The PwC/Air New Zealand application for Aeroplane Pilot to be included on the Immediate Skills Shortage list Submission by GAA The General Aviation Advocacy Group of New Zealand August 9 2013 1 Contents Summary of the GAA position Part 1 - Rebuttal of Air New Zealand's Supporting Information List of New Zealand Air Carriers Part 2 - In pursuit of a career in aviation Evidence and opinion from co-submitters Pilot data from the GAA survey Background to the lead submitter List of co-submitters Australian ATSB Pilot Experience Study 2013 Acknowledgements 2 Summary of the GAA position This submission by the General Aviation Advocacy Group of New Zealand to the Ministry of Business, Innovation & Employment opposes the application by PricewaterhouseCoopers, on behalf of Air New Zealand, to have “Aeroplane Pilot” added to the ESID lists and requests preservation of the status quo. GAA and its supporters reject the applicants' claim that “The New Zealand Aviation industry is experiencing a pilot shortage of significant proportions” In this submission, we seek to establish that the application must be rejected because it does not meet the criteria, and no such skills shortage has been proved. For the application to succeed, it must meet several important criteria, which PwC and Air New Zealand have failed to do. They must show, among other things, that: The shortage is not employer-specific There is evidence of employers having difficulty employing staff (note our emphasis on the plural) The shortage must be across all geographic regions in New Zealand It must be a current shortage, not an anticipated one There must be an ongoing and sustained (absolute) shortage, both globally and in New Zealand. The claim by Air New Zealand and PricewaterhouseCoopers that "The New Zealand Aviation industry is experiencing a pilot shortage of significant proportions" is entirely their own. It is not supported by any credible third party evidence in the proposal, and the allegation is rebutted in our submission (which relies on verifiable evidence gathered over a very short period). 3 Moreover, we see no evidence that local operators independent of Air New Zealand are suffering from a shortage of pilots. On the contrary, it appears that they enjoy a very low level of pilot turnover. If the roughly 33 operators we list were experiencing a shortage, it would be reasonable to have expected them to support the PwC/Air NZ application (had they been aware of it) but there is, again, no evidence of such support - or even general awareness of the proposal. There is no evidence, within the application, of PwC/Air NZ having consulted with the wider 'Aviation industry' over its proposal. To the best of our knowledge, no subjective survey of the industry was carried out by the applicants before the PwC/Air NZ proposal was filed. The Aviation Industry Association, led by its chairwoman, Irene King, is known to have been involved with Air New Zealand in supporting the application; but there is no evidence in the application that the AIA consulted its members on the issue. We also know that this application was made without the knowledge or involvement of the New Zealand Airline Pilots Association, a body which - perhaps above all others - could have been expected to have an interest and involvement. GAA seriously questions the manner in which this application was made, because it is clear that few potential stakeholders had any knowledge before GAA exposed it to the wider public. It is alarming that submissions to this proposal would have closed on July 26, had not NZ ALPA stepped in to achieve an extension of the deadline. This strongly indicates that the application was not adequately promulgated to interested parties. Some industry pundits predict that during the next 20 years, there may be a worldwide shortage of pilots and technical support staff. For example, we refer to a Boeing study of 2012: http://www.boeing.com/boeing/commercial/cmo/pilot_technician_outlook.page However, this forecast has no relevance to the contemporary New Zealand scene, or the application. We can see from the application that it is Air New Zealand-focused, and even if the Ministry were to regard the regional airlines as separate businesses, the application must fail purely because the Air New Zealand Group recruitment system is the single entry point for those with the skills that are claimed to be in short supply. Air New Zealand claims to support the training of future airline pilots, through its 4 links with five training establishments. However, while Air NZ has a well- established "sponsorship" and monitoring system for the training schools, it fails to meet demand in one very significant respect: It fails to provide a bridge between the flying school's product, the Commercial Pilot Licence holder, and his or her career with our national carrier as an Airline Transport Pilot Licence holder. Instead, a newly qualified holder of the Commercial Pilot Licence is cast adrift to find a job somewhere else, in order to build enough hours and gain additional experience and qualifications to meet the airline's requirements for a recruitment interview. This is an extremely onerous challenge. If there is any shortage at all, it boils down to this: Young CPL holders are forced to take employment in poorly-paid positions in New Zealand in order to build their hours or They go overseas, find somewhere to develop their skills, which then reach the stage where they pursue their careers in another country, with promotion and salary prospects that Air New Zealand fails to match. There is a large and verifiable constituency of expatriate New Zealanders who are well-qualified to fill positions within the Air New Zealand Group, but (as we show) find the Air NZ terms of employment unacceptable. This is, in fact, the real shortage: Air New Zealand pays lip service to professional pilot training, but fails to follow through by committing itself to develop the resulting output - then "identifies" a local staffing crisis for which it is, in large part, responsible. Moreover, it does not meet the career expectations of qualified New Zealanders working abroad. In this submission, we demonstrate that there is an enormous enthusiasm for careers with Air New Zealand amongst New Zealand flying students and this is not matched by a formal Air New Zealand career path from flying school to the airliner cockpit, with committed and long-term investment from the airline in a cadetship scheme. Air New Zealand has always rejected such a scheme, but there is new and compelling evidence from Australia that they are worth investing in. We provide the report, for the guidance of the Ministry and the airline. Because of this dreadful failure on the part of Air New Zealand, many of our most promising and ambitious students leave New Zealand, taking a very 5 important pool of talent away from our nation. This has been occurring for many years and the record shows that most of this expertise is lost forever. Unless Air New Zealand adopts globally competitive remuneration, working conditions and more realistic promotion paths, to become an "employer of choice", it is unlikely to either persuade current ex-pat pilots to come home, or to attract the "right stuff" from other nationalities. Given its uniquely privileged position in our country's economy, Air New Zealand has a duty to adopt a more responsible employment policy than a privately owned, budget airline. The PwC/Air New Zealand submission is, in short, an opportunistic attempt on the airline's part to abrogate its responsibility (as the monopoly controlling force in this country's commercial aviation) to fully support and develop training opportunities for young New Zealanders, recruit eligible New Zealand pilots living here, and make it more attractive for expatriate pilots to return. It is also disturbing to note that advertisements for aircrew whose qualifications closely match the requirements of Air New Zealand began to be posted on an international recruitment website in July - long before this application came to be considered by the Ministry. They could only have come from one source. False predictions of pilot shortages are not new. Take, for example, this one from 2003, which features the Aviation Industry Association and its chairwoman, Irene King, a supporter of the current PwC/Air New Zealand application: from The New Zealand Herald, in which it is stated Pilot shortage looms as fewer train 5:00 AM Monday Nov 17, 2003 The aviation industry is predicting a pilot shortage within four or five years following a Government cap on the number of students next year. In response to the looming shortfall, the Aviation Industry Association (AIA) has suggested several strategies to reduce the impact of the move. AIA chairwoman Irene King said that for the past decade about 300 new pilots a year had entered the market having received their commercial pilot's licence. With the cap - restricting total student numbers to 775 fulltime equivalents, 6 including a new entrant limit of 350 - the number of people receiving their commercial licences in 2005 was predicted to drop to 130, she said. On present predictions, by 2007 there could be problems finding enough experienced pilots for "lower end" services, such as scenic flights. The AIA is predicting that pilot shortages will start to filter through to heavy commercial aviation by 2009/10. It pointed out the problem had arisen at a time when demand for pilots was at an unprecedented high with major scheduled operators ramping up services, and a new entrant about to enter the market. AIA president John Funnell said taxpayers had every right to ask why they should be lending more than $30 million to students and funding tertiary institutions only to see students disappearing overseas.