New Zealand: Up in the air? Possible changes to regulation of civil aviation and airports

Last Updated: 17 August 2014

A wide range of changes are being considered for the civil aviation sector and airports under two different reviews currently underway.

Review of the Civil Aviation Act and Airport Authorities Act

The Civil Aviation Authority (CAA) may have a greater role in rule-making, as a result of the review of the Civil Aviation Act, see here. The review by the Ministry of Transport is considering whether to give the CAA the power to make temporary rules, allow the Minister to delegate some rule-making powers, or give the CAA power to make standards or some other additional regulations to the rules. These are all possible alternatives to the current system, under which all rules are made by the Minister.

The proposals are aimed at addressing concern that rules can take too long to make, which can impact on safety, increase costs unnecessarily and result in out of date rules. However, the review recognises that recent changes have been made to the existing rule-making process, and that an option is to wait for these changes to embed, before making further changes. The review identifies risks in all the change options, particularly from the uncertainty in defining the relative powers of the Minister and the CAA in all the new options.

There is an argument for completely devolving rule-making to the CAA, on the basis that aviation regulation is highly technical and requires a high level of expertise. The review notes these points, but says that such a move is outside the scope of the review. It would be a significant change to move the rule-making power to the CAA, considerably changing the nature and scope of the review and requiring significantly more analysis and consultation.

Changes to safety regulation

Other changes to the Civil Aviation Act under consideration include changes to the structure (including amalgamating it with the Airport Authorities Act introducing a purpose statement, adding objectives to guide the Secretary of Transport and amending the objectives on the Minister and the CAA. Small changes to the functions of the CAA and the independent functions of the Director of Civil Aviation and changes to the fit and proper test for persons to enter the civil aviation system (eg as an operator or a pilot) are also on the table.

Airline licensing and competition

Another interesting area of the review is airline licensing and competition. Possible changes include streamlining the authorisation of international services and changes to the decision-making framework on alliance, code-sharing and similar arrangements. One of the options considered is to give the Commerce Commission the power to approve alliance and code-sharing arrangements, in addition to any consideration required under the Commerce Act.

Regulation of airports

The review is also looking at the Airport Authorities Act. Issues under consideration include whether to change the definition of specified airport companies and the thresholds for consultation on capital expenditure. These proposals affect the scope of the regulation under the Airport Authorities Act, and could end up bringing more airports into the consultation and information disclosure regimes under that Act.

The most significant changes for airports, however, are likely to come from another source. The Government is to respond later this year to the Commerce Commission's review over the last couple of years of the effectiveness of information disclosure on Auckland, Wellington and Christchurch airports.To assist, the Ministry of Business, Innovation and Employment (MBIE) released a consultation paper on that information disclosure regime on 1 August see here. While aimed at the major airports, this work will consider the relationship between the Airport Authorities Act and the Commerce Act, which could affect all airports.

Deadlines for submissions

The deadline for submissions on the review of the Civil Aviation Act and the Airport Authorities Act is 31 October 2014. Submissions on MBIE's information disclosure paper are due by 28 November 2014.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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