Media releases

Transcript - Monday 1 September 2008
Findings of the review of Qantas safety

Media release

SHANE CARMODY

Good afternoon ladies and gentlemen. My name is Shane Carmody. I am the Deputy CEO, Strategy and Support, of the Civil Aviation Safety Authority.

I have with me Mr Mick Quinn, who is the Deputy Chief Executive Officer Operations. We're here to talk to you today about the recent CASA audit into Qantas.

This recent audit was started by Mr Bruce Byron, the CEO of CASA. Regrettably Mr Byron can't be with us today. He's a victim of the flu. Many people around town are a victim of that at the moment, and he'd sound a bit like Donald Duck if he was up here with us today.

So, we thought that it was very important that the two of us came here today to be in front of you to talk about the results of the review; more important because Mr Quinn led the team that was responsible for the Qantas review.

So, without any further ado, I'll pass over to Mick.

MICK QUINN

Good afternoon everyone. Thanks very much. As you're aware, Shane mentioned that the call for this review was made on the 3rd of August. The audit itself kicked off onsite with Qantas on the 6th of August, and contained a team of specialists from CASA. [The audit has just recently concluded and] the audit report was delivered to Qantas this morning.

I think it's important to put a few key points out there on the table to start with. Firstly, we did not find any evidence that the recent spate of incidents, which was largely why the review was called, [indicates] any systemic failure. We believe these are random events, and the sort of events that would happen in any airline on any given day in any part of the world. We don't believe there were systemic issues linked or associated with these events, however, having said that, the event of Manila is considered to be an unusual event; an event that the ATSB is conducting a thorough investigation into. So having said that there are no systemic links between these incidents, I think it's important to also highlight what the review did find.

The review did find several aspects within the organisation that we believe require action, and these have been communicated to Qantas this morning. The particular issues are that of organisational functionality in the engineering and maintenance operation, and we believe that the organisation needs to thoroughly align accountability and responsibility to approve and control the engineering and maintenance program. So we're largely talking about management structure of engineering.

Secondly, during the review, we did a search of an extensive amount of data sets which were provided by Qantas. Some of these data sets, which are industry-wide accepted measures or indicators of technical health, showed adverse trends. And lastly, we've asked Qantas to provide us with a report as to what they're going to do about their processes and procedures, particularly in relation to implementing manufacturer bulletins and regulatory bulletins about airworthiness directives, and updating the maintenance programs of the aircraft.

So CASA has [identified] these three specific areas where we've recommended action to Qantas. As I said, there has been a discussion this morning with the Qantas executive about this. I'm pleased to say at this stage that the Qantas executive has indicated its complete cooperation with moving forward with this, and we look forward to working together on a plan to rectify these issues that we've identified.

I should add that CASA has also decided to take on two fairly significant programs as a result of this ourselves, which will result in two further audits - firstly, a review of the AD processes and how airworthiness directives are implemented in the organisation.

And secondly, a health check if you like, to guarantee our confidence and the confidence of the travelling public: a review of a 737, a 767 and a 747-400 certification process.

So we'll go from the documentation - as to how the maintenance program works on these aircraft, how it's being implemented, and how the documentation process exists in the organisation - to the nuts and bolts type aspect of actually reviewing the aircraft and going through the process of confirming that the programs that are directed in the documents are actually in place on the aircraft.

I think it's pleasing to say - and we're really focussed on the outcomes here - the most important thing is for the two organisations to work cooperatively to come up with the solution that we want, with the outcome we want. All throughout this process, the Qantas team has cooperated and aided the investigation process to get to where we are, to be able to identify the findings that we have, and to work cooperatively on the solutions.

So, on that, I'll open it to questions.

QUESTION

You say the [review] makes these recommendations about maintenance. How does that translate into safety? Has Qantas been less than competent with its safety standards?

MICK QUINN

Qantas is a safe airline, and CASA has no doubt about that. If it wasn't a safe airline, we'd be taking a lot more stringent action under our regulations to put it on the ground. So, having said that, it is a safe airline. These aspects of the maintenance program that we're talking about are indicators - in a very complex system - of aspects that need to be addressed. Are they directly related to safety? It's not pure science. I can't say that. But they are certain aspects that we think that they need to address, and they've agreed, as I said, with that, and are working towards a plan to put that in place.

QUESTION

What are the emerging problems then, that you refer to?

MICK QUINN

Well the emerging problems are, as I say, the trend information that was supplied by Qantas to us, indicating the technical health of the fleet. Some of these trends were probably exacerbated by the recent industrial activity, but I think it's important to add here that our analysis indicates that some of these have been trending before the industrial activity.

So, I think it's fair to say that we don't believe that these aspects are completely related to that. They certainly didn't help. And they've got a management, a rectification management program in place now, because there was a bit of a maintenance backlog as a result of that. But we believe that these trends existed before that activity.

In terms of the management structure of the organisation, it's not CASA’s business to tell Qantas how to manage its business. All we're doing is talking about the application of the business model they've put, and what outcomes that's providing. And at the moment, we believe that there are some potential areas where things might slip through the gaps, and they need to tighten up, as I said, the split of accountability and responsibility.

QUESTION

Has this got anything to do with company's cost-cutting over 10 years?

MICK QUINN

No, look, I don't believe so. In the aviation industry, every organisation has a completely different business model and applies it in different ways. As I said, it's not my business how they run their business. It's my business how they comply and what outcomes they provide. I think it's important to say that the industry is under enormous strain due to the increased fuel prices and Qantas is applying a business model currently that is compliant with our CASA regulations.

QUESTION

…there seem to be some similarities with what's happening with Qantas now and what we saw in the last 18 months of Ansett, with the maintenance problems that airline had. And you put it on the ground one Easter. Are we seeing the same sort of trends?

MICK QUINN

I don't think it's in anyone's interests to try and compare these two things. They're apples and oranges. Different set of circumstances here. And, as I said in the outset of this, if CASA had the sort of concerns it did about Ansett, we'd be putting it on the ground now.

We don't have those concerns. We believe that Qantas is a safe operation, and they're doing the right things and indicating all of the right things to CASA - as the regulator - that they're prepared to move forward to rectify these issues that we've identified.

QUESTION

When you talk about adverse trends you're seeing, in terms of maintenance… what specifically can you point to there?

MICK QUINN

We sourced a variety of data in this, and as you can probably appreciate, in any maintenance program as large and as complex as this, there's a lot of information, and there's a lot of different ways you can take that information. The information that we particularly related to, and we targeted, as a result of our own analysis and our own specialists, was based upon - I think the best way to put it, largely, without getting too technical - was about the technical health of the organisation, and the despatch reliability being one of them, of the organisation.

Now, don't get me wrong, despatch reliability - I'm not talking about punctuality, I'm talking about the technical aspect of the operation in terms of what delays this is causing the aircraft. It's got nothing to do with punctuality, in terms of the commercial sense. That is one area where Qantas sets its own targets. There are industry benchmarks there, and we believe they need to have a bit of a long hard look at how they're working towards improving those standards. These aren't bound by strict regulations. So there are no regulations that say you need to have a despatch reliability of a certain percentage.

The point that I'm making is this is just one of numerous indicators that give us a sense of the organisational health and how the organisation is coping, given the sort of stresses that we discussed before regarding cost cutting, etcetera. This is not unique to Qantas. It's something all world airlines are dealing with currently.

So the data sets were wide and varied. Some of them were specifically CASA-related data. We do require certain amounts of data. We delegate authority to employers of Qantas to act on our behalf within the organisation and, of course, we measure and are interested in how those delegations are being applied in the organisation. All of these - there's numerous sorts of data sets - all of these provide a picture that we're responding to.

QUESTION

[Inaudible]

MICK QUINN

The airline's currently operating below its own bench marks, but as I say does that mean it's unsafe? No, it doesn't. It just means there's a trend there that I think needs to be addressed.

QUESTION

Mick, when will your two additional audits be completed?

MICK QUINN

The second one - the recertification aspect - is a lengthy process. It could take potentially three weeks per aircraft, so we're talking several months.

The AD review is likely to take three weeks and we're in the scoping, planning and resourcing aspect of that now as to who, when, what. There have been discussions about that this morning with Qantas and they're, as I said, happy to cooperate and proceed and provide us with whatever we need to move forward.

QUESTION

Did Qantas accept your findings when you spoke to them this morning?

MICK QUINN

Well it wasn't me who spoke to them, it was one of my colleagues. But yes, I believe the message that I've got is that of cooperation, collaboration, move forward.

QUESTION

Was there any comparison between local and offshore maintenance, or [indistinct] off shore maintenance?

MICK QUINN

Offshore maintenance was something we did consider in the report only because I see it as part of the environment. I'm not saying it introduces risk, or it doesn't, it's just part of the operating environment. And it's something we did discuss. There was an incident not that long ago regarding maintenance of a Qantas 737 in Malaysia. I should add there that CASA actually issued some corrective action notices as a result of that. And again, they've been complied with. So is it associated, or related? There's no indicator to say that it is. And Qantas and CASA are taking a long view and a serious view as to how we, in the future, are going to look at monitoring, auditing and regulating approved off shore maintenance organisations acting on behalf of Qantas and the like.

QUESTION

[Inaudible question]

MICK QUINN

It is difficult to monitor and hence we're putting in a new regime, a new process at the moment as to how we're going to do it. Currently I believe offshore maintenance is probably something that's here to stay, not just for Qantas, but for the industry at large, particularly given the cost opportunities there.

I should add also that it's only a very small percentage of the maintenance that is actually done offshore. I think Qantas typically operates about 10 per cent of its maintenance off shore and it’s recently risen to less than 20, but it's not a major chunk of it. And it's something that CASA needs to have a long, hard look at.

We have audited all of the organisations offshore that Qantas use in the last 12 months and we're continuing to conduct not only random, not only planned audits now, but also putting in targeted operational surveillance when Qantas aircraft are actually in these maintenance hangers under maintenance offshore.

QUESTION

[Inaudible]

MICK QUINN

I'm not that up on the details of that. I was advised immediately by Qantas yesterday afternoon when that occurred. To me it looks like a system functioning the way it should function. What the failure mode is, I don't know, and that will come out in the investigation.

An engine shut-down on a four engine aircraft is not a really significant safety event. Qantas has a safety management system that is able to manage these sorts of things. The pilots are trained, of course, primarily in handling these sorts of emergencies such as Manila, a very unusual situation there.

So I'm not overly concerned about these sorts of things. I think I mentioned up front, to start with, that a lot of these events that are currently being really highlighted in the media, from an operational point of view, I see as noise in the system. They're things that happen in complex organisations like Qantas. They're things that happen to other airlines all around the world. So there is an investigation going on into that, into the engine vibration, shut down and the appropriate management of the event. But I'm not particularly concerned about it now.

QUESTION

Just to go back a little bit, [indistinct] look at more [indistinct] in layman terms about the maintenance improvements that need to be made. It's not that the planes are now sort of less maintained? Is it more the management within Qantas, or is it actually the hands-on, how the planes are being treated [indistinct] health check on them?

MICK QUINN

No, no, they're not being maintained to a lesser standard and I think Qantas would be the first people to tell you that. The standards are the same. The maintenance of an aircraft is a complex matter. It's not like your vehicle at 20,000 kilometres, it requires a check. This is a complex area considering the components: rivets onboard the aircraft that all have specific requirements for life-cycle and maintenance, the air frame itself, as the industry grows. They learn more about how to improve things, so there's constant improvements being made to the aircraft. So an aircraft, in its initial form, as it's born, is a very different beast later in life, due to all these modification programs.

One of the complexities that's added too, is to understand how the organisation is going to plan, schedule, conduct all of these activities, given the challenging environment. And as I said during the recent industrial activity, they had robust processes and procedures in place that I was very satisfied with and briefed on every day, as to how they were managing this.

There are various tools that can be used to apply the maintenance program. And I mentioned delegations before. I'm sorry if I'm getting into this sort of more regulatory technical area again, but Qantas employers have delegations that they can utilise to maintain the aircraft to whatever the regime is. They can extend that regime. It’s not illegal. It doesn't mean it's unsafe. But they can manipulate the maintenance program.

What we are trying to get a grip on with the structure of the organisation is who exactly has the authority for that, who actually has the accountability for that, and who’s responsible for doing it. Qantas has a segmented business level. Qantas Airways and Qantas Engineering are two separate companies. They have a service level agreement between the two and it's that alignment, or that required overlap that we want to see. That's important to what we're looking at.

So they're not being maintained to a lesser standard. The standard's the same. It's just the application of the model and that's particularly relevant from the way the organisation's structured.

QUESTION

With the ATSB investigation, the preliminary report that's just come out, investigators have said that they can't rule out similar events such as Manila occurring in the future. Is this directly linked to this maintenance being done offshore would you say?

MICK QUINN

This is the Manila incident?

QUESTION

Yeah.

MICK QUINN

No. Well to the best of my knowledge, not at all. I think I need to put in context [the fact that] this incident in Manila is an extremely unusual event. I'm not aware - and nor are Boeing - of any similar type of event. So it is a one-off event. However, could it happen again? Well, I'm not a statistician, but it probably could, but the chances of that happening are extremely unlikely, given the reliability of these aircraft, given their proven track record, particularly of the 747-400. It's an aircraft that's been around for 20-plus years with hundreds of millions of cycles and operations, with no indication of an event like this.

So it is an event that the ATSB needs to conduct a thorough investigation on and I believe they are. And we have confidence in that process. Is it linked to offshore maintenance? I'm not aware of any link there whatsoever at this stage. It’s still early days in the investigation. It will be a long investigation.

QUESTION

Has CASA actually said anything more in terms of just getting the bench marks sort of up to standard?

MICK QUINN

Like all these activities, the first part of what we do is just linked around getting cooperation, getting understanding for the process. Now that we've locked that down today, we'll move forward and I'll be writing to the Qantas executive to confirm the arrangements and confirm the specific deadlines that we'll be looking at.

But I would just like reiterate that it doesn't necessarily mean that the organisation’s unsafe. These are improvements that we would like to see. So we'll be working with deadlines for implementation of these and I believe Qantas is actually already actively working on them. All right. Thank you.