Senate Rural and Regional Affairs and Transport Legislation Committee [Part 2], , 2:41:12 to 2:58:38
Examination of CASA's oversight of Nauru Airlines, focusing on financial solvency, safety reporting, and regulatory compliance at Nauru International Airport.
Topics: Public safety, Procurement
Speakers: Speaker 9, Matt Bouttell, Ms Pip Spence, Unknown Speaker, Senator Glenn Sterle, Interjection, Senator Susan McDonald
Please. Okay. I welcome officers from CASA and I'll just I will give you the opportunity, Ms. Spence. Do you want to make a very, very brief opening statement? >> Thanks very much. Senator Shoebridge.
>> Um oh, thanks, Chair, and and nice to see you all. Um [clears throat] Um what barriers are there for airlines operating while insolvent? I would imagine there would be significant barriers because they need to have the capacity to meet maintenance and outgoings in order for safety. Are there express prohibitions about airlines operating while insolvent?
>> Um Senator, I might ask um my colleague, Matt Pitel, to from our regulatory oversight division to respond to that.
>> Thanks, Senator. Matthew Pitel, executive manager, regulatory oversight. So, yes, there's certainly provisions in the Civil Aviation Act um that require um solvency, but obviously there are there are uh there are times where you know, for example, someone's under administration and the like that um you know, CASA works with those operators cuz the the key thing as you you point out is um ensuring they can make their safety obligations.
>> All right. And and you oversight that. And is there an obligation if a an airline is insolvent to to notify you?
>> So, in terms of oversight, um when when a operator gets their air operator certificate, um they make a declaration. We would for for an airline we would do a uh financial viability assessment. And then throughout the the life of that air operator certificate, um if we receive intelligence or advice that there are financial um troubles with that operator, then then we would have that discussion with them.
I I think CASA has direct oversight of Nauru Air Corporation, which is the parent company of Nauru Airlines. Is that right?
>> That's correct.
>> Has Nauru Air Corporation been operating while insolvent?
>> Not that I'm aware of, Senator.
>> Have they provided you with any notice in relation to their solvency?
>> Not that I'm aware of, Senator.
>> Not that I'm aware.
>> Have you made any inquiries in relation to their insolvency? >> Not that I'm >> capability?
>> Not that I'm aware of recently, Senator. No.
In in terms of operations from Australia and including for Australian uh registered airlines such as Nauru Air Corporation um when they are fly operating and flying into I think it's Yaren, isn't it? Nauru International Airport.
>> Into Yep. Nauru.
>> Yeah. I'll I'll just call it I think it's called Yaren, but I'll call it Nauru International Airport for for clarity. Um Do you Do you place the onus on Nauru Air Corporation to determine whether or not Nauru International Airport is adequate for the landing of their fleet?
>> Yes, that's correct.
>> And are they required to provide advice to you on an ongoing basis about the adequacy of the >> It's just not a matter for CASA?
>> Uh well, it it is, but I mean we would um so when they again when they apply with their their airport suitability criteria um CASA would assess that. And what that does is enable the airline to make that own determination for themselves. And yeah.
>> So So Nauru Airlines which is the holder of the Australian air operator certificate also provides its own assessment of Nauru International Airport.
>> That's correct.
>> there's no in there's no independent checking of that. So Nauru marks its own homework in relation to the
>> That's right. But when we conduct surveillance, we confirm that they've been applying their procedures on whatever it may be to ensure that CASA remains confident those systems remain effective.
>> But in terms of checking whether or not Nauru International Airport is adequate to meet, for example, the the 737 fleet that Nauru Airlines has? Basically, Nauru makes the assessment. Um and Nauru checks its own homework.
>> To a degree, yes, that's correct.
What do Nauru Airlines CASA-approved procedures, if anything, require when Nauru International Airport's rescue and fire fighting category falls below what's required for an aircraft type? For example, the the airport, as I understand it, has only two fire categories, five vehicles at category seven. Um and obviously, if one of them's unserviceable, that wouldn't meet Australian standards. Um what what do they have to do to to advise you in situations like that?
>> So sorry, Senator, did you say that it wouldn't meet the Australian standards?
>> If one of them wasn't.
>> So, um Airlines, um and again, I talk about in within their their own procedures, determine whether there is um a need for them to have aviation rescue fire fighting at their destination. So, it's not a mandatory um requirement by CASA under the law for them to to do that.
>> Oh, so Nauru could choose to have no fire fighting.
>> That's right. So, there's lots of instances where passenger flights around the country operate where there's no aviation rescue fire fighting.
>> But but this is this is the hub for Nauru Airlines, where I think they have about Well, you can remind me how many how many aircraft
>> Seven aircraft.
>> Sorry?
>> Seven aircraft.
>> Seven aircraft, which is a significant number, and they're 737s and quite sizable aircraft.
>> They're predominantly based in Brisbane.
>> Yes, but they their Pacific hub is through Nauru, correct?
>> Uh presume so, Senator. I I don't know what the
>> But they can choose whether or not to have fire fighting.
>> Correct.
>> So this is purely a matter for Nauru.
>> It is That's correct.
>> Even though the safety has been um oversighted of the of the airline under an Australian air air operator certificate.
>> That's correct.
Do you know since January 2024, how many air returns or turn backs involving Nauru Airlines have been notified to CASA?
>> I'm not aware. Uh I don't have that exact data in front of me um on air returns. And I I guess the other thing is air returns happen for a a range of different reasons, not just technical or safety.
Well, um can you provide um the list of air returns or turn backs? Are they the same thing? >> Air returns, turn backs.
>> the same thing, Senator. Yes. >> We don't capture that information though, Senator, unless there's been a um an ATSB occurrence report or uh alternatively a a report made to Air Services Australia.
>> Well, well I'm advised there have been at least eight turn backs by Nauru Airlines aircraft um out of Brisbane this year. Um that would be a lot, wouldn't it, for
>> Probably. It depends on what the circumstances were. I mean, it could be unruly passengers, could be technical,
but if you don't You tell me you don't
>> We don't receive that often. We We don't receive the data. It's not a requirement for, you know, if they've got um a non-safety related matter for them to make a report. It's a commercial decision sometimes, so.
>> Well, I'm told there have been a disturbing number of turn backs from Nauru Airlines um into Brisbane over the last few years. Um but but they haven't advised anything to you and you haven't made any inquiries.
>> No, sorry.
>> Okay, Senator, um we'll certainly go and take on notice if there have been any reports to us um about any turnbacks um and just check to see whether there's any other reports which might seem out of kilter with what would normally expect to see with other operators.
>> well one one event that that's been raised with me was the November in November 2023 a Nauru Airlines uh Boeing 737 freighter experienced horizontal stabilizer control difficulties later attributed to corrosion and then it was grounded for 35 days. Was that event reported?
>> We'd have to take that on notice, Senator.
>> Would that be the kind of event that would be reported by CASA, an aircraft flying in Australian airspace with a corroded stabilizer?
>> If there was something like a a major defect, um it would be reported to CASA being an Australian registered aircraft.
>> And we would normally do some form of surveillance in response to that.
>> Well, would would that be as that strikes me as a significant um air safety issue, a plane taking off with a corroded uh horizontal stabilizer um that causing so much difficulties it had to be returned to the airport where it took off from and then being grounded for 35 days. That strikes me as a substantial matter.
>> Possibly, yes.
>> normally meet the threshold for report?
>> Um well, certainly for a major most likely for a major defect, yes.
>> But you can't say now whether or not that was reported to you.
>> Not at this time. >> on notice, Senator.
>> All right. Can you take on notice whether it was reported to you um and if so, was any action taken? And and if it wasn't reported to you, but your inquiries make it apparent that it did happen
>> Yeah.
>> what if any action will be taken in relation to that?
>> We'll take that on notice as well,
>> In reply to a question on notice, I think 252 in relation to continuing airworthiness managers with Nauru Airlines, um you advised that I think Ron West was the continuing airworthiness manager between 2022 and 2026, and Christine Lechford would between 2022 and 2026. You said both. Um they were acting as continuing airworthiness managers. Is it normal to have two entities, two people like that?
>> Yeah, so sometimes um operators choose to have an alternate as well, um in case one person goes on leave or or or whatnot. So, it's not not unusual.
>> But when when I've made some due diligence inquiries myself in relation to that, Ms. Lechford's um LinkedIn account indicates that she ceased working with um Nauru Airlines in February of 2026, well before the answer was given. Did Was that informed to you that she'd ceased working in February 2026?
well, I don't know, Senator. I I'm There's not a requirement to to necessarily for them to inform us. Normally, we find out because they want to change somebody.
>> And the fact they've got a
>> But so aren't they aren't they required to tell you about their key personnel?
>> If they've If they've got another approved person to do that position, then that would be sufficient for us. I mean, the main thing is you've got the key personnel who've been approved by CASA undertaking those roles. And again, we're happy to look into the the details, but my
>> Yeah. Well, could could you because I can find no evidence anywhere of Ron West asserting that having that role? Um and on what basis did you determine that Ron West had that role?
>> It would have been through our um our systems which which where we which we maintain to include all the information about approvals from the from the authority.
>> But have you truth checked that as to whether or not Ron West was actually in that role? There's no external evidence to support this. It may be true, but I can find no external evidence to support this.
>> This would have come from our systems and it would have only gone into our system if the person had a the airline had approved to appoint this person to that role.
Nauru Airlines complying with its obligations to do that. So simply whatever I I Could I ask you to do some due diligence in relation to that?
>> Of course, Senator.
the um the most recent information that's included um has neither Ron West or Christine Lechford publicly um advising that they are the airworthiness um manager for Nauru Nauru Airlines, but indeed a a Mr. Brian Douglas is asserting that since February of 2026.
>> Okay, we'll take that on notice, Senator.
>> Were you advised of that change by Nauru Airlines?
>> We would have to take that on notice, Senator. I don't have
>> Can you remind me when question on notice 242 was answered?
It was in the hands
>> May from the May
>> Yeah, from the May estimates.
>> hearing, so would have been
>> Well, you see all of these changes seem to have happened months before your answer. Months and months before your answer. I I can't They're they're they're they're public profiles on LinkedIn directly contradict what you told me.
>> And and Senator, we wouldn't go To be honest, we wouldn't check on LinkedIn. We would go and see who's been approved in our system to do these roles. Um
>> Yes, but I was asking you these questions cuz I've deep concerns about the management of Nauru Airlines. Deep concerns about their financial uh capacity, deep concerns about the safety of their operations, deep concerns about whether or not what you're being told is true. You then respond back simply checking your your your documents. And what I'm telling you is the most basic due diligence on LinkedIn suggests what you've been told by Nauru Airlines is not true.
>> No, I understand exactly what you're saying, Senator, and we will we will we will move quickly to determine whether
>> This wasn't me being Inspector Clouseau, this was me looking at LinkedIn.
>> Yeah, and I understand what you're saying, Senator. As I said, our our systems are, you know, we we provide approvals um for key personnel and we very I've in my whole time at CASA, I've never heard a situation where someone is approved and then not been appointed into that particular role. So
>> Well, could I ask you to review all of that?
>> Yes, we'll certainly do that.
>> And and respond to the committee. Um has
>> Senator Shoebridge, sorry, just before you go, um the committee No, no, I'm going to keep you going, but just the committee has agreed to release the ATSB just so the officers aren't hanging around. Thank you, Senator Shoebridge.
Um has CASA assessed Nauru Airlines drug and alcohol management plan in the past 2 years? And if so, were any findings
>> I'd have to take that on notice, Senator.
>> All right. Thank you. And if so, can you advise us of the findings?
>> For the last 2 years?
>> Yeah, I said any findings released, I meant to say raised or And and if so, yes, provide advice about what if any findings were found.
>> So so
>> If so, [clears throat] provide advice about the findings, what they were. >> Um since 2021, how many safety reports or public interest disclosures or whistleblower reports has CASA received about Nauru Airlines.
>> I'll take that on notice, sir.
>> Yeah. And can you detail how they were handled? in um in October on on the 2nd of October this year, the Asian Development Bank signed a $15 million financing package with Nauru Air Corporation, helping them to acquire yet another Boeing 737-800 aircraft. Um was CASA in any way advised of this? Were CASA documents used in that loan application, do you know?
>> Um my recollection is that we did have visibility through Department of Foreign Affairs and Trade, but again, I just have to take that on notice to confirm that's correct.
>> And could I ask you to review that in light of the concerns that have been raised with me about the insolvency?
Yes, I am.
>> And the financial adequacy?
>> Thanks, Mr. Shoebridge. Uh Senator >> No, I have a question.
>> Is that from CASA? >> No, I just have one.
>> Just one? Yep, thank you.
>> Um you would have heard me ask Air Services about the uh about controlled airspace around Newman. Um have you been asked to consider controlling airspace around Newman? It's got 450,000 passenger movements.
>> Um Senator, we've been doing a lot of work in the Pilbara region as a whole with the level of activity that's happening there. As far as I'm aware, we haven't received a request specifically about controlled airspace at Newman. >> But we are looking generally at what other measures we should be introducing in that region, which might not go as far as controlled airspace, but it might include additional services or requirement for carriage of particular technology on the aircraft, but I will take on notice to see if we've had any issues specifically
at >> done additional airspace management at Ballina.
>> Yeah. Yeah.
>> I would be surprised if Ballina is doing 450,000 passenger movements a year.
>> I'd take that on notice, but it's a very busy aircraft airport and it's also, I suppose probably not dissimilar to Newman, but it's also got that mix of commercial air transport operations as well as well as GA and sport aircraft operations, so it becomes quite a complex area to to manage.
>> All right, thank you. Provide that information on notice. That's it for me, chair.