Calls for quicker aircraft depreciation

The Australian Government has been urged to reduce the write-off period for new aircraft as part of its moves to battle climate change.

Qantas has been battling for years to get depreciation rules similar to those enjoyed by its major competitors in Asia.

Australian airlines are forced to write off the value of their fleet over 10 years while Singapore has a three-year write-off period and Hong Kong can depreciate aircraft in five years.

The Qantas lobbying was rebuffed by the Howard government, but the airline went on to make a massive order for new fuel-efficient planes anyway.

But climate change may provide the environmentally sensitive Rudd Government with impetus to make the change.

Tourism lobby group TTF Australia says that reducing the write-off period would encourage the use of new aircraft and help reduce greenhouse gas emissions from the aviation sector.

It has argued for accelerated aircraft depreciation in its submission to the federal Government’s tourism action plan on climate change.

TTF national aviation manager Mark Dimech said reducing the write-off period would speed up the process of fleet replacement.

Dr Dimech said the 10-year depreciation scale meant Australian carriers did not have the financial incentives to reinvest in new aircraft at the same rate as their competitors. He said new aircraft were becoming more fuel efficient in response to higher fuel prices and growing community concern about climate change.

“The aviation industry has set aggressive target for reduction of greenhouse gas emissions, with goals to reduce fuel burn and carbon dioxide emissions by 50 per cent, nitrous oxide emissions by 80 per cent and noise by 50 per cent by 2020,” he said.

“To make this happen, however, we need a more realistic depreciation regime that encourages investment in new technology. Fixing the aircraft depreciation anomaly would be a positive step and would help reduce greenhouse gases from the aviation sector.”

Source: The Australian