The aviation sector is no stranger to bad news, whether it be catastrophic accidents, high-profile corporate collapse or the emergence of serious safety concerns. Claire Chaffey speaks to three aviation lawyers there to clean up the mess

Ten years ago, a major Australian airline, Ansett, collapsed in spectacular fashion.

It was a corporate disaster which irrevocably altered the Australian air services market and, briefly, reduced what was a Qantas-Ansett duopoly to a Qantas monopoly.

Today, things are looking much bleaker for Qantas. The company’s CEO, Alan Joyce, has admitted the aviation giant is underperforming, and he is thus taking restorative measures which are proving to be highly unpopular with the unions and threaten its reputation both here and abroad.

While no-one is expecting an Ansett-style end for Qantas any time soon, many agree that its golden era has perhaps come to an end.

“The Australian market has changed dramatically,” says HWL Ebsworth partner Richard Davis. “There is far more competition. Internationally, of course, a large number of international airlines are now flying to Australia from a number of markets with increasing frequency and capacity.”

Fierce competition

If there is one change within the aviation sector which appears to be permanent, it’s the huge increase in competition which has developed since Ansett’s demise and which has brought with it a significant increase in pressure on airlines to deliver in terms of safety, value and commercial success.

“The Middle East and Asian-based airlines have brought competition to the market, and with growing liberalisation through increased capacity under Australia’s bilaterals (Air Services Agreements), including a number of ‘Open Skies’ agreements, there is much greater access for airlines from other countries to the Australian market,” says Davis.

In Australia, the domestic market has seen the birth of Virgin, Jetstar and, most recently, Tiger Airways. While the big winner out of all this has undoubtedly been the consumer, the pressure on costs has claimed some high-profile victims – and that is where lawyers like Davis come in.

In July this year, the Civil Aviation Safety Authority (CASA) grounded Tiger Airways, demanding that it address numerous safety concerns, and Davis was on hand to assist.

“We successfully got Tiger back in the air,” he says. “That was a huge case. We were working 24/7 for some months until we got them back in the air. Once you have got the tiger by tail, so to speak, you can’t let go.”

Davis says the biggest challenge was convincing CASA that Tiger had attended to all of its safety concerns (including that it no longer posed “a serious and imminent risk to air safety”) and dealing with the Australian Competition and Consumer Commission in terms of Tiger’s communications with customers during its period of suspension.

Eventually, though, Davis and his team made a successful case and the airline is now back up and running.

“Tiger is now flying again and it is very much here to stay. It is fully supported by its shareholders in Singapore,” he says.

Crash course

Despite rigorous checks and balances which strive to ensure that safety is an airline’s top concern, accidents do happen.

When they do, Carter Newell partners Glenn Biggs and Paul Hopkins find themselves with their hands full.

Often working throughout the Pacific in places like Indonesia, Fiji and Papua New Guinea, Biggs and Hopkins say they must deal with numerous issues, including damage to property, injury claims and recovery costs, to name a few.

Working in such different jurisdictions, however, provides its own set of challenges.

“It is really important, when you work in these jurisdictions, that you respect the culture,” says Hopkins. “We have been doing claims out of PNG for 20 years. We know there are certain nuances and certain ways to deal with the local people. Clients operating in the area respect that as well, and they expect their lawyers to … You really have to proceed with caution. There are a lot of factors that have to be taken into account before you move to resolve things.”

Hopkins also says that doing a good job once disaster strikes is about much more than simply knowing the law.

“It is just about getting in and making sure everything is done carefully, properly and appropriately,” he says. “You have to deal with families who are devastated and make sure you treat them with respect and care. All of that is very important.”

Stuck in transit

Disasters aside, when it comes to protecting consumers, some of the biggest changes facing the aviation sector are those outlines in the Federal Government’s National Aviation Policy White Paper which was released in 2009.

While proposed legislative changes contained within the paper would mean an increase in insurance limits (in particular for passengers on domestic carriage) from $500,00 to $725,000, with some regimes to undergo potential fundamental change, no action has yet been taken – something which has not particularly come as a surprise to Biggs.

“The White Paper was very ambitious and very exhaustive,” he says. “But even when we were reading the permutations of it, we felt that it would still be some time before we saw some real change.”

In the mean time, despite the fact the sector is not performing strongly in the commercial sense, there is still plenty to keep aviation lawyers occupied.

“Aviation is a broad industry sector in which their remains much activity in spite of the global downturn,” says Hopkins. “Ranging from the smaller end with recreational aviation, flight schools, tour operators and short charter flights, to the other end of the spectrum in jet aircraft and commercial airlines, there remains a very competitive industry and much demand for travel.”

Davis agrees. He believes the outlook for the sector is positive – especially given the prevailing difficult conditions which continue to challenge carriers like Qantas.

“There will be lots of activity, because there is so much competition in the market – on both the domestic and international markets,” he says. “Provided there is competition, people are always going to be looking for new opportunities. Airlines will be looking for lawyers that not only understand the legal and technical competition side of the industry, but also understand how airlines work as businesses, how they’re managed, and how they interface with their service providers and each other.

“So I think there is lots of work ahead of us.”