Source: New Zealand Government
Introduction
Good morning.
Thank you, Simon, for that warm introduction, and thank you to the Aviation Industry Association for inviting me to speak today at your annual conference.
I’d like to begin by acknowledging Ashok Poduval, President of the Aviation Industry Association, and Simon Wallace, the Association’s Chief Executive. The work you do in advocating for your members and the broader aviation community is invaluable to your sector.
Your industry is vital to New Zealand’s prosperity. You connect us to the world, support our economy, and play a crucial role in our everyday lives – from enabling international trade and tourism to ensuring that communities across New Zealand have access to essential services.
Today, I want to talk about how the Government is working with you to support this vital industry, ensure its growth, and address the challenges we face together.
Aviation’s Role in New Zealand
This is an exciting time to be in the aviation industry. Aviation is not just a sector; it is a critical part of our national infrastructure and transport sector. Aviation contributes around 11 percent of our GDP, underlining its importance to our economy.
More than that, aviation is a lifeline for our communities. Whether it’s bringing in much-needed supplies to remote areas, facilitating business opportunities, or providing access to education and healthcare, aviation is central to our way of life.
The recent natural disasters, like the Kaikōura earthquake and Cyclone Gabrielle, showed us just how vital aviation is in times of crisis. Your industry stepped up to ensure that New Zealanders received the help and resources they needed.
Our Government’s Vision
At the heart of our work is a simple yet profound vision: to ensure that New Zealand’s aviation sector continues to grow, innovate, and contribute to a stronger, more connected, and more resilient country.
We are committed to building an aviation industry that not only supports economic growth but also embraces new technologies and maintains the highest safety standards. This is about more than just planes and airports; it’s about creating opportunities for all New Zealanders, whether they live in our bustling cities or our most remote communities.
The Government is committed to working alongside the aviation industry to foster innovation, remove unnecessary regulatory hurdles, and maintain our focus on safety. We aim to create an environment where businesses can thrive, where approval processes are swift and efficient, and where the industry feels supported, not stifled, by regulation.
Renewing the Focus of the Civil Aviation Authority
A key part of our plan involves ensuring that the Civil Aviation Authority (CAA) is fully equipped to support our vision for the future of aviation in New Zealand. The CAA plays a critical role in keeping our skies safe and secure, but it must also be a true partner to the industry – one that enables growth and supports innovation.
To that end, I recently announced a refresh of the CAA Board. This new leadership is dedicated to delivering better outcomes for the industry, including reducing processing times for certifications, particularly in the rapidly evolving area of emerging aviation technologies. These advancements are vital to the future of our sector, and we need a regulatory body that can keep pace with these developments.
At the same time, we are taking steps to ensure the financial sustainability of the CAA.
Today, the CAA is opening consultation on changes to its fees, levies, and charges.
These changes include a $2.34 increase to passenger safety levies, a $4.36 increase to the domestic passenger security levy, a $9.42 increase to the international passenger security levy, and a 47 per cent increase to other levies, fees, and charges.
While I fully recognise the essential role the CAA plays in maintaining the safety and security of our skies, I want to make one thing very clear – these proposed increases to fees, levies, and charged must be fully justified and paired with demonstrated accountability.
I am not yet convinced that such increases are fully justified.
That’s why, in response to the CAA’s recommendation for fee increases, I requested a detailed review of the evidence to support these changes.
It is imperative that we explore every possible avenue for cost savings and efficiencies before passing additional costs onto the industry and travellers.
However, it is also crucial that the CAA transitions away from relying on taxpayer-funded liquidity facilities.
Since 2020, the Crown has provided nearly half a billion dollars of funding to the CAA to maintain service levels, due to a sudden loss of revenue from passenger levies because of COVID-19 restrictions.
These levies haven’t changed since 2017 for the CAA and 2019 for AvSec, so let me be straightforward with you: there will be increases to these levies.
Inflation, changing security standards, and other cost pressures mean that an increase is now unavoidable.
But I’ve been clear to the CAA that these increases must meet two essential criteria:
- They must be proportionate and reasonable.
- They must deliver tangible results for both the sector and passengers.
As we move forward, I strongly encourage everyone in the aviation industry to participate in the consultation process. Your feedback will be invaluable in shaping the Government’s final decision.
Implementing the Civil Aviation Act 2023
As we ensure financial sustainability and accountability within the CAA, we’re also advancing key regulatory changes that will benefit the entire sector. I am pleased to see that work is progressing on implementing the new Civil Aviation Act 2023. This Act is essential to keeping pace with the rapidly changing aviation environment. It introduces important changes that will help the sector stay competitive while ensuring that our regulatory framework remains robust.
One of the key changes made to the Civil Aviation Act 2023 through its robust select committee process last year was the introduction of an independent review function, which will enable individuals and organisations to seek a review of decisions made by the Director of Civil Aviation.
This was a change that your industry asked for, and one that I was pleased to advocate for through the select committee process.
It enables a faster and more cost-effective alternative to going through the court, and it ensures that our regulatory processes are fair and transparent.
To ensure that we get these settings right, we are opening consultation on the scope of decisions made by the Director of Civil Aviation that can be subject to a new independent review process.
I want to be confident that the new independent review function is effective and timely, and I am keen to hear from you on what you anticipate being the likely areas of demand for reviews.
Exploring changes to the Aviation Security Services
However, though important, it’s not just cost efficiencies and savings we need to be focused on. As the saying goes, time is money, and many people’s time has been chewed up through an inefficient aviation security service.
Today I’m announcing that we are beginning a targeted consultation on the delivery of aviation security services in New Zealand.
It has become clear to me that AvSec is not operating as efficiently as it should.
For example, under current legislative settings, instead of outsourcing for staffing when a plane arrives at a smaller airport or outside normal hours, Avsec is required to set up full teams to do this service. This lack of flexibility is a significant issue, especially when it limits airlines and airports from establishing new flights at different hours.
We have also seen significant queues at our major airports with airports telling me that they want to have the option of being able to provide this service themselves and that they can do this more efficiently and cost effectively than it is currently done.
This consultation is just the first step in ensuring we have a more efficient aviation security service, that enables airlines and Kiwis to get where they want to go, quickly and safely.
Any potential changes will take time to implement.
Improving On-Time Performance
I am committed to improving transparency and performance reporting across the entire aviation sector, not just within the CAA. To that end, I’ve asked the Ministry of Transport to develop a monthly on-time performance report for airlines.
This report will provide valuable insights into on-time arrivals, departures, and cancellations, giving both the industry and New Zealanders a clear picture of how well our aviation services are performing.
Many other countries, including Australia, already publish similar reports, and it’s time we bring this level of transparency to New Zealand as well. The Ministry intends to publish the first performance report in early September.
In addition to this, officials are exploring options to introduce public reporting on airfares. This would further enhance transparency in the sector, empowering consumers with the information they need to make informed decisions and encouraging greater competition within the market.
Opening Markets and Embracing Emerging Technologies
I’ve talked quite a bit about improving efficiencies in our aviation sector, and I just want to touch on two things that are critical to enabling opportunities in the sector – air services agreements and emerging technologies, which we must embrace.
Tourism is New Zealand’s second largest export earner and enables economic growth. Key to supporting this growth is air services agreements, which facilitate international arrivals and enable New Zealanders to travel abroad.
My friend and colleague, the Honourable Matt Doocey, the Associate Minister of Transport, is doing an excellent job in leading these air services agreement negotiations, which are vital for strengthening our international connections, boosting tourism, and expanding trade opportunities that benefit all New Zealanders.
Emerging aviation technologies, such as drones, are set to revolutionise how we move people and freight. Our regulatory settings must keep pace with these developments, ensuring that we can maximise their benefits while managing associated risks. Another friend and colleague, the Honourable Judith Collins, the Minister of Space, is working on policy proposals to ensure that our regulatory system is fit for purpose, and we will have more to say on this in the coming months.
Conclusion
Aviation is continuously evolving, and the Government is committed to working in partnership with your sector to ensure that we are prepared for the future.
Together, we will address the challenges, seize the opportunities, and build an aviation sector that continues to be a pillar of New Zealand’s economy and a lifeline for our communities.
Events like this conference are crucial for sharing ideas, discussing challenges, and celebrating the incredible work that you all do. I look forward to continuing our work together to ensure that New Zealand’s aviation sector remains strong, innovative, and globally competitive.
Thank you, and I wish you all the best for the rest of the conference.
