Part 2: The Civil Aviation Authority's role, structure, and functions

2.1
In this Part, we provide background information about the CAA's role, structure, and functions. We explain:

• the CAA's roles and responsibilities;
• the Director's role;
• the structure of the CAA;
• the civil aviation safety system;
• how the CAA carries out certification and surveillance; and
• the safety performance of civil aviation in New Zealand.

The Civil Aviation Authority's roles and responsibilities

2.2
On 10 August 1992, the CAA was established by amending the Act.

2.3
The Act specifies that the functions of the Minister of Transport (the Minister) include promoting civil aviation safety and security, and administering New Zealand's participation in the Chicago Convention⁷ and any other international aviation convention, agreement, or understanding to which the Government of New Zealand is a party.

2.4
The Act provides for the Minister to appoint a five-member Civil Aviation Authority. We refer to that body in this report as "the Board" because the organisation that carries out the day-to-day civil aviation safety activities is also referred to as "the Civil Aviation Authority".

2.5
The Aviation Security Service is a separate service unit of the Board that provides specialised aviation security services. It is outside the scope of this report.

2.6
The Board is the governance body of the CAA. The Act allows the Minister's functions and powers to be delegated to the Board.

The Director's role

2.7
The Act also enables the Board to appoint a Director of Civil Aviation (the Director) and to delegate responsibilities and powers to that person.

2.8
The Act also gives the Director a range of functions and powers, including two functions that are relevant to certification and surveillance:

• controlling entry into, and operation within, the civil aviation system, through granting, suspending, revoking, or imposing conditions on aviation documents; and
• taking any action that may be in the public interest to enforce the provisions of the Act and the Rules made under the Act, including inspections and monitoring.

2.9
In carrying out the statutory functions and exercising the statutory powers given by the Act, the Director acts independently, and is not responsible to the Minister or the Board in relation to any particular case.

2.10
The Act provides the Director with discretion on whether to suspend, revoke, or impose conditions on an aviation document.

2.11
The Director is also the chief executive of the CAA. In this role, the Director is accountable to the Board for the CAA's performance in achieving the strategic priorities and operating intentions in the CAA's statement of intent, including the performance measures.

The structure of the Civil Aviation Authority

2.12
The CAA is organised into six groups. Three groups are aligned with sectors of the civil aviation industry:

• the Airlines Group is responsible for overseeing the activities of operators of aircraft weighing more than 5700kg, or containing 10 or more passenger seats, and organisations for maintenance, training, design, manufacturing, and supply;
• the General Aviation Group is responsible for overseeing the activities of operators of aircraft that weigh 5700kg or less and have nine or fewer passenger seats; all helicopter, agricultural, and balloon operations; and all sport and recreation aviation operators (commercial and private); and
• the Personnel Licensing and Aviation Services Group is responsible for:
  • licensing pilots, maintenance engineers, air traffic controllers, flight engineers, and flight examiners (including medical certification); and
  • aviation services: air traffic service providers, airports and aerodromes, training organisations, meteorological services, communications services, aviation security, and dangerous goods.

2.13
We refer to these three groups as "the operational groups" of the CAA.

2.14
The CAA uses the terms "inspector" and "auditor" to describe the staff from each of the operational groups who carry out certification and surveillance work. In this report, we use the term "auditor".

2.15
Figure 1 shows the organisational structure of the CAA, including the operational groups outlined in paragraph 2.12. It shows all the groups within the CAA, but at the unit level it includes only the units within each group that we looked at during our audit.

Figure 1
Organisational structure of the Civil Aviation Authority

Note: FTEs are full-time equivalent staff.

Resources and workload within the CAA groups

2.16
There are 178 organisations holding air operator certificates in New Zealand. The Airlines Group oversees 19 organisations that hold certificates for large or medium aeroplanes. The General Aviation Group oversees the rest, which hold certificates for small aeroplanes and helicopters. The General Aviation Group also oversees 108 operators with agricultural aircraft operator certificates. Some operators have more than one certificate. For example, an operator can have an air operator certificate and an agricultural aircraft operator certificate.

2.17
As at June 2009, there were 14 auditors in the Airlines Group (six in the Flight Operations Unit and eight in the Airline Maintenance Unit) carrying out certification and surveillance of airline operators. In the 12 months to 30 June 2009, these auditors dealt with 922 certification requests,⁸ and spent 5025 hours on routine audits and 333 hours on spot checks.

2.18
There were 20 auditors in the General Aviation Group (nine in the Fixed Wing Unit and 11 in the Rotary Wing and Agricultural Operations Unit) carrying out certification and surveillance of small aeroplane and helicopter operators. In the 12 months to 30 June 2009, these auditors dealt with 912 certification requests, and spent 3384 hours on routine audits and 811 hours on spot checks.

The civil aviation safety system

2.19
New Zealand's civil aviation safety system is based on the "life-cycle" approach advocated in the Swedavia-McGregor Report.⁹ This system is based on:

• setting a minimum standard of safety behaviour through the Rules, and by placing conditions on aviation documents;
• allowing entry into the civil aviation system to those operators who have the capability to meet the required minimum standard for certification and the conditions placed on their aviation documents (certification);
• providing information and advice to operators to help them comply with the Rules;
• monitoring operator adherence to the safety standards and their aviation documents, including identifying action that these participants need to take to ensure that they comply with the safety standards (surveillance); and
• where necessary in the interests of safety, imposing conditions on, suspending, or revoking the aviation document issued to the operator.

2.20
Figure 2 shows the "life-cycle" approach to regulating civil aviation.

Figure 2
The "life-cycle" approach to regulating civil aviation

Source: Brief for the Incoming Associate Minister of Transport, The Civil Aviation Authority of New Zealand, Civil Aviation Authority, 30 June 2009, page 21.

2.21
All participants in the civil aviation safety system are required to take their share of responsibility for safety by fully understanding and complying with their obligations under the Act.

2.22
The Act requires participants to ensure that all activities and functions are carried out safely and in keeping with the relevant safety standards and practices. This includes ensuring that their employees are appropriately trained and supervised, that the organisation is appropriately resourced, and that its management system will ensure compliance with the Rules and any conditions attached to its aviation documents.

How certification and surveillance is carried out

Certification of operators and flight operations

2.23
Certification controls the entry of operators into the civil aviation system. The main purpose of certification is to ensure that prospective operators meet or exceed the required standards, and that they understand and have the competence and resources to comply with the Act and the Rules.

2.24
Rule Part 119 prescribes the certification requirements for operators to perform air operations for air transport (of passengers) and commercial transport (for example, of freight). It introduces two levels of certification:

• airline air operator certification, which permits operations in all sizes of aircraft; and
• general aviation air operator certification, which permits air operations in aeroplanes with nine or fewer passenger seats and weighing 5700kg or less, or using a helicopter for air transport and commercial transport operations.

2.25
Prospective operators¹⁰ are required to complete an "exposition" (which provides information on the operator's general policies, duties, operational control policy, and procedures, and the responsibilities of personnel). The CAA checks the exposition to ensure that it complies with the Rules. Airline operators must also have an internal quality assurance system in place that ensures compliance with the procedures specified in Rule Part 119. All prospective operators nominate staff members to perform key roles in the organisation (senior persons). The CAA checks that these staff members have the relevant qualifications, experience, and knowledge, and completes a "fit and proper person" assessment of them.

2.26
Once the CAA accepts the exposition (where applicable), staff nominations, and the internal quality assurance system, the auditors carry out an inspection.¹¹ If successful, the operator is certified for an initial period of six months. Within that period, the auditors perform a spot check and a "compliance inspection".¹² At the end of this process, if the CAA requirements have been met, the operator is re-issued a certificate for a total period not exceeding five years.

2.27
At the end of the term of the certificate, operators are required to "re-enter" the system by going through recertification. Although recertification is similar to the certification process, the inspection phase is replaced with the review phase, which includes a review of historical data (for example, audit report, compliance history, organisational changes, occurrences), which may be combined with a compliance audit or inspection. The operator still has to satisfy all the certification requirements.

Surveillance of operators and flight operations

2.28
The CAA considers that the main purpose of surveillance is to check that participants who have entered the civil aviation system continue to operate safely, in keeping with relevant prescribed safety standards and practices, and in compliance with the conditions attached to their aviation documents. It is therefore designed to:

• check that participants are complying with the Rules and the conditions of their aviation documents; and
• identify and correct non-compliant behaviour and unsafe practices before they cause an accident or incident.

2.29
The CAA's surveillance policy sets out the CAA's surveillance requirements. The surveillance policy requires the type, depth, and frequency of the surveillance to be primarily driven by:

• international commitments, particularly International Civil Aviation Organisation (ICAO) guidance; and
• the risk profile of the operator or type of operation.

2.30
The surveillance policy also sets out the following range of surveillance methods and guidance about when each of these should be used:

• Systems-based routine audit – carried out yearly (or as adjusted after evaluating risk profile results) for participants who have an operating certificate and documented systems. The focus is on checking what is being done against what the participant says they will do, as set out in the manual or exposition.
• Inspection – for programmed surveillance of participants where the systems-based approach of a routine audit is not suitable (for example, participants who are not required to hold an exposition). The focus is on checking safety practices, documents, and records.
• Spot check – used to check a participant's compliance on an unannounced basis, and which can be carried out at any time or as part of a programme to focus on specific areas or on a particular type of operation.
• Special purpose audit or inspection – used to focus on areas of risk or to find out the cause of poor safety performance, a high-risk profile, or other safety concern.
• Unobserved surveillance (covert surveillance) – used when the CAA has grounds to believe that a participant will significantly alter their compliance behaviour if they are aware of the intended surveillance.

2.31
The surveillance policy requires that all failures by an operator to comply with the Rules, the conditions of their aviation document, or their organisation's exposition are to be raised with the operator when they are identified. All findings are to be summarised at a meeting with the operator at the end of the audit visit and included in the audit or inspection report that is prepared for the Director and copied to the operator.

The safety performance of civil aviation in New Zealand

2.32
More than 96% of passenger seat hours¹³ in the New Zealand civil aviation system are provided by the airline operations (large aeroplanes) group of the public air transport category. This group has a good and internationally comparable safety performance record.

2.33
In 2006, New Zealand was audited by ICAO as part of ICAO's Universal Safety Oversight Audit Programme. The audit focused on assessing whether New Zealand was complying with the safety-critical elements of the Chicago Convention. The audit included an assessment of the CAA's surveillance processes for airline operators and found that the CAA's performance compared favourably with that of aviation safety regulators in other developed countries.

2.34
Figure 3 shows the rate of accidents (that is, the number of aviation accidents occurring in 100,000 flight hours) for all the Safety Target Groups. The rate has remained consistently low for the airline operations (large aeroplanes) group, improved for the airline operations (medium aeroplanes) group, and has fluctuated for the airline operations (small aeroplanes) group.

2.35
The Safety Target Groups with the highest rate of accidents are the agricultural operations (aeroplane), private helicopter operations, and private aeroplane operations groups.

Figure 3
Rate of accidents for each Safety Target Group

Source: Civil Aviation Authority annual reports, 2005/06 to 2008/09.

7: The Convention on International Civil Aviation (Chicago 1944) – "the Chicago Convention" – established the International Civil Aviation Organisation (ICAO). The Chicago Convention was signed on behalf of the Government of New Zealand in Chicago on 7 December 1944. Article 37 of the Chicago Convention states that ICAO shall adopt international standards and recommended practices and procedures regarding safety, regularity, and efficiency of air navigation. Standards and recommended practices are designated as Annexes to the Chicago Convention. At present there are 18 Annexes. Each contracting state (including New Zealand) is responsible for developing and promulgating the national legislation, regulations, and standards necessary to comply with ICAO commitments, and to implement national decisions in discretionary areas. New Zealand legislation provides for this in section 14A(b) of the Act.

8: Certification requests include certifications, recertifications, and approving changes to aviation documents.

9: The Swedavia-McGregor Report (1988) was the result of a study "to consider the need, in the interests of safety, for regulatory controls of civil aviation and their enforcement, to identify the appropriate level of regulation, and to determine the resources needed for a civil aviation safety authority". At the time of the Swedavia-McGregor Report, the Ministry of Transport carried out that function. The findings and recommendations in the report are the foundation of the present regulatory framework in New Zealand.

10: In the air transport category, but not agricultural operators.

11: The main purpose of this inspection is to establish whether the management systems detailed in the exposition are in place. The inspection also involves on-site evaluations of support facilities, aircraft, training facilities, maintenance equipment and facilities, and an evaluation of the likely effectiveness of the policies, methods, procedures, and instructions described in the applicant's exposition.

12: The purpose of a compliance inspection is to:

• confirm that the certificate-holder is able to demonstrate compliance with their documented systems and procedures; and
• establish whether their documented systems and procedures are adequate for the nature and size of the operation.

13: Passenger seat hours are calculated by the number of passenger seats that are available on a flight, not the number of passengers who sat in those seats.