A financial viability assessment (FVA) provides us with information about the financial position of your organisation.
There are 2 types of assessments:
- self-assessment
- CASA assessment.
Read below to decide which type of assessment you need.
CASA assessment
You will need an assessment by us for:
- initial issue of an air transport Air Operator's Certificate (AOC)
- adding scheduled services to your AOC for the first time
- initial issue of an AOC for passenger carrying turbine-engine aircraft
- adding your first passenger carrying turbine-engine aircraft to your existing AOC operations.
Once we receive your application, we will let you know what information we need for our assessment.
Applicant self-assessment
You can self-assess for initial issue or adding of a passenger carrying non-scheduled services AOC, except when using a passenger carrying turbine-engine aircraft.
You must submit your self-assessment with your AOC application.
There are 2 steps in the self-assessment process:
- prepare a 3-year cash flow forecast
- explain how any cash shortfalls will be covered.
The FVA Applicant Assessment Form (Form 064) is only a summary. You must provide a detailed cash flow forecast to identify operating costs.
You may already have a cash flow forecast prepared for business planning purposes or to support a loan application.
The cash flow forecast
The cash flow forecast must cover 3 years of operations. This is to identify the impact of longer-term operational items, such as loan repayments or engine overhauls.
The AOCM includes an example to help you identify and understand the requirements.
Safety benefits of a cash flow forecast
A cash flow forecast will give advanced warning of financial obligations that will impact your commercial operations.
Expenditure may be partly fixed and partly variable. Some expenditure items, such as fuel and maintenance, may reduce with reduced flying. Other expenditure items, such as loan repayments, rent and wages are relatively stable.
Operators may need to plan and program for significant cash outflows required to cover overhauls.
Most operators understand the flying hours or load factors needed to cover fixed costs. But, unexpected cash flow problems could affect safety. Safety is also at risk if there is no plan to cover known cash requirements.
It is important to manage these risks by preparing a cash flow forecast.