Page 1

Why it’s tough going for Boeing THE AUSTRALIAN, MARCH 15, 2019 For an industry that prizes safety above all else, the response to the second fatal crash involving a near new Boeing 737 MAX 8 fell a long way short. Despite several striking similarities between the crash of an Ethiopian Airlines aeroplane last Sunday and the Lion Air crash five months earlier, Boeing and the US regulator refused to acknowledge what numerous other regulators and airlines thought was obvious. The common denominator in both crashes was an almost brand new aircraft with a feature Boeing itself admitted had not been fully explained in training manuals. In addition to that, both crashes occurred within minutes of take-off and in both events, the pilots had sought to turn back as they fought to control their aeroplanes. Neither made it, and as a result 346 people lost their lives. People from all over the world, travelling for all sorts of reasons, were taken from their families in just a few terrifying moments. As early details of the Ethiopian Airlines crash emerged, aviation safety regulators recognised it would be in the “best interests of safety” to ground the Boeing 737 MAX 8 until more was known. Just to be sure. But not Boeing or the Federal Aviation Administration. They allowed the planes to continue to fly in the biggest aviation market in the world — the US. Finally, four days after the most recent crash, it was US President Donald Trump who ordered the 737 MAX be grounded, recognising it would be safer for the aircraft not to be carrying thousands of passengers across the country. For Boeing at least, it has been a week to forget. When flight ET302 went down on Sunday, the aircraft manufacturer was just days away from unveiling its brand new aeroplane, the 777X in Seattle before dozens of international media representatives.

It took only 12 hours after the crash for Boeing to cancel the launch event. Officially, Boeing wanted “to focus on supporting its customer” — Ethiopian Airlines. In reality it would have been a public relations disaster to be seen celebrating a new plane at a time when another Boeing aircraft was under a cloud. Boeing would have also been acutely aware that aviation journalists attending the launch would have had more questions about the 737 MAX 8 than the new plane. To date, Boeing has provided limited opportunities to media to ask questions about the 737 MAX 8 and the aircraft’s controversial manoeuvring characteristics augmentation system (MCAS). Designed to automatically push the nose of the aircraft down, partly to compensate for larger engines positioned slightly forward on the plane, pilots have complained of not being fully informed about the system. Details really only came to light after the Lion Air crash. In the aftermath, it was revealed the pilot “fought with the plane” after erroneous information from angle of attack sensors triggered the MCAS to push the nose down. Unaware of exactly what was happening, the Lion Air pilot is thought to have responded in a way that only made the situation worse, ultimately resulting in a nose dive into the Java Sea. After the crash, Boeing defended its lack of information for pilots, suggesting they had enough data to troubleshoot the problem without knowing a lot about MCAS. Critics, including pilot associations in the US, Indonesia and Australia, expressed anger and concern at Boeing’s position. The Australian Federation of Air Pilots’ technical and safety manager, Marcus Diamond, said there should have been clear QRH (quick reference handbook) details on the memory items for a malfunctioning MCAS — but there wasn’t. “We are still a long way from computers being able to make complex decisions made by pilots,” Diamond said. Incredibly, it may not be the first time Boeing has been accused of failing to provide pilots with the “full picture” of a new aircraft.

In 1989, Boeing released its 737-400 model, which was considered to be so similar to previous models that pilots did not need extra training. However, the Kegworth air disaster proved this wrong when the pilots made the fatal error of shutting down the wrong engine when fire broke out. The pilots thought they were shutting down the engine on fire as smoke was filling the cabin, making them think it was the right engine — as earlier 737s ventilated the cabin from the right engine. But this had been changed to the left in the -400 variant and, with the good engine shut down, the plane eventually lost power and crashed on to a motorway embankment near Kegworth in England. Of the 126 people on board, 47 died and 74 suffered serious injuries in the crash. There are certainly no shortage of important lessons to be learned by Boeing ahead of the actual launch of the 777X. Not only does Boeing need to rebuild the confidence of regulators and airlines in its aircraft, it has to convince the travelling public the 737 MAX and its other new aircraft are safe.


Kowanyama airport gets new facilities New facilities at Kowanyama Airport will improve security, safety and efficiency, with upgrades coming off the back of funding through Round 4 of the Building our Regions program. The $1.03 million Kowanyama Transport Hub project – Airport Terminal Stage 2 is receiving $1 million from BoR, with Kowanyama Aboriginal Shire Council contributing $30,000. Kowanyama Ministerial Champion Mark Ryan said more seating, an undercover standing area, a secure undercover baggage area, disabled and baby-change facilities, and a kiosk and office space will all be delivered as part of the works. “Airports are particularly important for our very remote regions – reducing economic and social isolation for these communities, while allowing for better access to health, education and business services,” Mr Ryan said. Kowanyama Airport services approximately 500 passengers and seven tonnes of freight each week, so it’s crucial the facilities can comfortably accommodate this movement. “These upgrades will support three jobs during construction, while long-term they’ll benefit local residents, fly-in/fly-out service providers, including the Royal Flying Doctor Service, airline staff, and visitors to the region. “The project will also boost tourism and business opportunities, and builds on earlier airport infrastructure upgrades to the runway, fencing, car park and lighting.” Kowanyama Mayor Michael Yam welcomed the funding, and said the new airport terminal will be a great boost to the community and local economy. “Ensuring our passengers and visitors have the same facilities as other airports means we can promote our region more widely,” Mr Yam said. “The airport is crucial for all year access to our community. This funding will allow us to provide a first-rate passenger experience and will also enable our community to showcase arts and crafts to support the development of our local economy.”


Diatreme sells Tick Hill gold mine to Berkut An historic former gold mine near Mount Isa has been sold as part of a deal that will see the backdoor listing of a new mining entity. Mineral and silica sands miner Diatreme told the ASX Tuesday it had entered an agreement with Berkut Minerals to transfer more than 320 square kilometres of tenements including the historic Tick Hill gold operation. Tick Hill, 110km south-east of Mount Isa, was once one of Australia’s highest grade and most profitable gold mines but has largely been unexplored for two decades. Mining ceased in 1995 to a depth of 235m after 513,333 ounces of gold and 705,000 tonnes of ore was produced at a recovered grade of 22.6 grams a tonne gold. Diatreme bought the mine in 2015 and resumed exploration in 2016 under a Diatreme Joint Venture with Superior Resources but it 2018 it was announced they would sell out to a gold resources float called Carnaby Resources. Berkut has now entered a series of interdependent agreements where it will first acquire Carnaby and then execute a heads of agreement with Diatreme to buy out 100% of the legal assets and 75% of the beneficial assets. There will be another agreement between Berkut and Superior to obtain the remaining 25% of the beneficial assets. Berkut will be renamed Carnaby Resources following the purchase worth $562,000 in fully paid ordinary shares. Diatreme CEO Neil McIntyre said the deal gave itshareholders exposure to Berkut's gold assets while continuing to focus on its heavy minerals and silica sands projects. "Tick Hill is historically one of Australia's richest gold mines and with Berkut's experience in gold exploration along with rising gold prices offers great potential to deliver value for the shareholders of both companies," Mr McIntyre said. Berkut managing director Neil Inwood said the gold sector was enjoying rising investor interest due to high prices and solid consumption growth in Asia. "There is a well-defined exploration plan for Tick Hill and the broader area which is being consolidated for the first time in 20 years.," Mr Inwood said. "The company is in a strong funding position to pursue a focused and aggressive exploration program."

Franchise inquiry slams Retail Food Group A parliamentary inquiry says Retail Food Group should be investigated for a raft of possible infractions by the troubled company. Australian Associated Press, MARCH 14, 20194:02PM

Gloria Jeans and Donut King operator Retail Food Group has been slammed by a parliamentary inquiry over its treatment of franchisees, with management accused of being either "unethical" or "incompetent". The inquiry into franchising's final report said Retail Food Group should be investigated by the competition regulator, the corporate regulator and the Australian Taxation Office over a raft of possible infractions by the troubled company, whose share price has crashed 98 per cent over three years amid allegations it mistreated franchisees. "RFG has damaged the reputation of franchising more broadly within Australia," the bipartisan parliamentary financial services report released on Thursday said. The report recommended that regulators look into Retail Food Group and its former and current executives in relation to possible legal breaches, insider trading, short selling, market disclosure obligations, compliance with directors' duties, audit quality, valuation of assets, and tax avoidance. The inquiry found that Retail Food Group opened, closed and transferred about 200 outlets on an annual basis across three years, suggesting it knowingly engaged in "churning and burning" franchisees. Churning refers to the repeated sale at a site of a failed franchise to a new franchisee, while burning is continually opening new outlets irrespective of their viability or impact on existing sites in order to profit from upfront fees. Retail Food Group repeatedly refused inquiry requests for documents that could have shown whether it knowingly sold failed franchises and opened others knowing they would severely hit nearby outlets.

"One possibility is that RFG is seeking to avoid providing data that would in fact substantiate the allegation that RFG churned sites ... (and) if this is the case, then RFG may not only have engaged in unethical business practices, but may also have misled parliament," the report said. "The other possibility is that RFG, its board and management were incompetent." The inquiry was troubled by the effect a stock market listing could have on a franchise-based business, noting that maximising shareholder value can conflict with franchisees' best interests. The report said RFG acquired 10 franchise brands over seven years after listing on the ASX in June 2006 and that evidence suggested rapid growth at the expense of existing franchisees. That meant expecting franchisees to work copious hours as a means of free labour, while charging increased fees for reduced services. "Franchisors have spoken of the harsh realities of the current retail environment, and the particular difficulties involved in operating in shopping centres," the report said. "Nevertheless, it appears that RFG has operated a particularly unjust business model." The inquiry recommended the ACCC be given the power to prevent the marketing and sales of franchises if a company is shown to churn and burn. Retail Food Group, which will close 250 stores by the end of the current financial year, said it supported any changes that would benefit franchised businesses and that it took its legal obligations extremely seriously. "The current management team and board completely understand that RFG's future success is directly linked to the profitability of its franchisees," executive chairman Peter George said. RFG shares dropped as much as 7.7 per cent, touching the all-time low 18 cents first reached on Tuesday.

Profile for QAL Media Clippings