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Mick Toller interview on Business Sunday

Jim Waley

There are a lot of answers needed from Ansett and its owner Air New Zealand. But so far, they've been silenced on many of the questions raised by CASA unprecedented decision to ground ten Boeing 767s, a move towards asking Ansett to justify why it should be allowed to continue operating. Those planes are still grounded today, and will remain so, until the safety problems are repaired and checked. A process that could take at least three weeks. But, from this Friday, Ansett will have fourteen days to show CASA why its license to continue operating should not be withdrawn. CASA Chief, Mick Toller, joins us in Canberra this morning and is talking with Ally Moore.

Ally Moore

Thanks, Jim. Good morning Mr Toller.

Mick Toller

Good morning Ally.

Ally Moore

Well, Ansett says it hopes to get the first of those grounded 767s back in the air tomorrow. Will that happen?

Mick Toller

I think that, it's very difficult to give actual times and to see (inaudible) we're certainly working as hard as we can as an authority. Clearly we've got to be satisfied. We've set an agenda, we've said we're not sure that the maintenance that was required to be done on those aircraft has all been done and we're also saying we're not sure in some cases it's been done to the right standard. To satisfy ourselves to that is an important task. I'm certainly not putting any pressure at all on my inspectors to say it must be done in such and such a time. Obviously from everybody's point of view the quicker it is done the better but the most important thing is that it's done properly.

Ally Moore

While we've just 24 hours to go, we'd have to assume that you won't have one aircraft at least back in the air tomorrow.

Mick Toller

As I say, our people are working flat out in Melbourne. A lot of this is a paper chase. A lot of the problems that we have seen have arisen out of problems with the paperwork on the aircraft. We've drafted in people from all over the country to help us with this task. We're not slacking on it, but we're not equally prepared to say, yes, it will be done by such and such a time. If it can be done by tomorrow, we'll be delighted, as obviously will be Ansett and its customers.

Ally Moore

Ansett has suspended some maintenance and engineering workers but CASA is quoting ongoing management problems. How far up the management ladder do those problems go?

Mick Toller

Well, I think that there is a requirement under Section 28 of the Civil Aviation Act that says there must be a proper management structure. That's pretty normal. There's also a due care and diligence requirement on the directors. At the end of the day, when an airline comes into this sort of trouble, same as if any business were in this sort of trouble, then it's not a question just of sacking the people on the shop floor, you've got to look systemically right through that organisation. We can't give those answers to Ansett but there've got to be answers given.

Ally Moore

At the same time Ansett says that the management team it appointed at the end of last year was approved by CASA.

Mick Toller

Yeah, we approved the management structure, we approved the personnel in the most general sense..

Ally Moore

So you didn't actually say yes he's the right man for that job and so on.

Mick Toller

No, It goes back to the fundamentals of the issue of who runs the business. It can't be the government regulator that turns around and says you must have this structure and you must have these people within that structure. Every business has to make those decisions, Ansett made certain decisions, they have been through an issue, a period of turmoil, there's no question of that. They have been without a chief executive for a long time period of time. That puts great stresses on the organisation. A lot of the people who were the old Ansett management, and therefore with all the corporate knowledge, left when Air New Zealand took over. We are now seeing more changes with a new chief executive, it's those instabilities that have got to be resolved. They are partly about structure, they are partly about people but the answers can't be from us.

Ally Moore

Well, given the level of your concern and the fact that you did approve the structure, previously, this time around, will you actually get to people?

Mick Toller

Individually and personally, no we can't, I would be surprised though if in the proposals that are put to us over the next few weeks there weren't people changes at some fairly senior positions within Ansett.

Ally Moore

When you say senior, at the very top?

Mick Toller

That's not for me to comment on. As I say the onus is on Ansett as the business to come to us with the proposals, and we'll look at those proposals, and we'll look at them very, very seriously and say do we believe that what you're saying and the actions that you're taking will actually resolve the problems that we've seen.

Ally Moore

Ansett chief executive, Gary Toomey, says it's best if he stays in New Zealand to resolve this crisis. Does the company have an effective leadership team here in Australia?

Mick Toller

It's a very difficult company to be running, obviously, in terms of it being a joint New Zealand-Australia company, New Zealand ownership, board members in New Zealand, chief executive who's responsible for things at both ends. In terms of what's happening in Australia at the moment, obviously, there are people out there from the technical side who are leading and who have got a lot of responsibility and are certainly not having a quiet Easter.

Ally Moore

Are you happy with that, are you happy with the level of management response you are getting as the regulator?

Mick Toller

We've got certain issues in a few areas, but overall, we are able to contact the people we need to contact at the times we need to contact them. I was having discussions at a senior level with Ansett over quality management last night. We resolved some of those problems that we see coming up at the process goes through. Yeah, I think we have the right communication levels, at the moment. In terms of whether it's the right command and control within Ansett, that's Ansett's responsibility.

Ally Moore

Have the spot checks you are now conducting on other aircraft in the Ansett fleet turned anything up?

Mick Toller

No, they haven't to date. Obviously if they did then I think it's fair to say that would be very public immediately. It's very hard to, and it's quite right that everything should be open in this current situation. We had a difficult decision to make on Thursday in terms of really, not whether we took action, but whether we grounded just the 767s or that we grounded the whole of Ansett. Having decided, and I think absolutely correctly, that we would just act on the 767s, prudence dictates that we also keep a close eye on the other aircraft to make sure our judgement was correct on Thursday.

Ally Moore

Indeed, if you're talking systemic problems with Ansett's maintenance system you could question couldn't you whether spot checks are in fact sufficient?

Mick Toller

Yes, and it's a question of what tools have you got in your workshop. We did say there is a systemic problem. All the evidence of that problem though was coming out on the 767 fleet, which is why we took action against the 767. We didn't have anything that said here is a problem with the 737 or here is a problem with the Airbus A320 and therefore, it was impossible, and, and it would have been quite inappropriate to have taken action in that area. But, I still think its right that we do anything that we can to look at the system as it exists today.

Ally Moore

Two days before you pulled the 767s you actually did say that you felt Ansett now had the right system in place to understand the problems. Now if your view can change that quickly on the basis of evidence put to you, how can passengers be confident that Qantas, that Virgin Blue, that Impulse doesn't have other problems that you just haven't found, yet?

Mick Toller

That's the conundrum of being the regulator, of course. There's a saying about being the regulator that you're damned if you do and damned if you don't. You are never going to know everything that's going on within an industry. That's completely impossible. We have put Virgin Blue and Impulse through a very vigorous process in the last year in terms of joining the industry. That's the barrier of entry which is probably the toughest that can be faced.

Ally Moore

But, it's the ongoing flying isn't it that we are talking about?

Mick Toller

Well, I think we are talking systemic, in fact, in this case. In terms of what's happening on a day-to-day basis, I have no concerns that Ansett, are trying their best that the management system is not supporting some of the workers who are out there, the pilots and the maintenance engineers. We've done a lot of work with Qantas we've done a lot of work with Virgin and Impulse over the last twelve months, looking at these systemic issues. Virgin Blue was a classic example where their entry into the market was delayed on exactly these sorts of issues.

Ally Moore

Will financial viability be a factor in your decision on whether Ansett can continue to operate?

Mick Toller

Financial liability is one thing I am required to consider. That's in the Civil Aviation Act. It's a very difficult one to know, but what we are trying to make sure is that if there are financial problems in any company within the aviation industry, they aren't taken out of the safety budget. So, what we are looking to ensure is that there is no cutback on money spent on maintenance, or on the training that's given to engineers. Now, where the bottom line of that is, is the difficult decision. I don't think there are any right answers again, you know it's something that is to a certain extent a judgement call but it is something that we are required to take into consideration.

Ally Moore

Well, at this point does Ansett have the money that it needs to do what you're requiring?

Mick Toller

Well, I think the answer to that is that I don't know and I'm not sure that I'm actually, at this stage, in the position to judge. I think it's obvious that capital investment in Ansett is required. They've been saying that for some time, right back to the days of Rod Eddington as chief executive. There is an understanding that they were having a fleet renewal problem. They've got numbers of different types of aircraft, they've got very old 767s, the oldest 767s in the world and, at some stage you've got to do a complete fleet renewal program. That takes billions.

Ally Moore

Mr Toller if you don't get what you need from Ansett, how far are you prepared to go?

Mick Toller

Well, my job is to take the ultimate decision on safety grounds.

Ally Moore

And, do you have full Federal Government support to put Ansett out of business if that's what's needed?

Mick Toller

I have total support, I've been delighted with the support I've been given by my minister who has basically condoned and backed and supported throughout. He has told us to be fearless. We will be fearless, we obviously will only make that decision on totally valid safety grounds. This is a safety decision obviously not a business decision but if it needs to be done we will do it.

Ally Moore

Mr Toller, thank you very much for joining us.

Mick Toller

Thanks, Ally.

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