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Press conference on grounding of Ansett 767 aircraft

MICK TOLLER:

Okay. I think you are aware that Ansett yesterday grounded three aircraft which they'd found defects on the pylons which connect the engine to the wing. Last night we grounded four other aircraft pending the tests that had to be done on them. Those tests have now been carried out on those four aircraft and they have been cleared. So the situation as I understand it at this stage is that there are three aircraft grounded, the same three aircraft that were grounded as of last night. The repair requires new parts basically and it will be completed on the three aircraft we anticipate by early next week at the latest, but possibly earlier. Ansett are working to a schedule where they hope to have one back in the air tomorrow, one on Friday and one on Sunday. So that gives you some idea of the sort of disruption that they're facing through the Easter period.

These cracks were found as a result of a service bulletin which is like a service recommendation if you like put out by Boeing to look at that particular area and applied to all the first 101 aircraft built. So that's really the very old aircraft and the majority of the Ansett 767 fleet are old aircraft and they go back to 1983 and they're part of the first aircraft built and the first aircraft ordered. The cracks that were found are serious and that's why we grounded the aircraft. Pylon problems have been significant in the past. I think probably the biggest one that really we've had is the crash of the (inaudible) .. if you remember at Amsterdam into a block of flats which killed something like - I can't remember now but some 90 or so people on the ground when that aircraft crashed into a block of flats. That was a pylon failure which required an enormous amount of work to be done on the pylons on 747s after that. So that's the history of why pylons are important and why we take them seriously.

What we're asking now as the authority is what has this got to do with what happened at Christmas with the (inaudible) . grounding of the same 767s at that time. I think it's worth saying that since Christmas there's been a lot of focus within Ansett on means to ensure that the sort of occurrence that happened then didn't happen again. I think you can turn around and say that it has. I think we have to accept the fact that to change the organisation, to change the processes takes time. We're comfortable with a lot of the changes that Ansett did make. We believe that there are other changes that do need to be made and we will be talking to Ansett about those changes in the very near future and we have an indication that they accept our point of view and that they will be making those changes. They're changes to structure and they're changes to process. They're about how they do the work, who within the organisation does the work - and this gets more complicated of course since Ansett and Air New Zealand joined together and we have to look at a very complex organisation now which is partly based in New Zealand and partly based in Australia. We can't allow that to divert us from the main focus of ensuring the safety and all the maintenance procedures are being undertaken.

I think the other thing that comes out of this is the question of Boeing's part in it. Boeing are the manufacturer, Boeing are the expert, Boeing are the people who recommend what the service procedures should be. We will be asking both Boeing and the FAA, our equivalent in the States, as to whether the service bulletin that was put out was adequate in view of the fact that cracks were found on three aircraft. We have now made that an airworthiness directive which is the level at which it becomes mandatory, the level at which everybody has to do it and has to comply. We would anticipate, having put our airworthiness directive out that other authorities with aircraft of that age will follow suit. But that is of course up to each individual country to make their decision. But we would anticipate that once we have said "Hey, we found cracks in aircraft this old. This is serious, this inspection shouldn't be something that is effectively voluntary, it's something that should be mandatory." That's the case in Australia, we believe it should be the case in the rest of the world. We'll also be asking Boeing as to whether they gave the whole area enough serious concern by just putting out a service recommendation as opposed to making it a requirement earlier. So those are the lines that we are taking at the moment and happy to take questions.

QUESTION:

Mr Toller, does the grounding of planes last night indicate that the warnings that should have been apparent at Christmas time haven't been heeded and that some stronger action needs to be taken against Ansett?

MICK TOLLER:

The groundings last night are relevant to a particular requirement of Boeing. Ansett were within the timeframe that they had allowed them and therefore they were doing their checks within an agreed timeframe with the manufacturer. So as such I think that we have to recognise the fact that to a large extent Ansett were doing what had been agreed that they could do.

QUESTION:

(inaudible) ..

MICK TOLLER:

I see that that may well be the case in this particular - if Boeing turned around and said "Yes, it's all right for you to do these checks up until the end of April" then you can't point a finger at Ansett when they are doing them within that timeframe. So the question now that I think needs to be asked of Boeing is was that an adequate timeframe?

QUESTION:

But should the airline consider that April also is Easter, the second busiest travelling time, perhaps they should have (inaudible) .. earlier?

MICK TOLLER:

You would think that that would be part of their concerns, yes. When there are commercial considerations as well as safety considerations we look at the safety considerations; they have to take into account all the commercial factors.

QUESTION:

Shouldn't Ansett's own checks have detected any cracks independent of advisories from Boeing?

MICK TOLLER:

An aeroplane is a very complex structure and you need to know where to look and how to look. These particular tests are not done with (inaudible) .. so a bit - you could call them equivalent to an x-ray if you like but it's not a visual inspection, it's not looking at the aircraft. It's quite a complex test that has to be done. The manufacturers are the people who understand the aeroplane; they've been with it from it's first design, they know where the strengths and weaknesses are within any design and there will always be strengths and weaknesses in a design, and they know from experience, from testing of aeroplanes to destruction just where the weak spots are likely to develop and therefore that's why they say, "Go and look at this at such and such a time." We believe having found three cracks, cracks on three different aircraft of this particular age that maybe the problem is more serious than Boeing had realised.

QUESTION:

After the Christmas grounding CASA was critical - was highly critical of the management structure of Ansett. You seemed to have backed away from that saying that, you know, you understand and are sympathetic of the bureaucratic structure they now face with their merger with Air New Zealand. What's the change? Why are you (inaudible) ..

MICK TOLLER:

They have made changes to the management structure which we believe are the right changes. They've put in place significant, particularly quality management type structure, if you like, their own independent regulator within the authority. They reacted very strongly and very well to the criticism that we gave them at Christmas. I mentioned the New Zealand aspect because this is an extra layer that makes the whole issues of Ansett much more complex than dealing with somebody like Qantas or any other sort of standard Australian airline.

QUESTION:

But surely an issue of bureaucracy and saying it will take time is not going to wash with the air travelling public who - you know, they don't care. They want air safety to be the priority. Bureaucracy is a side issue.

MICK TOLLER:

Yes, this isn't a question of bureaucracy, it's a question how you do your day to day management of the airline. If there were any question that safety was compromised in any way whatsoever, I would have closed Ansett down last night. There's no question of that whatsoever. This is an issue of a particular technical issue on a particular type of aircraft. We don't believe that the Ansett system that existed last year had the capability to understand the magnitude of these problems and to act accordingly. We believe they've now put in place that sort of system. They've got some catch up to do though and that's what's going on at the moment.

QUESTION:

Could these similar problems arise with other airlines, with Qantas or with somebody else (inaudible) .., have they got planes that could have potential (inaudible) ..

MICK TOLLER:

The only aircraft that are affected in Australia are the old, the original 767s of Ansett. Qantas also have 767s. There is a service recommendation on those but it's at a totally different timeframe from the ones that we inspected over the last few days.

QUESTION:

Can you give me some more detail about exactly what you're critical of in terms of Boeing? I mean, you are taking them to task as I understand it?

MICK TOLLER:

Well, we're going to have discussions with Boeing as to the process by which they turn around and say how serious a particular problem is. The system that exists is one that the manufacturer recommends a maintenance schedule and they recommend certain other things that need to be done as part of the servicing of an aircraft. And that's totally appropriate. That's like saying the people who tell you what you should be doing to your car is Ford or Holden or anything like that. On top of that you've got a layer of matters which are of significant safety concern so become better known as airworthiness directives and they're mandatory. They're normally put out by the FAA in the States because it's an American aeroplane built by Boeing. What we're saying is that in this particular case did Boeing realise adequately how serious the potential for the cracks was in this area. They obviously knew there was a potential or they wouldn't have called the service bulletin, but did they realise that if you find three in the first three aircraft you inspect, this is a much more serious problem than I think is recognised by the manufacturer. And therefore it should probably be an airworthiness directive, it should have been something that people have been told to do rather than recommended to do.

QUESTION:

Are there cracks in other aircraft overseas that you are aware of or are these actually the first three that have cracks that have been discovered?

MICK TOLLER:

These are the first three that we are aware of at this stage. As I say, we have now told people that we're grounding the aircraft until the tests have been done. We don't know that other airlines, whether other airlines have done those tests or not, but if they have they certainly haven't found any cracks or we would have heard about it.

QUESTION:

Can you explain where the cracks are exactly on the aircraft and what it looks like?

MICK TOLLER:

Looks like, no, because it's not something that can be seen, in fact I'm certain it cannot be seen, so they are internal to the structure of the metal. The term metal fatigue is used and it's probably not totally inappropriate, but cracks inside the metal which propagate quite quickly and have the potential to become sort of serious (inaudible) (inaudible)

QUESTION:

Where are these three cracks on (inaudible) ..

MICK TOLLER:

The cracks are on the pylon. Now, the pylon is the part that sort of hangs below the wing and then the engine sits underneath the pylon. So the engine is attached to the bottom of the pylon and the top of the pylon is attached to the wing. Obviously a lot of thrust comes out of these engines on take-off. There's a lot of stress on this part of the structure and (inaudible) .. that's recognised, it's recognised in the design and it's always - it's a fairly beefy design. So it's within the area where it's attached to the wing that these cracks actually start.

QUESTION:

So in the (inaudible) .. how serious is this?

MICK TOLLER:

I think this is a serious fault which is why it is important that the aircraft were grounded immediately and it's important that the parts be replaced rather than sort of the standard sort of repair which can be done on cracks where there isn't a strong structural load.

QUESTION:

Are you disappointed that just over three months after (inaudible) .. Christmas that where you might have thought this was all put to bed that suddenly it's come back to haunt at an inconvenient time?

MICK TOLLER:

I mean, aviation is like that. Things always happen at the worst possible time. I've been in aviation all my life and I know to expect that just when you think things are going to go well they are going to go badly. It's a very complex matter, an aeroplane is always going to give you problems somewhere sometime. Airlines always expect the worst to happen at their busiest time, it's just one of those (inaudible) .. that happens.

QUESTION:

If this happened at Ansett and also at Boeing that this has been less than (inaudible) ..

MICK TOLLER:

I'm not - what I'd say is that I'm glad that the cracks were discovered when they were discovered; I'm glad that the correct action is being taken. The system effectively is working. I'm surprised that we found cracks on three aircraft and that's the bit that makes me wonder whether the original recommendations were adequate.

QUESTION:

How soon after the cracks were found were you informed of it by Ansett? Are you happy with the timing of you actually finding out about this?

MICK TOLLER:

Ansett were in contact with the local Melbourne office which is the correct process. We have a thing called a major defect report and any time anything of this nature is found then the requirement is to put in a major defect report to the authority so that the correct action can be taken. We believe that Ansett have acted very responsibly in this case. They did tell us about it and they did voluntarily ground the three aircraft where the cracks were found. So yes, I believe that they have acted sensibly and responsibly.

QUESTION:

And you say if this was a matter of air safety Ansett would have been shut down automatically. A lot of the smaller airlines will be raising their eyebrows about the fact that Ansett is still allowed to fly when if something of this nature were to occur in some of the smaller airlines, the criticism is that they would be treated much differently. What do you respond to that?

MICK TOLLER:

I have always said, and I will say it again, that we treat Ansett and Qantas and Impulse and Virgin Blue exactly the same as we treat the small carriers. If one of the small carriers had been found not to have been doing something that was only recommended no action would be taken against them. We would be working more with them than against them if you like. If either Ansett or a small carrier had failed to do something that they were required to do, then that's a totally different matter and both would have felt the stronger hand that is required in those circumstances.

QUESTION:

The public does, you know, really they have doubts about the safety of Ansett, it has been through so much in recent months. Is there an end in sight for Ansett? How confident are you that this management chain is on the right track and how much longer do we need to see you say, you know, "We're happy, we're happy, it's a totally different (inaudible) .."

MICK TOLLER:

Well, there is a bottom line and that is absolute safety. On top of that we look for a higher standard. Now, how much higher that standard is above the minimum - we set the regulations and the regulations are a minimum. We anticipate, we always hope that people will work well above that standard. We want them to work above it. Some people don't.

QUESTION:

Are they still below the minimum?

MICK TOLLER:

Nobody is below the minimum. If they were below the minimum they would not be flying. I think that's a very important point. If they were not doing the required minimum amount of maintenance - any airline, be it Ansett or the smaller airline would be closed down immediately.

QUESTION:

Are you going to give Ansett a deadline here? It seems as though you're happy to let to go and say we'll give you time, it takes time. I mean, when does that time run out?

MICK TOLLER:

I think that's a fairly fair point. We haven't actually stated that, you know, we want to see such and such on such and such date. What we will be saying to Ansett in the next few days is that on top of what's been done already, we believe there's still a weakness here which needs to be fixed and we will put a time on that. And that's how they change their structure and their reporting lines.

QUESTION:

So what sort of time are you going to give them?

MICK TOLLER:

We would expect that within the next three months. Then if they can't come back to us at the end of three months and say everything that we've recognised that needed to be done as a result of both the Christmas and the Easter problems has been done, then we will be having some very serious talks with them.

QUESTION:

And what would that result in? I mean, if they don't meet that deadline, what would be the punitive action to be taken against them?

MICK TOLLER:

That's a very difficult hypothetical because it depends to what extent they're not meeting that deadline. I mean, are they desperately trying to do it but have failed because they've just run out of time or are they (inaudible) .. totally in which case we'd have a different reaction. I'm pretty confident in saying that having spoken to (inaudible) .. this morning who is their chief executive and to their head of operations that they recognise the problem, they recognise the seriousness of the problem. They are as keen as we are to make sure that the solution is the right solution. Airlines depend on reputation and this is doing Ansett's reputation no good.

QUESTION:

Can you tell us more about the structural weaknesses you're talking about? Is it problems with maintenance schedules or is there a bureaucratic problem or what sort of changes are you going to - - -

MICK TOLLER:

They're actually changes that we put in a number of areas. They're partly about who actually does the work, and that's important, and they're partly about how are the internal processes being set up to make sure that everything that needs to be done is done. The people that are now being brought on to form a new division within Ansett that have strong regulatory background, they've got the same sort of background that I've got, that understand the issues and they've effectively been put on as independent policemen within the organisation to say to the Ansett boss this isn't happening the way it should happen. Now, that's a very very strong position. It's almost a model position, if you like, for an airline. It's one that we endorse and encourage. It's dependent on having the right people involved, and we believe they've got the right people involved. That's always a difficulty, finding the right people.

QUESTION:

They need to tighten up even more.

MICK TOLLER:

No, they need to allow it to get through all the work that is being done. The irony of this is that, speaking to the person who heads that division this morning, he was saying to me that only - they had planned for two weeks time a totally independent review to ensure that all the service requirements that the manufacturers recommend are being done. And they were going to do it by not going through the Ansett systems but by going to the manufacturers themselves. If they'd started that a month ago, you know, we'd probably have found out about this one a little earlier. But as I say, the important thing is that they are not in contravention of anything. They are doing a recommended service procedure within the time that's been accepted by the manufacturer. And having done that, they've found a serious problem and this is what we've reacted to is the serious problem.

QUESTION:

But wouldn't an airline with commercial considerations do this two week review a month ago? I mean, you don't get your car serviced when you drive away for Easter on Easter Sunday, you get it done before you actually go and they've done exactly the same thing.

MICK TOLLER:

I mean, I can't answer that for Ansett. I mean, that's an issue of Ansett priorities. I'm not an Ansett spokesman and (inaudible) (inaudible) an Ansett spokesman I'd be able to answer it.

QUESTION:

Would you (inaudible) .. getting on an Ansett 767 over Easter?

MICK TOLLER:

I would indeed, yes.

QUESTION:

No concerns at all?

MICK TOLLER:

No concerns at all.

QUESTION:

The issue of the age of the aircraft seems fairly critical. As a regulator, is there a point at which you would say to an airline it's time you start trading in 1983 planes that are in high service?

MICK TOLLER:

Ageing aircraft is a big issue worldwide. You can't actually turn around and say this aircraft is unsafe because it's old. It depends on how much maintenance it's had over its career and what maintenance it's getting now. The problem for airlines is that as aeroplanes get old they get very very expensive to maintain. And there was a cutover point at which it becomes much cheaper to be flying new aircraft than it is pushing around old aircraft. And for this reason all the major airlines tend to roll their fleet over between 10 and 20 years is probably the average.

QUESTION:

So is it your expectation that Ansett is probably working on some plan to move on from these some time soon?

MICK TOLLER:

I'm sure there are.

QUESTION:

Are you happy to leave that choice with the airlines though? Is it something that perhaps CASA should be looking at?

MICK TOLLER:

No, we're not a commercial regulator. We cannot tell - - -

QUESTION:

You're a safety regulator.

MICK TOLLER:

We're a safety regulator. We can ensure that the aircraft that they do fly are safe and if that requires an enormous amount of maintenance and that they be grounded from time to time, that's our role. I would have thought that from an airline point of view that's not good for the airline and so they'd be looking at - and I'm sure that Ansett are looking at getting new equipment, new shiny new aircraft which the customers are happy to be flying on and want to be flying on.

QUESTION:

Sorry, just back to your minimum point. You say that Ansett is fulfilling the absolute minimum of safety requirements. Where does that fit in around you - - -

MICK TOLLER:

No, I think Ansett have a very good approach to safety and have had all along, however we have discovered weaknesses within that approach. In other words, overall they've got a very strong approach to safety and are very safety conscious and always have been. They've got a great history as an airline. What we're seeing now is weaknesses in a particular area and the area we found at Christmas was to a large extent an internal one, it was to do with the people and the way that they dealt with information that was coming to the organisations. This I think is merely one of the fact, just purely the fact they're flying old aeroplanes and it hurts at times.

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