Office move doesn’t help CAA funding shortfall
September 25th, 2009
The Civil Aviation Authority’s decision to move from industrial Petone to downtown Wellington, opposite Parliament, is exacerbating the airline safety agency’s efforts to trade within its means. Transport Minister Steven Joyce says the cost of the move, slated at $8.5m, “has an impact on their cost structure.” Joyce tried to halt the shift, which was approved by the Labour Govt, but as he says, “the die was cast.”
Based on CAA’s statement of intent through until 2012, the organisation is heading for a $4.5m deficit in the 12 months through to June 2010. Joyce says a review of CAA funding will be out for consultation early next year. $3.5m of CAA’s revenue shortfall stems from the arrival of Jetstar in place of Qantas’s domestic service. Jetstar is classified as an Aust operator, not liable to pay passenger safety levies. The CAA wants to make up some of the shortfall by imposing a new operator’s passenger safety levy to recover costs from the likes of Jetstar. Joyce says the CAA is shortly to seek his approval for changes to address the “mismatch.”
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The CAA has embarked on a process of tightening its cost structure since the fall-out from the move, putting as cap on hiring, reducing training programmes and halting sponsorships. It says cash reserves will have dwindled by mid-2010 to the point where any further disruptions to funding could squeeze its core operating funding.
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