Good afternoon and thank you for the opportunity to speak to you today.
I've been a Minister for just over 12 months now and I'm loving the role.
As well as Associate Transport Minister, I'm also the Associate Minister of Justice and the Minister for Internal Affairs, the National Library, Archives New Zealand.
So that covers a very wide area - gambling, passports, fire service, JPs, and transport safety, to name just a few areas.
I've enjoyed building strong relationships with the aviation sector.
I understand this is the 60th conference the Aviation Industry Association has held. Congratulations on a great achievement.
This shows the longstanding and vital role that aviation has played in New Zealand's economy.
A recent report from New Zealand Trade and Enterprise shows that aviation contributed around $9.7 billion to our GDP last year, representing 6.9% of the whole economy.
The report is called "New Horizons" and it details how innovation and new technology have driven growth in the industry.
Your industry employs over 23,000 people and has grown on average 9.5% over the last five years.
New Zealand companies are exporting to the global market in areas as diverse as training, aircraft design, airport systems and advanced rocket technology.
Aviation produces high-value products and services, and high-value jobs. This is exactly where the Government sees New Zealand's future.
For this reason, last month my colleague Gerry Brownlee - the Minister of Economic Development - lead a Ministerial mission to the 2010 World Expo in Shanghai, China.
He took with him some of New Zealand's leading aviation companies to develop long-term relationships with Chinese agencies and companies.
China is already the world's second largest air travel market, and this presents major opportunities for New Zealand.
Clearly aviation makes a major contribution to the economy, and I believe it has an exciting future.
Today I'd like to discuss a few important issues facing your industry, and give you an update on government policies that affect you.
State of the aviation industry
As we all know, the global recession has had a big impact on the airline industry and it's been a tough couple of years.
Particularly with regards to tourism, the key indicators suggest that recovery from the recession will be a gradual process rather than a quick rebound.
However, international arrivals over the past year - to the end of April - were up 3.1% to 2.5 million visitors, which is good news.
Australia and United Kingdom remain our key markets and people travelling from Australia to visit friends and relatives in New Zealand are the strongest segment of that market.
I'm sure you know that the Minister of Tourism also happens to be the Prime Minister, and as part of the Budget this year he announced $30 million in new funding for tourism.
$25 million of this will go into overseas marketing to encourage more visitors here, with Australia as one of the main targets.
Of course next year's Rugby World Cup offers a major opportunity and challenge for the industry to take advantage of the biggest sporting event this country has ever hosted.
A total of 85,000 international visitors are expected here and the aviation industry will play a key role in transporting these people to and around New Zealand.
Government aviation initiatives
There are some important issues the government has been working on that will help your industry.
Recently the Transport Minister Steven Joyce announced a reduction in the international aviation security charge paid by out-bound airlines.
This is being reduced from $15 to $10 per departing international traveller, while the charge for domestic travellers dropped slightly from $4.66 to $4.35 (including GST).
The Aviation Security Service had built up large surpluses from this charge since it was last increased in 2007. By the end of March this surplus was sitting at close to $35 million from international security charges, and $6.5 million from domestic charges.
This level of surplus was unfair on airlines and the travelling public. It's not very often the government can reduce a charge of this kind so I'm pleased we've been able to do this.
I'm pleased to inform you that New Zealand formally acceded to the Cape Town Convention and the Aircraft Protocol on 20 July (or last week) and these treaties will come into force for New Zealand on 1 November 2010.
This is great news for the industry and I know the AIA has supported New Zealand's signing these treaties since it was first proposed a few years ago.
This will reduce the cost of financing for companies purchasing and leasing aircraft, and the benefits will be in the millions of dollars.
Air New Zealand has previously announced the purchase of 23 new aircraft over the next six years.
Your organisation has forecast that the rest of the industry could acquire some 160 aeroplanes and over 400 helicopters in a similar period.
Potential savings in finance costs over this period are estimated to be between $18 million (for reductions in the cost of export credit guarantees) and $325 million (on loan interest rates).
This is great news for the industry and I know the AIA has supported New Zealand's signing these treaties since it was first proposed a few years ago.
Civil Aviation rule changes
In December last year the Civil Aviation Rule Part 21 came into force which allows the commercial operation of different types of aircraft, such as light sport aircraft.
The proposed Part 115 Adventure Aviation Rule will further increase the types of aircraft available to be used for commercial aviation.
Since the mid-1990s there has been major growth in the numbers of ex-military and vintage aircraft in New Zealand for private and display use, and increasing demand for sport and recreational aircraft for adventure aviation.
Looking further afield, the Ministry of Transport is about to begin work on a review of New Zealand's international air transport policy.
We want to ensure it is supporting economic development and that regulatory frameworks are responsive and flexible to change.
Our international air transport policy was established in 1985 and restated in 1998. The 1998 policy set out the overall objective of air transport as being to maximise economic benefits to New Zealand, including trade and tourism, consistent with foreign policy and strategic considerations.
This has resulted in the most liberal and flexible air services arrangements possible with other countries, and a whole range of new agreements over the last 25 years.
This has meant increased opportunities for airlines, more tourists into the country and it has helped many New Zealanders see the world.
It's been a dramatic few decades for the aviation industry. We've seen rapid growth and expansion, but we've also had global challenges such as terrorism, pandemics, volatile fuel prices and the worst recession in generations.
We've also seen continuing expansion of global airline alliances, and a trend towards regional, rather than bilateral, air services agreements between governments.
Given all this, we think a review of the current policy is timely.
Civil Aviation Authority
I understand today you've heard from Steve Douglas, Director of the Civil Aviation Authority.
I'm sure you're aware of the report by the Office of the Auditor-General into the Civil Aviation Authority, looking at its certification and surveillance processes.
The report made 14 recommendations designed to strengthen the CAA's processes and the government has made it clear it expects to see these recommendations carried out promptly and in full.
CAA will be following a detailed work programme and the CAA Board and the Ministry of Transport will be making quarterly updates to the Minister of Transport.
It is important to note that the report was not concerned about the general safety of the New Zealand aviation system.
However it is essential these recommendations are acted on swiftly so the public can continue to have faith in the ongoing safety of our aviation system.
Three new appointments were made to the Board last month. Peter Griffiths, Anita Mazzoleni and John Bartlett all have a mix of skills and experience that will drive continued cultural change and increased efficiency at the CAA.
As well as those recommendations, the CAA also has a lot on its plate with a full review of fees, charges and levies and a value for money review.
Safety
Earlier this year I pleased to announce new initiatives to improve the monitoring of commercial pilots with drug and alcohol issues.
The CAA will be carrying out random checks on the criminal records of pilots and are developing an electronic database to monitor trends in this area.
While New Zealand has a strong, safe and reliable system for monitoring of pilots, these changes will further improve public confidence and transparency.
On that note, can I congratulate you on New Zealand's excellent safety record.
Over the last five years there have been no fatalities among fixed wing commercial operators carrying nine or fewer passengers. The same goes for commercial helicopter operators.
Let's hope we can keep it that way.
Operators have clearly invested a lot in their safety practices over the years, and this is a record to be proud of.
Conclusion
What the last few years have shown is that the aviation sector is resilient, and that it still has an exciting future.
Can I congratulate you again for 60 years of representing your industry, and I look forward to building on the good relationship you have with the government.
Thank you.