Accelerated depreciation rates needed to help level playing field for Australian aviation

Accelerated depreciation rates needed to help level playing field for Australian aviation

The Australian and International Pilots Association has called once again for depreciation rates on new aircraft to be accelerated to bring Australia into line with jurisdictions in which foreign competitor airlines operate.

“Qantas pilots have been pushing for accelerated depreciation rates as part of a package of measures to redress the imbalance in the international airline investment environment for two years,” AIPA President Captain Barry Jackson said.

“We have conducted this push without the support of Qantas management, however I was glad to see Corporate Affairs Spokeswoman Olivia Wirth making a similar call in today’s press.

“It currently takes 10 years for Australian airlines to write-off a new aircraft. While a reduction to a five-year write-off would at least match the rate available to Air New Zealand, it would fall short of matching the investment environment of the major international airlines flooding our market. For example, Singapore Airlines can depreciate its aircraft over three years.

“Accelerating our local depreciation rate would help Qantas - and indeed all other Australian international airlines – to compete against advantaged foreign competitors.

“After opening our skies to foreign airlines Australia should not make it even more difficult for our international airlines to compete through uncompetitive taxation arrangements.”

Captain Jackson called on policy makers to consider the consequences of allowing the current uncompetitive taxation regime to continue.

“We need to think of the impact on Australia’s national interest if we allow this nation to become a mere stop-over in an air transport system provided entirely from overseas,” Captain Jackson said.

“When Qantas CEO Alan Joyce grounded the fleet last year the effect was devastating. One shudders to think about a situation down the track when such a decision might be made by a CEO offshore without any redress in Australian courts.”