15 June 2006 BTRE COLLOQUIUM 1 Towards a New Beginning: A Blueprint for Recovery Michael Bridge CEO - Airnorth Regional Chairman - RAAA

15 June 2006BTRE COLLOQUIUM2 Outline  What Is Regional Aviation?  RAAA Today  The Issues Today –National perspective –Industry perspective  The Future  Blueprint For Recovery

15 June 2006BTRE COLLOQUIUM3 Who Is Regional Aviation?  Regional Airlines  Charter Operations  Aeromedical Operations  Aerial Work Operations  Maintenance Organisations  Regional Flying Schools  Regional Airports, and  The Businesses That Support Them

15 June 2006BTRE COLLOQUIUM4 The RAAA Today Operators19 Employees2,500 Annual Turnover $600m Annual Passengers 2,000,000 Annual Freight 23,000 tonnes Supporting Businesses 37

15 June 2006BTRE COLLOQUIUM5 The Issues Today - National  Changing demographics  Market based policies  Smaller communities losing services: –Social costs –Economic costs  Medical  Agri-business

15 June 2006BTRE COLLOQUIUM6 The Issues Today - Industry  Inadequate return on investment and effort –Runaway costs:  CASA  Security  Fuel  Airports  Looming staff shortages esp pilots and LAMEs  Aging aircraft

15 June 2006BTRE COLLOQUIUM7 The Future  Depends both on Government and ourselves –Need a market –Need access to:  appropriate airports  enough adequately trained staff  appropriate aircraft (and capital) –Need fair return on investment and effort:  support from market  appropriate regulatory environment  appropriate economic conditions

15 June 2006BTRE COLLOQUIUM8 Blueprint for Recovery  Recognise things we can not change: –Declining populations in the bush –Lack of economies of scale –Lack of replacement low capacity aircraft  and work on the rest

15 June 2006BTRE COLLOQUIUM9 Blueprint for Recovery  Industry: –Work more closely with other segments:  Strength through unity –Work together more within own segment:  Create economies of scale –Help fix the LAME problem:  Improve pay and conditions for technical staff  Employ apprentices –Improve marketing of industry:  Recruitment  Attractiveness of air travel  Reasonableness of fare structure

15 June 2006BTRE COLLOQUIUM10 Blueprint for Recovery  Government: –Recognise significance of regional aviation –Make CASA less intrusive, more efficient, less costly  Review Act and Regulations  Make CASA more accountable –Reduce security cost burden on industry –Control airport pricing and activities –Facilitate technical training like academic training –Provide tax relief for upgrading (depreciation and CGT) –Develop RASS to encourage expansion of services

15 June 2006BTRE COLLOQUIUM11 Conclusions  Regional air services are: –essential to rural and remote communities’:  social well-being  economic well-being –in decline –held back by  small market size/long routes  runaway costs: –government charges (CASA, security) –fuel –airports –lack of economies of scale  looming staff shortages  aging aircraft  It is time for change

15 June 2006BTRE COLLOQUIUM12 Conclusions  Unless things change, the end is in sight for many more regional services and regional operators  Industry’s challenge – –to work together to develop some economies of scale –to provide better pay and conditions for staff –to market itself better to the public  Governments’ challenge – –to change policies to  remove unnecessary economic burdens (federal and state level)  remove unnecessary regulatory burdens  encourage aviation  extend the incentives for academic training to technical training We don’t want a hand out – we seek a fair go

15 June 2006BTRE COLLOQUIUM13 THANK YOU