it charts more specifically our future in the skies through to 2023 in more detail.
 
Aviation Security Charges submissions closed.  Our response click here – its interesting because this is a case of multiple cross subsidisation operating throughout the country and between International and Domestic – while on the one hand CAA were ruthless in their ambition to remove cross subsidy in one context i.e. CAA the parent – its OK apparently within the subsidiary called Av Sec.  It also shows how difficult it is to actually prevent cross subsidies when you’re in a networked public good business. 
 
LIB 4 – we are attempting to engage with the policy gurus within CAA but no response at the moment. We’ve also asked them to consider removing LIB 4 or amending it to say that the interpretation is subject to review.
 
Civil Aviation Act Review   - comments called for by MOT.  We’re working on ours but progress has slowed while we prepare the Charges complaint.  If there’s anything you’d like addressed please contact us.
 
Productivity Council Submission on Regulations due 24 October.
 
GD on Colour Vision submission due end of November – we’re also collecting detailed data on a number of student loan pilots impacted by changed medical standards so if you know anyone in this situation please ensure they contact AIA

12 November Risk Management in Winch Operations, 12 November, Auckland Airport Domestic Terminal. 0900 1530 - more details to follow
 

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9 October meeting of new Logistics Division - venue to be confirmed Auckland Airport all AEANZ and Supply and Services members welcome to attend. Time 10.30 click here
 
Down to the wire – this is a major campaign which is gaining traction both in regulatory and customer circles.
 
AIRCARE – international paper presented in Europe explaining what it’s about and the brand values it represents.  Remember it’s about our businesses, our people, the environment and demonstrating we care about everything we do. 
 
World Investor New Zealand – we’re in intensive discussions to do a series of articles on aviation probably starting with the brand re-launch along with flight training and high end tourism operators.  Let us know if you are keen to participate, and also if you are interested in inclusion in a supplement potentially being developed for Islands Business in the South Pacific.
 
Aviation is in our DNA.  Many of you will have seen this book which has been used internationally for over 15 months.  A soft copy is available here http://www.aviationnz.co.nz/Overview.aspx
We are working closely with NZTE on the next iteration, which should be available by the end of October.  This is written from a customer perspective and is designed to be used by any aviation company.  It contains some great success snippets.
 

World Bank, South Pacific and Tonga A further consultancy package has been released to develop ‘Options for Regional Aviation Supply and Long-Term Sustainability of Regional Aviation Infrastructure’.  EOIs close 16 October.  More info click here.  We also have a list of consultants which have received the EOI request.  Let us know if you’d like that intelligence.

NZ economy – onwards and upwards
The BusinessNZ Planning Forecast shows nearly all key indicators for the economy are positive. click here
 

You asked what is the story with the proposed changes to ………“SIGMETS from mid November SIGMETS will no longer be in plain language i.e. specifying specific geographic point e.g.
 
NZZC SIGMET 2 VALID 230000/230400 NZKL-
NZZC NEW ZEALAND FIR SEV TURB FCST N OF NZPM S OF NZWR FL260/330 MOV S 20KT NC=
 
Instead they will be in Lat / Long - the same as for the New Zealand Oceanic Region - an example as follows:-  
NZZO SIGMET 2 VALID 230000/230400 NZKL-
NZZO AUCKLAND OCEANIC FIR SEV TURB FCST WI S3230 E16715 - S3515
E17115 - S3945 W17930 - S4100 E17930 - S3845 E17100 - S3415 E16600 -
S3230 E16715 FL260/330 MOV S 20KT NC=
 
Having the SIGMETS in plain language is a must - trying to decipher Lat / Longs in flight is a safety hazard for GA pilots and lacks common sense.”
 
We investigated and YES there’s agreement between the agencies concerned that commonsense must prevail.  CAA is working on it so watch this space.


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