Regulation Impact Statement

CASA #0314

Airworthiness requirements for Light Sport Aircraft

Amendments to Subpart 21.H of the

Civil Aviation Safety Regulations (CASRs)

Table of Contents

Abbreviations

AC                   Advisory Circular

ASRA              Australian Sport Rotorcraft Association

ASTM             American Society for Testing and Materials

AUF                 Australian Ultralight Federation (now known as RAA)

CAA                Civil Aviation Authority

CAO                Civil Aviation Order

CAR                Civil Aviation Regulations 1988

CASA              Civil Aviation Safety Authority

CASR              Civil Aviation Safety Regulations 1998

FAA                 Federal Aviation Administration (of the USA)

FAR                 Federal Aviation Regulations (of the USA)

GFA                 Gliding Federation of Australia

HGFA              Hang Gliding Federation of Australia

ICAO               International Civil Aviation Organization

LSA                 Light Sport Aircraft

MTOW           Maximum Take Off Weight

NAA                National Airworthiness Authority

NPRM             Notice of Proposed Rule Making

OLD                Office of Legislative Drafting (Attorney-General’s Department)

RAA                Recreational Aviation Australia

RRP                 Regulatory Reform Programme

SAAA              Sport Aircraft Association of Australia

SCC                 Standards Consultative Committee

USA                 United States of America

Definitions

In this RIS:

The category of Light Sport Aircraft includes aeroplanes, gliders, gyroplanes, weight shift aircraft such as trikes and powered parachutes, and lighter-than-air aircraft such as balloons and airships.

Light Sport Aircraft (LSA) means an aircraft having:

·         A maximum take-off weight (MTOW) of 600 kg, or if the aircraft is lighter than air, a maximum gross weight of 560 kg.

·         If powered, a single, non-turbine, propeller-driven engine.

·         Maximum stall speed of 45 knots.

·         If a glider, a maximum never exceed speed of 135 knots.

·         If applicable, an unpressurised cabin.

·         A maximum seating capacity of 2 seats including the pilot seat.

·         Fixed landing gear, except, if a seaplane repositionable or if a glider, fixed or retractable.

1.    Background

1.1       This Regulation Impact Statement (RIS) explains the net public benefit of the introduction of new civil aviation legislative requirements covering the certification of a new category of aircraft called Light Sport Aircraft (LSA). The LSA category will generally include aircraft used for aviation sport and recreational activities, such as ultra- light airplanes, gliders, balloons, powered parachutes, weight-shift control aircraft and gyroplanes. The proposed legislative requirements, which are simply an amendment of the existing CASR Subpart 21.H and several consequential amendments to the Civil Aviation Orders, continue the approach taken in CASR Part 21 whereby Australia’s aircraft airworthiness requirements are generally harmonised with those of the USA Federal Aviation Regulations (FARs). The amendment to Subpart 21.H will incorporate the existing airworthiness acceptance criteria for aircraft potentially eligible for the LSA category contained in the current Civil Aviation Order (CAO) Part 95 exemption series, and in CASR 1998 Part 21 - Certification and Airworthiness Requirements for Aircraft and Parts or Part 200 – Exemptions.

What is a LSA?

1.2       A ‘Light Sport Aircraft’ (LSA) will be small, simple to operate, low performance aircraft having:

·          A maximum take-off weight of 600 kg, or if the aircraft is lighter than air, a maximum gross weight of 560 kg;

·          If powered, a single, non-turbine, propeller-driven engine;

·          Maximum stall speed of 45 knots^[1];

·          If a glider, a maximum never exceed speed of 135 knots;

·          If applicable, an unpressurised cabin;

·          A maximum seating capacity of 2 seats including the pilot seat; and

·          Fixed landing gear, except, if a seaplane repositionable or if a glider, fixed or retractable.

1.3       The definition covers various categories of LSA. These categories include aeroplanes, gliders, gyroplanes, weight shift aircraft (such as trikes), powered parachutes, and lighter-than-air aircraft, such as balloons and airships. The definition is not intended to include helicopters. Although other categories than aeroplanes are involved, and for the first time weight-shift aeroplanes and powered parachutes are recognised as sub-categories of aeroplanes with an internationally-accepted standard, a significant proportion of the LSA market will be for "conventional-looking" three-axis control aeroplanes, for both general aviation and sporting use. Because of the simplicity of these aircraft, the airworthiness acceptance criteria for the entry of these aircraft do not need to be complicated.

Sport and Recreation Aviation in Australia

1.4       The nature of the sport aviation sector in Australia is one of numerous amateur clubs and individual enthusiasts, with participation being largely for pleasure and competition, although there are some commercial activities, such as flying training. Direct participation in sports aviation is roughly estimated at over 40,000 persons Australia -wide. The sector has an important function in encouraging a love of aviation, the training of pilots and stimulating aviation economic activity at a ‘grass roots’ level. The sector is characterised by a spirit of independence, self-help and enthusiastic volunteers with a desire to be free of excessive regulation and willing to bear the risks. Despite the high participation rates, the sector is, economically and legislatively, of only minor importance when compared to overall aviation economic activity and it receives less attention from the regulator than other aviation sectors as a result.

1.5       Because of the nature of the sector, Australian Government policy with regard to sports aviation has historically been to encourage ‘self-administration’, with national sport aviation bodies taking on administrative functions required by the regulations, which would otherwise be undertaken by the regulator. The Minister for Transport and Regional Services has recently reaffirmed CASA’s policy approach. Under this policy, the regulator’s role is largely to set the safety standards while the sport aviation bodies administer themselves. Under this policy, sport aircraft can be either ‘CASA-registered’ or ‘RAA-registered’, and this is known as providing for a ‘parallel-path’.^[2] It allows operators not wishing to be a member of an official sport administration organisation and CASR Part 103 operating regulations to operate under CASA administration and CASR Part 91 general aviation operating flight rule regulations. The Glider Federation of Australia (GFA) and the Recreation Aviation Australia (RAA) are two examples of these self-administering sport aviation organisations.

1.6       The amendment to Subpart 21.H support this ‘parallel path’ approach to the type certification of aircraft used in operations to which proposed CASR Parts 103 - Sport and Recreation Aviation Operation and CASR Part 149 – Recreational Aviation Administration Organisations, apply. It will also support the certification of aircraft for those operators who choose to register and operate their LSA under CASR Part 91- General Operating and Flight Rules and VH-register their aircraft under CASR Part 47- Aircraft Registration. The relationship of these Parts is illustrated below:

USA LSA Standards

1.7       Although CASA already has mandatory design standards for these sort of aircraft, there are recently approved amendments to the USA Federal Aviation Regulation (FAR) Part 21 to formally introduce a new LSA category. Since the USA aviation market and its regulatory controls drive design and manufacturing standards in the aircraft industry worldwide, it is important to ensure that the airworthiness requirements in the new CASRs remain harmonised with FAR Part 21. This is important because Australia has strived to eliminate regulatory barriers to the import and export of aircraft. The current CASR Part 21 has been designed with the objective of harmonising Australian airworthiness regulatory requirements with those in the FARs. The advent of the FAR Part 21 LSA rules provides CASA with the means to address the increasing inadequacy of the current Australian regulatory arrangements, which rely on exemptions to the CARs and CASRs for such aircraft types, and which fail to deal with advances in sport and recreational aviation technology. 

1.8       Embedded in the new FAR Part 21 regulations is a new concept of manufacturer type ‘self-certification’, whereby the manufacturer (instead of the regulator) is responsible for the type certification of the aircraft, i.e. issues a statement of compliance that the aircraft complies with the approved design, quality production, continuing airworthiness and production test standards. The intention of type self-certification is to reduce certification costs and improve the efficiency of type certification during the design and development of new LSA aircraft. A move to manufacturer type certification in Australia would also be consistent with recommendations of “The Report of the Aerospace Industry Action Agenda”^[3] (for further discussion see 2.9).

Australian Standards

1.9       The amendments to Subpart 21.H will be supported by a list of LSA standards, which will provide the approved design, manufacturing, continuing airworthiness and production test standards for LSA (known as ‘consensus standards’) and the acceptance criteria for an LSA manufacturer.  The standards for LSA have been developed by the FAA through the American Society for Testing and Materials (ASTM) and the US manufacturing industry, with significant input from CASA and Australian LSA manufacturers. The standards will also include current Australian approved standards, which are as good as, or exceed, the ASTM standards.

1.10     This RIS identifies the significant new regulatory changes made to CASR Subpart 21.H – that mainly relate to manufacturer type self-certification and adoption of the new international consensus design standards for light sport aircraft – and their impact on industry groups affected.

2.    Issues

Existing Legislative Requirements/Standards - Reliance on Exemptions

2.1       Australia has generally led the world in the development of regulations for the design of sport and recreation aircraft. Currently the airworthiness acceptance criteria for sport aircraft are contained in CAO 101.55 and the CAO Part 95 exemption series, and in CASR 1998 Part 21 - Certification and Airworthiness Requirements for Aircraft and Parts or CASR Part 200 – Exemptions. The regulatory framework established by the CAO standards and the necessary exemptions from certain existing regulatory requirements were a temporary and unsustainable regulatory measure, taken to regulate a rapidly growing industry that was relatively low on CASA’s regulatory development priority list at the time. The exemptions were required because as the industry and technology developed, an increasing number of aircraft did not ‘fit’ the mandatory standards established for the design and manufacture of these aircraft.

2.2       The state of the art in sport aircraft has advanced at a rapid pace over the past twenty years with many advances in technology that have improved safety. These include improved light-engine technology and reliability, more effective application of low-speed aerodynamic principles, and new materials. In addition, seeing the need for training to reduce the high level of accidents, manufacturers have built larger two-place training aircraft.

2.3       The capacity of the existing Civil Aviation Regulations (CARs) unamended to effectively regulate these aircraft has diminished with time. This has created regulatory barriers that have hampered innovation by manufacturers and necessitated a complex and time-consuming process of negotiation with CASA. Although CASA has issued exemptions to temporarily resolve the issues, to extend them on a long-term basis would be an inappropriate use of the exemption process. CASA believes that a permanent and appropriate level of regulation that fosters technology changes is necessary.

2.4       As an example of how the current regulatory structure does not adequately cater for modern LSA, the primary category aircraft certification option covers only single-engine airplanes and rotorcraft, and excludes increasingly popular aircraft such as powered parachutes and weight-shift-control aircraft. Another problem is that as the regulations and exemptions have been adjusted to keep pace with aircraft developments, the airworthiness acceptance criteria for each aircraft category - such as maximum take off weights and maximum stall speeds - have become different.

2.5       This has resulted in difficulty in administering and understanding the rules, and considerable frustration for manufacturers and designers in trying to make their innovative designs ‘fit’ the prescribed design envelope. In addition, the entire CARs and CASRs still apply to these aircraft, except for the rules that the exemptions cover, making it difficult for the industry to understand and comply with them. With the growth in the popularity of sport aviation around the world, aviation regulators are moving, like CASA, to provide comprehensive sector-specific regulations, rather than continuing to maintain a system of exemptions from general aviation requirements.

Development of an LSA Category in the FAA Regulations

2.6       Since the Chicago Convention largely covers air transport operations, i.e. passenger-carrying operations, the regulations covering sport aircraft in each aviation country have not been aligned with ICAO Standards and Recommended Practices, and have evolved reflecting the growth of the sports aviation sector in the particular country. However, the differing means of regulating the type certification of LSA are converging internationally, with consensus forming as to how the sector should be regulated, largely consistent with Australian Government policy. Most importantly, the FAA issued an NPRM relating to certification of aircraft and pilots for the operation of LSA, proposing amendments to FAR Part 21. These rules have now been finalised and the legislative policy approved in the USA. Since CASA models Australian regulatory requirements in the areas of aircraft design, certification and maintenance on those of the USA for trade reasons, it is considered important that the new FAR Part 21 LSA category is adopted within the Australian CASR Part 21.

Reducing the Regulator’s Involvement in Certifying Light Sport Aircraft

2.7       Historically, sport aviation has an accident rate slightly above the general aviation rate, commensurate with the nature of sporting activities and largely unrelated to the structural integrity or maintenance of the aircraft. In the early days, the design and manufacture of sport aircraft was an important issue and contributor to accidents. However, the contribution of airworthiness factors to accidents has largely disappeared due to the vastly improved design and manufacture of LSA in Australia. The improvement in safety of these aircraft was achieved through the establishment by CASA of world-first airworthiness standards in the early 1980s together with advances in sport aircraft design technology. There is therefore no need to increase the regulator’s role in this sector, at least in airworthiness and manufacturing aspects.

2.8       To operate in general aviation and, in many instances, with the sporting organisations, the current airworthiness entry criteria for aircraft require full type certification to either primary category or normal category.  This entry control process for production ready-to-fly LSA-eligible aircraft requires CASA’s full involvement to witness test results and assess compliance reports. CASA has limited resources to regulate the sport aviation sector and competing priorities usually result with LSA being on the lower end of CASA’s certification priority scale. The costs of this process are considerable and are borne by the manufacturer, who ultimately passes this to the consumer. The type certification process requires substantial work and effort from the manufacturer and CASA, and incurs substantial costs and time delays due to the inability of CASA to process applications as quickly as industry would like. Of most significance to manufacturers is that they do not control the type certification process, which makes planning of their research and development program difficult. This leads to difficulties in responding to market opportunities and a long lead-time for introduction of new products.

2.9       As mentioned in Section 1 of this RIS, the role of the regulator in type certification of aircraft has been examined in the ‘Report of the Aerospace Industry Action Agenda’, published by DITR in November 2003. This report, which aims to promote innovation and skills in the aerospace sector in order for the Australian aerospace industry to compete more effectively in the global aerospace industry, makes recommendations to CASA.

The report recommends that CASA give priority to achieving successful mutual recognition of aircraft certification standards with NAAs of countries with whom market access is of key concern to the Australian aerospace industry. It also recommends that CASA establish appropriate type certification costs in the context of CASA’s cost recovery arrangements. Note that CASA’s cost recovery arrangements are currently under review, see following paragraph 5.37 for further detail.

2.10     The USA FAA regulations allow the manufacturer to essentially self-certify their product to approved standards. The regulator or an authorised airworthiness representative will only need to ensure that the manufacturer has attested to a statement of compliance that satisfies the design and manufacturing criteria. Costs would also be reduced because the manufacturer would take responsibility for the continuing airworthiness of LSA and monitoring safety of flight issues, instead of the regulator. Airworthiness ‘Directives’ or Flight Safety Bulletins would be issued by the manufacturer and only issued by the regulator in cases of significant public interest.

2.11     Introduction of the FAR Part 21 LSA category in the Australian regulatory requirements would therefore provide a solution to high certification costs and heavy regulator involvement in a sector that appears to be able to take on more responsibility for the continued airworthiness of the aircraft.

Artificial Regulatory Restrictions on Permitted Operations

2.12     The current regulatory framework applying to ultra light aircraft is complex, piecemeal and illogical, with some unintended consequences arising from giving regulatory exemptions to the Recreational Aviation Australia (RAA), in order to support self-administration. These consequences largely arise from the historical development of the regulatory framework and are not well founded on safety considerations. In practice, CASA has created an unintended regulatory barrier by applying different certification standards to aircraft operated in general aviation and those subject to the self-administration arrangements of the RAA.

2.13     When CASA developed CAO 101.55, it made provision for a primary category type certificate to be issued and required a Licensed Aircraft Maintenance Engineer (LAME) to maintain the aircraft.  But ultralight aircraft are exempt from CAO 101.55 requirements, do not require a Certificate of Airworthiness (CoA) and need only be maintained by an RAA qualified maintainer. This difference in maintenance and certification requirements creates a barrier to transferring an aircraft back to the CASA register if it has been operated in the RAA register, and frustrates the ‘parallel path’ policy (see 1.5). Some operators may wish to use their sport aircraft for flying training in general aviation and are therefore not permitted to do so because they have not been maintained or certificated appropriately (See 5.23).

2.14     As mentioned earlier, it is CASA policy to establish a ‘parallel path’ approach to sport and recreational aviation, thereby necessitating the removal of this regulatory barrier and establishment of type certification regulations that permit operation of the aircraft across multiple operational contexts. Without considerable complex amendments, the current regulations prevent implementation of this policy approach.

3.    Objectives

CASA’s Regulatory Reform Programme – Strategic Objectives

3.1       The prime objectives established for CASA’s Regulatory Reform Programme (RRP) (established to completely review existing aviation legislation), were to:

·      Maintain an environment where the participants in the civil aviation system assume responsibility for their safety actions;

·      Remove or limit the costs of compliance from the Australian civil aviation system;

·      Provide for the reduction of international barriers relating to the acceptance of Australian civil aviation products, services, and personnel overseas; and

·      Allow CASA’s intervention in the civil aviation system to be reduced to the appropriate level, through all or any of the following—

°        A reduction in unnecessary or unclear regulatory requirements;

°        The devolution, where appropriate, of CASA functions and powers; and

°        The granting of wider privileges to industry.

RRP Regulatory Structure Objectives/Criteria

3.2       CASA also established specific criteria for the development of the new safety regulations (CASR) under the RRP. CASA’s primary objective in developing the new aviation safety regulation structure was to provide standards that are clear, concise and unambiguous, and which are:

·      Focused on safety, adopting a systems approach^[4] where appropriate;

·      Consistent with Australia’s international obligations;

·      Harmonised with international standards, unless unique Australian circumstances require otherwise;

·      Cost-effective; and

·      Enforceable.

LSA Regulatory Structure Criteria/Objectives

3.3       In addition to the general regulatory structure objectives, the following objectives (consistent with those above) were applied specifically to the development of LSA certification regulations:

·      To remove the need for exemptions to the regulations for LSA;

·      To reduce the potential costs of sport aircraft type certification;

·      To remove artificial regulatory barriers to permitted operations;

·      Provide regulations which can deal with technological developments in the fields of LSA design and manufacturing; and

·      To recognize the capabilities of the Australian LSA manufacturing industry in meeting design standards, monitoring airworthiness and the type certification process. 

4.    Options considered

4.1       In considering how to deal with the issues described in Section 2 of this RIS and to the meet the objectives for the RRP and for the regulatory changes specifically described in Section 3, CASA considered:

·          Amending the existing regulations (to address the issues such as reliance on exemptions or costs of certification) and continue to take a uniquely-Australian approach to the regulation of LSA type aircraft; or

·          Adopting regulations similar to the European JARs or other regulatory solutions; or

·           Introducing regulations for the airworthiness requirements of LSA, modelled closely on the FAA proposed FAR Part 21 LSA rules.

4.2       Consideration of alternative regulatory and non-regulatory approaches was prevented by a number of constraints.  Firstly, Australia's aircraft certification regulations embodied in CASR Parts 21-35 are generally harmonised with the international aircraft airworthiness and type certification process in place, as established by ICAO Annexes 6 and 8. CASR Parts 21-35 implement Australia's obligations for aircraft certification and airworthiness under the Convention. CASA's options for resolving the issues and meeting the objectives in Parts 2 and 3 of this RIS were also constrained to a regulatory approach consistent with the existing CASR Part 21-35. As a result the options to continue to take a uniquely Australian approach or adopting similar European regulations were not considered viable due to the overriding consideration that Australia’s aircraft certification and maintenance regulations need to be continuously harmonised with the USA FARs, to ensure there are no barriers to the import or export of aircraft and aircraft parts.

4.3              In addition, aircraft certification standards established worldwide under the ICAO framework have been modelled for many years on the USA FARs, since most aircraft are designed and manufactured in the USA and aircraft design standards have largely been developed by the USA FAA and aircraft industry. CASR Parts 21-35 already mandate the USA FAR standards and there is no intention of departing from this approach for LSA. The development of suitable standards and a regulatory framework for the certification and airworthiness requirements for LSA by the USA means that Australia should follow suit in order to ensure that the trade in these aircraft to and from the USA is not impeded. CASA was therefore constrained to adoption of the FAA approach to LSA. In addition, the Australian manufacturing industry strongly advocated the adoption of the USA FAR Part 21 approach. CASA considered that the option of introducing regulations for the airworthiness requirements of LSA, modelled closely on the FAA proposed FAR Part 21 LSA rules, was the only viable option that would meet the objectives of the change.

4.4       It was determined that FAR Part 21 (and consequently the option pursued for CASR Subpart 21.H):

·      Establishes the definition of new aircraft category known as Light Sport Aircraft,

·      Introduces a special LSA certificate of airworthiness (CoA) and a new experimental certificate to operate LSA,

·      Introduces new mandatory approved design, manufacturing, production test and airworthiness standards (industry consensus standards),

·      Requires the manufacturer to attest on a statement of compliance for each aircraft that it conforms to the consensus standards (“self-type certification”);

·      Establishes mandatory systems for manufacturer monitoring and correcting of safety of flight issues in accordance with the standards; and

·      Establishes mandatory manufacturer training requirements

4.5       The following Table examines the ‘Objectives’ of legislative change against the ‘Options’ considered with a view to depicting CASA’s decision making process in determining the option introducing regulations for the airworthiness requirements of LSA, modelled closely on the FAA proposed FAR Part 21LSA rules as the most viable option. See also Section 5 for further discussion on the impact of the preferred option.

5.    Impact Analysis

Persons Directly Affected

5.1       The groups directly affected by any changes to LSA certification are:

·      Future Australian LSA commercial manufacturers – including Jabiru (the only Australian aero engine exporter), Gippsland Aviation, Lightwing, Sapphire, Fisher, Cobra Aviation and Airborne etc. These manufacturers currently make nearly all of the Australian-made factory flyaway aircraft – civil or military. These factories, and other Australian producers, supply aircraft kits for the home-building enthusiasts – both in Australia and overseas;

·      Instrument, avionics, electrical, engine suppliers

·      CASA sport and recreation aviation certification staff; and

·      CASA delegates.

Persons Indirectly Affected

5.2       The sport and recreational aviation community encompasses those enthusiasts who design, fabricate and fly their own truly experimental aircraft; those who build from commercially supplied plans; those who assemble their own aircraft from a proven kit design; those who prefer to purchase a new certificated, commercially built aircraft and those many people who choose to buy a pre-owned aircraft, whether factory or privately built. There are over 40,000 participants in the sport and recreational aviation sector in Australia. This sector will be indirectly affected by the new certification requirements as kit builders, owners, buyers or pilots of LSA. Members of the following organisations/groups could be expected to become pilots and operators of LSA aircraft:

·      Australian Gliding Federation

·      Australian Hang Gliding Federation

·      Australian Ultralight Federation – 60 clubs, 5000 members with 2,300 ultra lights

·      Sport Rotorcraft Association (those flying gyroplanes, not rotorcraft)

·      Ballooning Federation

·      Flying training facilities and aircraft hire organizations for private use

·      A subset of recreational pilots currently holding a Private Pilot licence, expected to take up Recreational Pilot Licences under CASR Part 61

·      Sport Aircraft Association (home-builders)

Aircraft Affected

5.3              LSA is a completely new aircraft category, although there are existing aircraft, which could meet the LSA definition. The category will include *production ready-to-fly aircraft to be used for private operations and flight training and hire and; **production kit built LSA used for private use. Conceptually, these aircraft are a category that falls between the existing primary category and the experimental classification, not properly catered for by the current regulations, and is not intended that it include amateur design aircraft.

* Production ready-to-fly aircraft means aircraft produced by a manufacturer that complies with the design, quality assurance, continuing airworthiness and product test standards.

** Production kit built aircraft means an aircraft assembled by the owner from a kit produced by a manufacturer to the design, quality assurance and continuing airworthiness standards.

5.4       Currently certificated aircraft that meet the new definition of LSA will be unaffected and will not be covered by the new regulations at this stage, although may be migrated into the category after the entire sport and recreation aviation regulatory package is implemented. It is unknown exactly how many aircraft or aircraft types will be developed in the new category, although CASA expects at least 200 new LSA aircraft net certificated per annum. It is expected that the production ready-to-fly category will grow rapidly.

Key proposals in Amendments to CASR Subpart 21.H

5.5       The following table lists the key changes and their impact if the amendments to CASR Subpart 21.H proceed:

Costs of Retaining the Existing Regulatory System for LSA-like aircraft (the Status Quo)

5.6       If the status quo were retained, apart from rewriting the current regulatory requirements contained in the CARs and inclusion of the multiple exemptions applicable to LSA-like aircraft into the new CASR regulatory format, there would be no practical change to industry compliance requirements or CASA functions. CASA would continue to enforce the current regulations and the problems with the current situation would remain, although piecemeal amendments and additional exemptions could be issued to deal with the problems on an ad-hoc basis. The regulatory requirements would not reflect the FAR Part 21 changes and Australian manufacturers would have problems competing in the US LSA market.

5.7       Costs associated with the current regulatory system are made up of:

·           CASA administrative costs associated with the existing piecemeal regulatory framework for sport aircraft;

·           Type certification fees paid by industry for CASA regulatory services, and

·           Indirect costs incurred by industry as a result of administrative delays and loss of market opportunities.

Costs of an inefficient regulatory system

5.8       There are un-quantifiable administrative costs for CASA associated with maintaining the current piecemeal regulatory system. To continue to enforce the increasingly out of date regulations and to keep issuing exemptions is administratively inefficient. A piecemeal regulatory approach is hard to understand and can lead to administrative confusion and make it more difficult to achieve and monitor compliance.

CASA Type Certification Fees

5.9       Under the current type certification system, CASA does the certification work, although an industry authorized person may be authorised to find compliance with the certification requirements for a primary or normal certificate. The current mandatory CASA charge-out rate for regulatory services (set in the Civil Aviation (Fees) Regulations 1995) is $135 per hour. Although the LSA aircraft category does not yet exist, to type certify a typical light sport aircraft with simplified standards, CASA charges would be of the order of $60,000, based on the current charge rate. The current CASA rate is not a commercial rate, and if CASA was to move to a full cost recovery basis, the fees would be much higher (likely $200 per hour), based on the true cost of provision of CASA type certification services and consistent with consultancy fees charged by industry authorised persons. When industry opts to use an authorised person to find compliance with the certification requirements, similar commercial fees are charged, in excess of current CASA fees.

5.10     On a full cost recovery basis then, the cost to the manufacturer for a light sport aircraft type certificate would be about $160,000. Although this fee would be sizeable from the perspective of a manufacturer, type certification fees collected by CASA would be less than 1% of the total regulatory service fees collected per annum (approx. $3.5 million) and the cost benefit to government of retaining the fee charging scheme is low.

5.11     Under the proposed self-type certification regulatory system, manufacturers may achieve some cost savings and other efficiencies by integrating the certification process with the design and manufacturing process. Although the type certification work required is the same, consultant or salaried engineers hired by the manufacturer are likely to gain better familiarity with the project than CASA personnel and their services could be obtained more quickly during the various phases of the design project.

Indirect costs of current certification system

5.12     The indirect costs of the current certification system for sport type aircraft are of considerable concern to manufacturers. From the manufacturers’ point of view, the current type certification system restricts innovation and incurs substantial research and development costs, of which the CASA fee is a minor portion. The current regulatory structure forces manufacturers to fit their innovative aircraft into prescriptive and inflexible standards, resulting in aircraft that are potentially less than optimum in safety and performance. There are substantial costs in fitting an innovative aircraft into ‘the box’ and a large amount of time negotiating with CASA to ensure all the requirements are met. Development costs for a new sport aircraft are high and result in costly aircraft to purchase. Costs savings arising from self-type certification can be reinvested in the design and manufacture process. A statement from one of the leading manufacturers of LSA in Australia illustrates this:

“The introduction of Part 21.H (LSA Rule) will make an enormous difference to Australian aircraft designers and manufacturers and our company in particular. Currently, light aircraft certification projects experience inordinate and substantial delays in processing through CASA as they are seen to be low priority relative to passenger carrying aircraft issues.  In our case one project has been delayed for more than 3 years resulting in cost overruns of more than $500,000 and missed opportunities, particularly in the target export market where sales of more than $3,000,000 could have been achieved. The proposed Part 21.H will align with the proposed USA/FAA LSA Rule and will enable our company to market its 2 seat aircraft models as factory complete products which can be used for flight training and on-line use in the Australian and USA markets.  Our competitive advantage of substantial involvement in aircraft and engine type certification will enable us to be at the forefront of these new market opportunities. Under the proposed rule, we will not deviate from our practice of using experienced and highly qualified (CASA authorised) aeronautical engineering consultants to prepare and review our type certification projects.  The real savings come in being able to achieve product- to- market in reasonable timeframes, which can be project managed and realistically budgeted.

We currently propose to type certificate 4 of our current kit plane models and two new models under the proposed rule over the next 2 years.  This will enable these models to be sold as factory built aircraft thereby increasing the value-added component by around 50% and resulting in increased employment of 40 people in our manufacturing network. The introduction of Part 21.H will greatly facilitate this project.”

Impact of the proposed LSA rules

Costs to manufacturers

5.13     Under Subpart 21.H, in line with the FAR Part 21 LSA rules, a manufacturer of a LSA will be required to:

·        Manufacture their aircraft in accordance with the LSA standards listed in the Advisory Circular, which comprise the Australian and FAA industry consensus standards;

·        Attest on a Statement of Compliance for each aircraft that it conforms to the standards (“self type certification”);

·        Test each aircraft in accordance with test specifications;

·        Newly develop and identify a system for monitoring and correcting safety of flight issues in accordance with those standards;

·        Develop pilot operating handbooks and flight training manuals;

·        Provide assembly instructions, if making kits; and

·        Make one ready-to-fly aircraft for issue of the LSA special airworthiness certificate.

5.14     “Self type certification”, where the manufacturer proves to themselves that an aircraft meets the design standards without CASA involvement, means reduced development and certification costs, due to increased design flexibility and more freedom for innovation, no CASA involvement in type certification and manufacturer control of the entire certification process. Although it is not possible to accurately quantify the cost savings across the sector, as it is unknown what aircraft types will be developed, it is expected that total certification costs could drop by more than half, compared to the situation where CASA type certified the aircraft. This would allow manufacturers to invest the savings into design and production and CASA expects that it will result in more affordable aircraft, in the $80-$100,000 range.

5.15     Under Subpart 21.H, manufacturers must establish a system for identifying airworthiness problems with the aircraft, working out how to correct them and issuing advice in the form of flight safety bulletins to customers as to how to correct the problems. This replaces the role of CASA in issuing Airworthiness Directives. Current Australian manufacturers of LSA aircraft already have business systems in place, such as customer and accounting databases that can be modified to serve the purpose of informing customers of airworthiness issues. Australian manufacturers already employ, or have access to, consultant engineers, to undertake type certification and assist with flight safety monitoring. Minor enhancements of existing systems are required to achieve compliance and to extend services from the amateur-built to the general aviation market, the costs of which are not known to CASA and are confidential but which would be a very small proportion of existing manufacturing and design development costs.

5.16     Manufacturers will have to ensure their QA and production complies with the ASTM or Australian standards. However, these costs will not be great because the current Australian standards already exceed the design consensus standards required. Such costs are also outweighed by the reduced product development costs and expanded business opportunities that the new LSA regulations offer. The system enhancements are regarded by the manufacturers as providing necessary customer services, rather than a costly compliance requirement.

5.17          During development of Subpart 21.H, members of the project teams expressed the view that the proposed regulations should ensure that all LSA manufacturers require an acceptance criterion to ensure the safety of these aircraft can be maintained. CASA responded to this concern by ensuring that the regulations for Subpart 21.H contains criteria for manufacturers to meet, such as a requirement to have access to qualified CASR Part 146 engineering representatives with experience in ultralight design and certification, suitable facilities, tools, equipment and trained staff, and an audit system to ensure quality control and compliance with the mandatory design standards before the first aircraft is sold. The criteria are similar to those required to be met by all other aircraft manufacturers and should ensure that new entrants to the LSA business have the ability and suitable experience to comply with the Subpart 21.H to ensure the safety requirements for these aircraft.

Benefits to LSA manufacturers

5.18     The new regulations should assist Australian manufacturers to access the US and worldwide market for LSA, which has enormous pent up demand for aircraft due to deferral of purchases, due to the previously restrictive US FAA regulations prior to making of the new FAA LSA rules. Two-place all-metal ready-to-fly aircraft meeting LSA requirements and certified under LSA are expected to be produced in quantity for US$25,000 to $40,000 off the shelf. At such prices, the development of a large and vigorous market for LSA in the USA is thought to be likely. Given release of the FAA rule in 2004, implementation of the rule, preparation of US LSA manufacturers, and preparation of the marketplace, the demand for LSA could accelerate considerably as early as mid-late 2005. It has been estimated that the potential new US LSA market will be 6500 units over the next 5 years, and 800 a year after that.

5.19     Australian manufacturers have been making aircraft for some time which will meet the US standards and therefore they have a competitive advantage to US manufacturers who are going to have to gear up to take advantage of the new LSA regulations. Australian manufacturers already are well established in North America, with agents in USA and Canada. It is unknown what market share Australian manufacturers could expect to achieve. The improved export situation worldwide resulting from the US FAA rules will further stimulate the domestic sales of LSA aircraft. It is expected that the market in Australia could be 200 aircraft per annum. Suppliers to the LSA manufacturing industry should benefit from improved sales to the sector as a result of the new rules.

Impact on operators and purchasers of LSA

5.20     As a result of Subpart 21.H, prospective purchasers of LSA should find that LSA aircraft are cheaper to buy as a result of the dramatically reduced product development and type certification costs and increased production levels, resulting from both increased domestic and export demand. Purchasers should have a greater range of both kit built and ready to fly aircraft. Since type certification will be carried out by manufacturers, rather than CASA, costs for this will be built into the purchase price but greatly reduced from previous costs. Aircraft are likely to be available in the $80-$100,000 category, which will make LSA much more affordable for new entrants. The nearest available alternative aircraft to this under CASR Part 23 will cost in excess of A$200,000. The operating costs of LSA should also be considerably cheaper than equivalent aircraft under the current regulations - at around $30/hr (including scheduled and unscheduled maintenance, with allowance for engine and propeller plus fuel cost) compared to the equivalent cost for a new CASR Part 23 aircraft in the range of $70 - $80 per hour.

5.21     Purchasers of LSA will receive additional airworthiness services from manufacturers, including bulletins and airworthiness alerts to alert operators to safety of flight issues, should they develop. Manufacturers will have quality systems in accordance with defined standards to ensure aircraft are manufactured to mandatory standards. Repairers of LSA aircraft will have improved training and be qualified Aircraft Maintenance Specialists (qualified under proposed CASR Part 66). Purchasers should have increased confidence in the safety of the products they buy as a result.

5.22     For an authorized representative who is required to issue a CoA for an LSA, the time involved in checking that the manufacturer has correctly met the type certification requirements and for inspection of each aircraft, is expected to be substantially less than experimental category aircraft currently. This means that the costs of issuing a CoA should be less than currently for aircraft of comparable complexity. It is expected that a typical LSA CoA would cost no more than $500, depending on the aircraft. This is a minor cost for prospective purchasers and operators of such aircraft, compared to the purchase price, operating costs and flying training costs. For a fleet of 200 new LSA per annum expected in Australia, the total industry cost of Certificate of Airworthiness issue per annum should not exceed $10,000.

5.23     The issue of CoAs will most likely be done as part of the registration of an aircraft with a sport aviation organisation. For example, The RAA regards the CoA cost as no impediment to increased membership levels expected from LSA purchasers. LSA owners who are not members of a sporting organization will need to obtain a CoA from CASA or a suitable CASA delegate at a similar price. For operators, these CoA costs are considerably less than for other general aviation aircraft.

5.24     Subpart 21.H offers the considerable benefit to LSA operators of the removal of artificial regulatory restrictions on permitted operations (see 2.14). Under the proposed LSA certification rules, all these aircraft will be accepted for the issue of a special CoA under LSA rules, and they can automatically be operated by either GA or the RAA and other sport aviation organisations.  The actual certification process will be easier and on the same footing, regardless of whether the aircraft is registered by CASA or by a sport aviation organisation. This effectively ends the unjustifiable situation where some aircraft could only be operated in the RAA context and others could only be operated in the GA context

Expected impact on flying training schools and aircraft hire organisations

5.25          Subpart 21.H is expected to benefit flying training schools and organisations that hire out aircraft for private flying by removing the artificial regulatory barriers to permitted operations. Currently there are some aircraft of types similar to LSA that are used in flying schools, outside the RAA administrative structure. These aircraft however, have to be type certificated under CASR Part 21. Such aircraft are consequently much more expensive to purchase and have to be maintained to the standards required for all other CASR Part 23 aircraft. Under the LSA concept of Subpart 21.H, if an aircraft was built under an appropriate consensus standard and was eligible for a Special CoA as a LSA aircraft, it could then also be used in a flying school and be let out for hire. As a consequence of the cheaper design and type certification costs, these aircraft would be considerably cheaper to purchase and could also be less expensive to maintain than equivalent CASR Part 23 aircraft. The consequence of this would be that the regular (outside the RAA) flying schools would be able to compete more equitably with RAA flying schools and would have a wider choice of ab initio flying training aircraft.

Expected impact on small businesses and regional aviation

5.26     Except for Jabiru, the manufacturers and potential suppliers of LSA and LSA equipment are probably definable as small businesses. The impact on these small businesses has been described above and is the same as the impact on manufacturers generally. For small domestic manufacturers that are not exporters of LSA, implementation of Subpart 21.H should promote a thriving and innovative Australian light aircraft manufacturing industry. Growth in the LSA sector will result in an improved market for LSA components and fittings, both domestically and for export.

5.27     It is hoped that the new Sport and Recreational Aviation ‘package’ of regulations will stimulate the sport sector generally, providing easier and cheaper access to the sports, encourage a pool of enthusiastic aviators to fly innovative aircraft, give more people access to production ready-to-fly LSA who had neither the time nor skills to design and build their own aircraft or build from plans. Australian manufactured LSA will appeal – in terms of the hip pocket and reliability and ease of handling – to a wider recreational aviation community. A more vigorous LSA market should see a growth in the activities and membership of sporting aviation bodies, many of which have clubs located in regional areas. Flying training schools and self-employed independent flight instructors that provide training and hire aircraft to both sport and private pilots should see a growth in business over the medium term, with no significant economic impact on their businesses arising from compliance requirements.
Expected Impact on Passengers

5.28     The regulatory changes proposed will have no impact on passenger transport.

Impact on Safety

5.29     Subpart 21.H is not being introduced to deal with a particular safety problem in the design, manufacturing and certification of sport aircraft, as these aircraft no longer experience design related accidents. However, it is intended to maintain safety of these aircraft by mandating an internationally-recognised set of industry design consensus standards (developed as part of the FAR Part 21 development process) and ensuring that LSA meet the consensus design standards. Since the aircraft are simple in design, CASA has agreed with the FAA conclusion that manufacturers can self-certify, provided operators and new entrants satisfy the licensing, certification and registration requirements contained in the current regulations.  Safety of LSA should either be maintained or slightly improved as a result.

Expected Impact on ICAO Compliance

5.30     In keeping with Australian obligations under the Convention on Civil Aviation, it is CASA policy to comply with ICAO Standards and Recommended Practices to the maximum extent practicable. However, there are currently no ICAO SARPs directly applicable to this area of regulation. The amendments to CASR Subpart 21.H proposed in Option 2 aim to ensure that the airworthiness acceptance criteria for LSA are generally consistent with the standards and recommended practices specified by the ICAO in Annex 8 – Airworthiness of Aircraft publication. Currently, Annex 8 does not cover aircraft that have a Maximum Take-off Weight (MTOW) of 560 kg.

Expected impact on the environment

5.31     The proposed changes to the current legislation will not create any discernible change to, or affect, on the environment.

Impact on Existing Regulations

5.32     Consequential amendments to the following Civil Aviation Orders are being made with Subpart 21H:

·          CAO 95.12 - Exemptions from Provisions of the Civil Aviation Regulations 1988 - Gyroplanes Having an Empty Weight not in Excess of 250 kg

·          CAO 95.12.1 – Two place gyroplanes - Exemption from provisions of the Civil Aviation Regulations 1988.

·          CAO 95.32 -Weight Shift Controlled Aeroplanes and Powered Parachutes – Exemptions from the provisions of Civil Aviation Regulation 1988.

·          CAO 95.55  - Certain Ultralight Aeroplanes – Exemption from the Provisions of Civil Aviation Regulations 1988

·          To allow for the unique airworthiness requirements of the LSA CASA is developing maintenance directions to be contained in CAO 95.56 (Exemption from Provisions of Civil Aviation Regulations 1988 Maintenance of Light Sport Aircraft and some experimental homebuilt aircraft).

Impact on CASA

5.33     CASR Subpart 21.H involves extensive regulatory development work compared to the status quo but will result in a much improved regulatory framework for administering LSA. Standards and certification requirements for LSA will have been consolidated into a single CASR Part, without need for exemptions, and will be able to take into account changes in LSA technology.  When the Subpart 21.H amendments come into effect, CASA will allocate CASA sport certification staff to higher priority General Aviation and Transport Certification tasks and other safety related issues. These staff can also participate in compliance activities such as auditing and supervising new manufacturers to ensure they satisfy the entry acceptance criteria.

5.34     In the unlikely event that a manufacturer can no longer support the continuing airworthiness of their LSA as a result of insolvency or a change of business activities, CASA will need to monitor the safety of these aircraft. However, the likelihood of this occurring is expected to be low.

5.35     CASA, in consultation with the industry, will be responsible for maintaining the list of LSA standards in the Advisory Circular. It is expected that from time to time later revisions of the design standards will be incorporated Advisory Circular as improvements in design and aircraft materials develop over the years.  CASA currently monitors all design standards, so the impact on CASA will not be changed.

Cost Recovery/Fee for Service

5.36     There will be no new or additional cost recovery charges or fee for service applied to the new light sport aircraft regulatory activity.  The 'hourly rate' charges currently applied under the Civil Aviation (Fees) Regulations will be retained and applied to this particular activity as per the existing Schedule of Fees.

5.37     It is expected that the 'Long term Funding Strategy' (LTFS) project currently underway in CASA will address any additional charges/cost recovery that may be applied to this particular activity and all others across the aviation system.  The LTFS project will involve consultation and the development of a CRIS as required by the Government.

6.    Consultation

6.1       In June 1996, CASA initiated the Regulatory Framework Program (RRP), which has as its objective, the complete review and revision of Australia’s aviation safety regulations. The new regulations are being called the Civil Aviation Safety Regulations (CASRs). Over time, the CASRs will replace all existing Civil Aviation Regulations (CARs). The CASRs are to be implemented on a segmented, ongoing basis over a period of two to three years. CASR Part 21 has already been made and implemented but has a space reserved for regulations on the certification of LSA, waiting for the FAA to implement LSA regulations, so CASA can introduce similar rules.

6.2       CASA is committed to working cooperatively with the aviation industry to maintain and enhance aviation safety. The CASA Standards Consultative Committee (SCC) is a joint industry/CASA forum, set up to involve the aviation industry formally during the development phase of regulatory material. The SCC brings together CASA staff and representatives from a diverse range of aviation industry organisations to work jointly during the development phase of regulatory material. The SCC examines proposed regulatory changes to determine if they are worth pursuing and assists CASA in the allocation of priorities to those projects. Aviation industry experts then work together with CASA staff in subordinate groups (SCC Sub-Committees and project teams) on the detailed development of regulatory material (both new regulations and amendments). A project team of CASA staff and experienced industry representatives were formed to develop the Australian airworthiness requirements for LSA, bearing in mind the US FAR Part 21 developments. This project team included CASA staff from Standards Division and Compliance Division, and representatives from the sport aviation industry.

6.3       As part of the RRP process, CASA released for public comment, Notice of Proposed Rule Making - NPRM 0313CS – Proposed amendment to CASR Part 21.H, Airworthiness requirements for Light Sport Aircraft on 25 June 2003. The NPRM contained proposed legislative provisions for the introduction of a new category of aircraft called LSA to give effect to Option 2, involving manufacturer self-certification. The proposal was to amend Subpart 21.H of the CASR and the CASR Dictionary to introduce a special certificate of airworthiness for production built Lights Sport Aircraft (LSA) and an experimental certificate for kit built LSA. The period for public comment on the proposals contained in NPRM 0219SS closed on 29 August 2003.

6.4       CASA received twenty-two responses to the NPRM including a number of substantive and comprehensive submissions. A few respondents addressed the Key Change Proposals listed in the NPRM (see the following table).  However, many respondents gave general comments or addressed specific proposed regulations. The CASA responses to these comments and the final disposition of those comments are contained in the Notice of Final Rule Making (NFRM) published on CASA’s website:

Table of Comments against Key Proposed Changes:

6.5       It can be seen from the table above that industry responses were largely favourable to the proposed Subpart 21.H, as could be expected given the benefits of the new approach. As a result of the comment received, some minor deficiencies in the proposed legislation and the Manual of Standards (MOS) were identified. (Note: The MOS was later deleted and replaced with regulations and an Advisory Circular refer to  paragraph 6.14) The key concerns raised were:

·      Will CASA transfer existing ultra light aircraft into LSA category? – Not straight away but this will be examined after implementation of CASR Subpart 21.H amendments. As the manufacturer is responsible for the continuing airworthiness of these aircraft and it is likely that many of these existing aircraft have been modified or not maintained to the manufacturer’s requirements, it may be impractical to transfer many of these aircraft to the LSA category as they would only qualify for an experimental certificate of airworthiness. This would reduce many of these aircraft

current privileges such as permission to conduct flying training.

·      Increase of the defined MTOW above 560kg – CASA has agreed to increase the MTOW for gyroplanes to 600kg, which coincides with the existing CAO 95.12.1 and BCAR-T standard.  CASA did not agree with a suggestion of increasing the weight to 750 kg. The ASTM standard design rules will be less onerous than BCAR-T. The FAA has increased the weight for all LSA to 600 kg to allow for certificated engines and 650 kgs for float planes. As a result, CASA will harmonise with the FAA. 

·      What is the validity of a CoA if a manufacturer fails to provide continuing airworthiness? - If the manufacturer can no longer provide continuing airworthiness support, the FAA system permits the manufacturer to transfer this to a suitable third party. CASR Subpart 21.H also allows this to occur, provided that the third party is acceptable to CASA. CASA has amended the Advisory Circular to ensure that this was clear.

·      Retractable undercarriages should be allowed - CASA disagreed. The intent of the LSA definition is that it will be a simple basic design. The extra weight required for retractable gears would compromise the structural integrity of the airframe. Also the retractable gear systems are complex to design, manufacture and maintain and may be complex to operate in flight. CASA determined that the fixed main landing gear is consistent with the philosophy of keeping light sport aircraft design and manufacture simple. It should be noted that the FAA does not permit retractable undercarriages.

·       Clarify the role of authorised representatives in ensuring LSA is in ‘safe condition for operation’ – CASA agreed to produce an Advisory Circular describing how an authorised person assesses that all the acceptance requirements are met and issues a CoA.

·      Increase FAA stall speed of 39 to 45 knots – design engineers argued that a stall speed of 39 knots was too low and would compromise structural density and gust penetration. Also, under CAO 95.55 many ultra light aircraft currently operate with a stall speed of 45 knots. As a result, it was agreed to adopt a stall speed of 45 knots.

·      Standard of qualifications of manufacturers is too low – CASA agreed to amend the  regulations to equate the standard similar to requirements of ISO 9001.

6.6       The CASA LSA Project Team reviewed all comments received, in conjunction with the relevant CASA Policy Sponsor. All members of the project team, including the industry representatives, reviewed the NFRM and it was agreed that all changes made by CASA as a result of the consultation should proceed. The amendments to CASR Subpart 21.H were subsequently revised by the Office of Legislative Drafting and prepared for final making.

6.7       The Certification Standards Consultative Subcommittee then set up a working group to review the draft Subpart 21.H regulations and MOS in accordance with the CASA CEO’s Directive 16/2004. The terms of reference for CEO Directive 16 were:

(i)            For each regulation, the intent is to address a known or likely safety risk

(ii)           Can the risk be mitigated by other means rather than a regulation?

(iii)          What is the extent of the safety risk each regulation/standard is intended to address and does it reduce the safety risk.  (The extent of the safety risk could be based on AS4360 risk assessment methodology).

(iv)          Is the regulation consistent with ICAO and with the Civil Aviation Act 1988?

(v)           Is the regulation harmonised with other FAA/EASA NZ/TC regulations?

(vi)          Is each regulation written in an outcome-based style specifying the safety outcome desired? If not, what is the safety justification for having the degree of prescription proposed?

(vii)         Are there standards that, for safety reasons, are better reflected in a Manual of Standards [MOS] than in the regulations? 

(viii)         Does each rule set (regulations and MOS) meet the ‘safety through clarity’ mandate?

6.8       A modified risk assessment model based on AS/NZS 4360:1999 risk matrix was adopted as the risk analysis method. The revised model was based on aviation terminology and therefore more relevant to known accident data and easier to apply.  The application of the modified risk matrix produced results that were consistent with the current aviation safety environment.

6.9       For each LSA regulation, the source of risk was identified and explained. The risk classification process was then applied to the regulations classified as safety based. Two risk classifications were made for each safety regulation on the basis of:

· Classification if no rule at all in was in place.

· Classification if the proposed Subpart 21.H rule was in place.

Each safety regulation was then assessed on the basis of:

·                    Does the risk classification without rule justify regulatory action and

·                    Does the proposed regulation reduce the risk and

·                    Does the proposed regulation comply with the Terms of Reference.

Recommendations were made to retain, amend or delete regulations on the basis of the assessment.

Findings of the CEO Directive 16 Working Group

6.10     The working group found that most regulations only mitigated the risk classification slightly. Generally, the light sport aircraft operations fell into the high or extreme risk classification due to the consequences associated with such an accident, even though the likelihood may have been remote. With the LSA regulations in place, the risk was reduced to high or medium risk classification.

6.11     Although the risk classifications were still high with a number of regulations in place,   it should be noted that CASA’s policy recognises that CASA as been established primarily to look after the interests of the travelling public and should devote resources accordingly. (See regulatory Policy – CEO – PN001-2004).  With this in mind, the LSA regulations were primarily aimed at harmonising with the FAA, devolving CASA responsibilities and hence relieving CASA resources for other higher priorities.

6.12     The working group agreed the regulations should be amended to fit into a two tier system. This would require minor amendments to the regulations which will delete the need for a MOS and advisory information could be included in an Advisory Circular instead.

Recommendations from CEO Directive 16 Working Group

6.13     The CEO Directive 16 Working Group made the following recommendations:

            (i)         The Manual of Standards be deleted.

            (ii)        Delete “Issue of MOS” regulation.

            (iii)       The manufacturer’s qualification be removed from the MOS and placed in the compliance statement regulation

            (iv)       Amend “Definition for this Subpart” Regulation to define LSA standards.

            (v)        An Advisory Circular will list the LSA standards

6.14     These recommendations were adopted. The MOS has been deleted and replaced with two Advisory Circulars (ACs), Light Sport Aircraft Certificate of Airworthiness AC21-41(0) and Light Sport Aircraft Manufacturer’s Requirements AC 21-42(0). The later AC lists all the LSA standards. The applicable regulations in Subpart 21.H were also identified and amended in accordance with the recommendations.

7.    Conclusions and Recommended Option

Costs

7.1       The costs of maintaining the current regulatory approach to the certification of aircraft eligible to be included in the LSA category are much higher than moving to manufacturer self type certification regulatory framework. In addition, the status quo restricts innovation in the light aircraft manufacturing sector, restricts access to the sport and aviation sector because of high aircraft costs, results in excessive delays in achieving certification of new aircraft types, and risks inhibiting access to the US and worldwide LSA markets expected to grow significantly after the FAA rules are implemented. 

Beneficial Impact

7.2       CASA considers that the amendments to CASR Subpart 21.H will have a beneficial public interest effect - not including significant improvements in avoidance of injury and fatalities – arising from a direct cost saving for the LSA manufacturing industry and indirect beneficial impacts on the sport aviation sector generally. These benefits include improving the entry process for LSA, establishing clearer regulatory responsibilities and requirements for the manufacturer, recognising Australian LSA manufacturers’ capabilities to ensure design standards are met and the ability for CASA to redirect resources to higher priority regulatory activities.

Harmonisation

7.3       Most importantly, harmonisation with the FAA rules will improve the access of Australian manufacturers to the large USA and worldwide LSA market, which is expected to grow significantly as a result of the FAA rule changes. The aircraft manufacturing industry is strongly supportive of the amendments as a result.

Safety Impact

7.4       Thriving businesses typically have more resources to put into systems to improve and support their products, and, in this case, could produce safer aircraft. A number of these manufacturers have argued that the rules will have a positive impact on their businesses both in the domestic and overseas markets. Although there would be some costs involved with manufacturers putting systems in place to type certificate and monitor and correct safety of flight issues, the benefits of self-certification and improved access to the US LSA market greatly outweigh these costs. Sports aviation bodies generally see this rule change an opportunity to decrease the cost of aircraft ownership and operation.

7.5       It is therefore recommended that the amendments to CASR Subpart 21.H be made as proposed.

Benefits

7.6       In summary, the benefits flowing from the amendments to CASR Subpart 21.H, are expected to:

·        Foster innovation in the LSA development and manufacturing industry;

·        Provide an economical means for manufacturers to obtain certification for light-sport aircraft;

·        Remove time delays associated with the regulator in obtaining certification;

·        Provide a reasonable and appropriate means to overcome the limits of the current regulations;

·        Eliminate the need for exemptions;

·        Allow CASA to put certification resources into higher priority areas;

·        Provide the sports and recreation aviators access to the sector with reduced financial barriers through reduced aircraft costs;

·        Break down historical regulatory barriers between sport aviation and general aviation standards; and

·        Harmonise with the FAA rules, thereby ensuring Australian manufacturers have unrestricted access to the US and worldwide LSA market.

8.    Implementation and Review

8.1       In accordance with CASA’s Regulatory Reform Programme (RRP), the proposed changes to CASR Part 21.H are expected to be submitted to the Governor-General, via the Minister for Transport and Regional Services in late 2005.

8.2       CASA’s Engineering Support Branch audits manufacturers of sport aviation aircraft as part of its wider program of aircraft manufacturer audits. CASA will conduct surveillance on manufacturers based on the qualification criteria contained in Part 21 whereby a manufacturer must have access to a CASR Part 146 engineering representative, have proper facilities tools and trained staff and a quality audit system.  The manufacturer’s ability to maintain continued airworthiness will by monitored by examining trends that become apparent in incident and defect reports. The requirement for defect reporting for LSA with CASR Part 47 registration will be the same as for other general aviation aircraft. Sporting organisations will be required to notify CASA of any concerns regarding the manufacturer’s responsibilities for continuing airworthiness.

8.3       The monitoring and review of the new regulations will be conducted on an ongoing basis during the implementation/transition phase. Thereafter, following the commencement of the regulations, monitoring and review will be conducted on an as required basis and (within 5 years), as required by the Government.