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P2 comment: Although we did eventually track the EAL down he is apparently still knackered from his soiree in the Never…Never, so in the meantime here is Thorny with Part II… 😉 
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Given Australia’s heavy involvement in most formal international conventions that examined aviation regulation from the first Paris convention in 1919 to the Chicago convention of 1944 its somewhat surprising that we drifted off on our own regarding regulation, its not as though we were totally isolated from the rest of the world.

Admittedly most of these international conventions and conferences, up until the development of ICAO SARPS, were focused more on Sovereignty issues versus freedom of flight, rather than setting common standards for regulation.

Australia was very involved with the development of the SARPS as were experts from all member states. Considering the SARPS were developed by experts from around the world with Australia contributing, we hardly embraced them.

There are literally thousands of differences notified to ICAO between Australian regulations and the recommended SARPS

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Australia at the end of WW2 was still tied to Britain’s apron strings both in terms of trade and in its legislative philosophy. Under the Westminster system “Rights” were “privileges” conferred at the discretion of the crown. This had a huge influence on the framing of Australian regulation.

The “Buy British” ethos permeating through Australia’s bureaucracy was a severe impediment for growth in the general aviation industry.

The United States was powering ahead in the development of aircraft suitable for private use as a result of pre-war government policy that encouraged growth in pilot numbers.

In Britain the focus was on commercial airline development to rebuild its civilian industry devastated by the war.

In Australia we just meandered along under legislation enacted in 1920, growth limited by the defence establishment.

Australia was not bereft of innovative ideas or inventions, but buried in red tape commercial development was almost impossible, it was left to overseas entrepreneurs to develop our ideas and realise the profits.

How the USA Civilian Industry dodged a bullet

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The Civilian Pilot Training Program (CPTP) was a flight training program (1938–1944) sponsored by the United States government with the stated purpose of increasing the number of civilian pilots was the catalyst for general aviation development in the USA.

Growing concerns within the military regarding preparedness for a looming possibility of war triggered it, along with the knowledge that several European countries, in particular Nazi Germany and Italy were training thousands of young people to become pilots. Purportedly civilian in nature it was obvious they were nothing more than military training academies.

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The Civil Aeronautics Act of 1938 authorized funding for a trial program for what would evolve into the Civilian Pilot Training Program (CPTP). President Franklin D. Roosevelt unveiled the program on December 27, 1938, announcing at a White House press conference that he had signed off on a proposal to provide a needed boost to general aviation by providing pilot training to 20,000 college students a year.

The CPTP was established as a civilian program but its potential for national defence was undisguised. The program started in 1939 with the government paying for a 72-hour ground school course followed by 35 to 50 hours of flight instruction at facilities located near eleven colleges and universities. It was an unqualified success and provided a grand vision for its supporters—to greatly expand the nation’s civilian pilot population by training thousands of college students to fly.

The military establishment was initially unenthusiastic about the CPTP concept, quite opposed to any program initiated and administered by civilians.

(Sound Familiar?) 

After war in Europe broke out in 1939, the military value of the CPTP became obvious, even to the program’s detractors. The United States started to evaluate its ability to fight an air war and the results were appalling. Pilots, instructors, and training aircraft were all in short supply.

Acknowledging the shortage of trained pilots, both the Army Air Corps and navy reluctantly waived certain “elimination” courses for CPTP graduates and allowed them to proceed directly into military pilot training.

The Army Air Corps deemed the situation to be so grave it proposed that private aviation be suspended and all pilot training (most notably the CPTP) be brought under the control of the military. The December 13, 1940, issue of American Aviation Daily carried this account of the Army’s intentions:

“Preliminary plans are understood to be already drafted by the Army to ground all private flying in the United States for the duration of the national emergency.

The Army will take over all training (including CPTP).”

A salutary lesson for Australia’s general aviation associations?

The Civvies were having none of it.

Just two weeks after the American Aviation Daily article appeared, 83 companies with a vested interest in general aviation organized the National Aviation Training Association (NATA). NATA members recognized that, if left unchallenged, the Army plan would, for all practical purposes, ban private aircraft from U.S. skies.

The NATA and other aviation interests with an effective lobbying campaign in Congress blocked the army’s intentions.
Their actions not only saved the CPTP, they may have saved the entire general aviation industry in the United States.

When industry unites and says NO great things can happen!

The CPTP was revitalised and expanded its curriculum to a larger segment of the nation’s colleges and universities. In May 1939 the first nine schools were selected, nine more were added in August 1940 (as the Battle of Britain was raging), 11 more in March 1941, and 15 more by October 1941—four months after the formation of the USAAF—and just two months before the United States’ entry into World War II.

By the program’s peak, 1,132 educational institutions and 1,460 flight schools were participating in the CPTP.

The decision to train civilian pilots also produced an unexpected, but welcome, side effect for the general aviation industry.

As it turned out, the United States faced just as large a shortage of training aircraft as it did civilian pilots. The federal Civil Aeronautics Authority (predecessor of the Federal Aviation Administration) regulations required a CPTP-participating flight school to own one aircraft for every ten students enrolled in the program.

Seizing the opportunity unexpectedly thrust upon them, several light aircraft manufacturers quickly filled the market void with CPTP-compatible aircraft.

The CPTP/WTS program was largely phased out in the summer of 1944, but not before 435,165 people, including hundreds of women and African-Americans, had been taught to fly.

The CPTP admirably achieved its primary mission, best expressed by the title of aviation historian Dominick Pisano’s book,

“To Fill the Skies with Pilots.”

Australia Post WW2

The Labor government of the immediate post war era followed a policy of strict control over the rapidly expanding aviation industry.

It was perceived that the public demanded high levels of safety (determined by who?) with the result that expenditure by the Department of Civil Aviation on anything regarded as affecting operational safety had the political advantage of hardly ever being questioned by Ministers of the government or opposition members.

Sound Familiar?

Labor was politically committed to introduce legislation to nationalize the airline system, which in pursuance of this aim established the Australian National Airlines Commission which controlled a wholly government owned Trans Australian Airlines which began operations in 1946 its main competitor at the time was privately owned Australian National Airways

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When Labor was voted out of office in 1949, replaced by the new conservative government lead by Robert Menzies the privately owned airlines were struggling against the strong competition from the government owned TAA.

In a statement Menzies said;

“We are still only at the early stages of air transport. As for the government airlines, which were designed by the Chifley government to be monopolies (and failed to be so only because of a High Court decision), we shall put them on to a true competitive basis, with no preferences either in cheap capital or dollar expenditure. Though the future of their operative staff is assured, because Australia needs them, in the form of their future management and control will be considered in the light of results and circumstance”

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Thus began Australia’s two airline policy, an era of strict regulation, strongly government controlled, in a way to achieve the government’s desired goals.

It was decided that forms of regulation should be ‘instituted’ to give both the government owned airline and the private airline equal access to the market place through an agreement between government and the two opposing airlines.

Aviation and government have always seemed to encompass a strangely symbiotic relationship in Australia. None more so that the post World War II period between 1952 and 1987. For nearly forty years the various governments of the day unashamedly, in a decidedly paternalistic manner, manipulated the Constitution to limit access to Australia’s domestic interstate aviation industry exclusively to only two domestic airlines.

Pivotal to the success of the policy was the ‘collusion’ of the private airline to agree to be bound by the terms of the original and then successive Airline Agreements.

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Section 92 of the Constitution of Australia, as far as is still relevant today is:

.. trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free.

On the face of it, sec 92 of the Constitution, which guarantees freedom of interstate trade, would seem to prohibit economic regulation of interstate aviation. However in return for certain ‘benefits’ ANA (later Ansett), bound itself to the Agreements and in reality in so doing ‘colluded’ with the government to circumnavigate the constitutional intent of s 92. In essence this outcome was able to be achieved by the Commonwealth, with the use of the unequivocal power it held to control the importation of aircraft.

It was in the undoubted interests of TAA and ANA to agree to certain ‘restraints’ as a safeguard to defend their common interests against competitive challenges by outsiders.

During the period the “two Airline” policy was in force general aviation was severely limited in its ability to grow. The availability of relatively cheap GA aircraft from the USA saw growth in flying training, but the commercial side of the industry was impeded by regulations such as the iniquitous Reg 206 that limited a charter operator from operating to a location served by an airline. Airlines themselves were quick to complain if charter aircraft turned up at “their” airport too frequently. The commonwealth’s power to restrict importation of aircraft also impeded growth. GA operators quite often saw a non RPT opportunity and endeavored to develop it. Only to have their hopes dashed by being unable to import suitable aircraft, on some occasions having their idea usurped by one of the airlines.

Another classic example was the Ipec airfreight imbroglio which actually went to court  without success.

It was even a battle to get the first Learjet into the country over objections from the airlines. Even State government’s got in the act and placed restrictions on GA operations.

Regardless of these impediments there was patently a demand for air services around the countryside, especially in rural NSW. Public demand saw a relaxation of the rules and the licensing of small “commuter” airlines to service this demand.

Regulation was extended to Charter Air Operators Certificates to allow regular services, which saw the rise of “Commuter” airlines such as Masling’s and Hazelton’s serving many small towns rural communities.

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By the late 1970s cracks were beginning to appear in support for the two airlines agreement. An inquiry in 1978 favored maintaining the system, but criticism grew. The USA had deregulated its domestic airline industry. Comparisons were being made between Domestic fares in Australia compared with the US much lower fares for comparable journeys.

The duopoly in Australia prevented competition, airfares were controlled by agreement, even timetables were set, which quite often didn’t match the markets requirements but rather the airlines convenience.

Another inquiry in 1981 failed to prevent the Liberal government in power from signing a new two Airline agreement. This agreement was to last until 1990 when it was finally abolished. As the disparity between Australian fares compared with overseas grew, so did the criticism.

Labor came to power in 1983 and influenced by aviation activities overseas, called for an ‘Independent Review of economic Regulation of domestic aviation’ (The May Commission). Its report to government in 1987 was exhaustive, but did not enunciate why the two-airline policy had actually outlived its usefulness.

Instead it offered the government five options between maintaining the status quo and total deregulation. Labor chose deregulation.

Controls over importation of aircraft, fares and passenger capacity were abolished opening up the entry of new domestic operators.

The policy that followed was in stark contrast to that which had gone before. In a sense it reflected the global thinking of the Western world some 40 years on, one now very favourably disposed to the free flow of market forces with far less government regulatory involvement.

While not all in the industry were happy, the media was ecstatic proclaiming

“A new and beneficial era in civil aviation policy even before it had arrived and been tested’.

With price controls about to go and the prospect of new competition in the market place, the existing domestic airlines were anxious to improve productivity. Pilots on the other hand were anxious to protect their employment conditions. This culminated with the 1989 ‘Pilots dispute’.

From the pilots perspective the whole episode ended in disaster, the government sided with the airlines and determined not to be beaten, used some, at times, rather dubious means to ultimately crush the pilots and their union.

Deregulation, set to commence in 1990, set in train the bureaucratic nirvana of  regulatory ‘Reform’ beginning in 1988 with the passing of the Civil Aviation Act, which established the Civil Aviation Authority (CAA) as a Commonwealth Statutory Authority on the 1st July 1988.

The ethos of “cost recovery”, making regulation a profit center for government by allowing the regulator free reign to devise regulations for profit rather than regulation for service, along with the coming airport privatization, which in reality was a means to effectively borrow money off books against publically owned infrastructure at bargain basement prices.

The entities created had little interest in the development of aviation, rather the massive, tax free monopolistic dollars the privatization rort provided.

Thus began the slow and inexorable demise of general aviation in Australia.

Part III to follow.

P2 edit – Hmm…maybe refer to LB and these links/pics etc..etc for Part III TB… Wink 

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Pic ref links: & Is Carmody the Iron Ring’s Mr Fixit?