PRESIDENT S YEAR-END REPORT

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1 PRESIDENT S YEAR-END REPORT As 2014 comes to an end, I want to report to you on the work ATAC has been doing in the past year for its members, about our membership, our finances, and our organization. We maintain a strong and dynamic presence in Ottawa. The ATAC team has been hard at work overcoming regulatory, political, and level of service hurdles slowing your progress. We appeared before the, House Standing Committee on Transport, Infrastructure and Communities and met numerous times with the Minister of Transport and her staff. We represented ATAC members and promoted Canadian aviation internationally in France, the US, Great Britain, and China. To mark our 80 th Anniversary, we unveiled a new logo which symbolizes our values, our mandate and our strong national identity. Membership We have been successful in attracting many new members, both Operators and Industry Partners, over the past year and we will continue to do so. Our membership stands at 187, including 85 Operator Members, 90 Industry Partners and 12 Affliates. This is a net increase of 15 members over last year. A membership in ATAC is not only a wise investment but a way to share in facing the challenges of our industry. ATAC s strong membership continues to give your association the leadership it has enjoyed for 80 years. ATAC Finances ATAC s finances are in good shape. We budget very conservatively and are very responsible in our expenses as all of our revenue streams are vulnerable to the economic climate. We did not increase membership fees again this year. This marks the fourth year that our membership fees have remained unchanged. Communicating with Members We are constantly trying to improve communications with you and the other aviation stakeholders. We have been monitoring our Web page traffic and our Twitter account for the last year in order to better measure the response to our internet activity. We are making better use of the social network in order to communicate with the aviation community both in Canada and abroad. We have an increasing number of followers and our web site, the focal point of our internet activity, is receiving a growing number of hits on a monthly basis. We continue to hold monthly Board Conference Calls and quarterly Member Calls. In an effort to maximize efficiency and lower costs, we will be transitioning towards webinars for these calls early in 2015 and the platform we have chosen will be free of charge to you and does not require that you download any kind of software in order to participate. This will allow a much more dynamic exchange for everyone participating.

2 Issues at the Forefront ATAC is working on a great number of issues for its members. There are many issues of importance. I will address the major ones. Flight Crew Fatigue Risk Management and Flight & Duty Times Flight Crew Fatigue Risk Management and Flight & Duty Times have been the major regulatory issue being addressed this fall. An NPA was issued in September and ever since ATAC has been working hand in hand with our members to quantify the impact and also to formulate reasonable alternatives. One key message that comes out loud and clear is that with the SMS regime in place, our operators already have an excellent mechanism to deal with Fatigue issues. Our 705 operators that have had SMS since 2005 know this well as do many other forward thinking operators who have implemented SMS concepts voluntarily! Levels of Service ATAC continues to strongly advocate that Transport Canada add much more focus to the poor Levels of Service being achieved in certain areas, especially with regards to approving manual amendments and pilot licences. We are hoping that a related pilot project will get the go ahead imminently! Monthly Committee Conference Calls All members are encouraged to participate in the Monthly committee conference calls for Flight Ops, Cabin Ops and Tech Ops & MRO committees. NAV CANADA ATAC and its members are key participants within the many NAV CANADA consultative opportunities. International Representation ATAC is well-represented at international forums where regulatory issues affecting our members are addressed. The focus is on the major regulatory authorities, TCCA, US FAA and European Aviation Safety Agency (EASA). ATAC advocates for positions appropriate for our members after consulting with our membership via our active committee structure. Harmonization amongst the three majors is our normal goal however certain issues require different approaches and solutions such as Mandatory Drug and Alcohol testing. MRO ATAC and its MRO Committee provide a national leading role in facilitating international marketing for the Canadian MRO industry, much of which consists of ATAC Industry Partners. Cabin Operations Committee Over the past year, the ATAC Cabin Operations Committee has addressed critical CTA issues including Passenger Accessibility using animals for disability assistance, as well as with the Health Agency of Canada issues related to passengers and crew members. GHG Emissions ATAC continues its support of the current voluntary regime of gathering GHG emissions data from our operators. The 2013 reporting year included the largest number of ATAC operators ever, 14. We encourage even more to work with us and TC to continue with the voluntary approach! All of this assists us in countering those that wish to see a more bureaucratic regime as has evolved in Europe.

3 F.A.A. Overflight Charges The U.S. Federal Aviation Administration has, since 2003, levied a charge upon airlines overflying the U.S. enroute to non-u.s. destinations. ATAC has twice successfully sued the F.A.A. over the charges. ATAC settled with the F.A.A. on the last occasion and negotiated a government/industry committee tasked with recommending any changes to the charges. The committee (including ATAC) met this year and the final recommendation allowed for a small increase beginning in The increase was a fraction of the increase F.A.A. was looking for. Ontario Fuel Tax Increases The July 14, 2014 Ontario Budget included provisions for four annual increases of one cent per litre in addition to the existing 2.7 cents per litre in aviation fuel tax. We believe that the tax will be the highest in North America. ATAC is committed to rolling back the tax as it will: Negatively impact remote communities; Render airlines and flight training establishments non-competitive vis-à-vis US competitors; and It will encourage more Ontario travellers to fly out of US airports. Canada Transportation Act Review The Minister of Transport announced a statutory review of the Canada Transportation Act. The review will be conducted by a secretariat headed by David Emerson. The mandate issued by Minister Raitt is broad and includes more than just the Act, as the secretariat will look at other transportation issues including the competitiveness of the industry. ATAC will submit its concerns high-lighting the impact that taxes and user charges have in impeding the air transport industry. Another theme which will be presented by ATAC is the inherent unfairness of the treatment of passenger rail in Canada vis-à-vis the air transport mode. Complaint with Competitions Tribunal Over Deicing Costs ATAC filed last month a complaint with the Commissioner of Competition regarding the allocation of deicing costs on behalf of certain members of ATAC. The complaint cites abuse of dominant position on the part of two airlines SMS Toolkit An ATAC member survey conducted last Spring indicated that we should look into the development of an on-line SMS course that would save money and travel time. The survey also showed that there should be educational focus on accountable executives and senior managers. Unmanned Aerial Vehicles ATAC has been briefed by Transport Canada on new exemptions for UAV operators in two weight categories under 2 kg and 2-25 kg. The regulator and the UVS (Unmanned Vehicle Systems Association) have both agreed that education of UAV operators is a priority and support the ATAC member companies on the development of courses. Foreign Student Study Permits Quebec is not included on the current Designated Learning Institution list because the criteria are under development in the province and are not expected until next year.

4 Private Career College Regulation (BC) PICTIA and its board are now dissolved and ATAC has submitted its comments in collaboration with the Helicopter Association of Canada and will be involved in consultations in the development of a new proposed Legislative Framework. Instructor Guide for Commercial Pilots The Instructor Guide for Commercial Pilots is now completed and consists of over 1000 pages of text divided into modules. The Guide will provide the road map to creating a robust curriculum that meets industry standards. Price Options are being finalized with the CCAA as we hope this important tool will soon be available to you. ATAC Group Insurance Plans We are not satisfied with the number of ATAC members taking advantage of the ATAC Employee Benefits Group Insurance Plan. We are looking to revitalize this excellent plan by a more aggressive marketing plan. Consequently, a select few insurance brokers who can connect nationally with our members and grow the base of the plan have been asked to submit proposals on managing and growing the plan. A decision will be made before the end of December. Chinese Students Insurance Coverage ATAC-Civil Aviation Administration of China Approved schools are looking for extended coverage for Chinese Airline cadets to include life insurance, health insurance and training completion insurance while in Canada under contract to the Canadian Flight Schools. Global Opportunities for Associations 2014 ATAC is successful in outreaching to the Civil Aviation Administration of China in Beijing and Shanghai and the regulator in Hong Kong through two trade missions in the past year. Visits to the Singapore Air Show and visits to Hong Kong and Mainland China have allowed us to meet numerous aviation companies seeking partnerships with Canadian flight training organizations. ATAC participated in a second mission to Shanghai just two months ago in order to attend the CAAC summit on ab-initio training and to learn about future trends for pilots in China, General Aviation opportunities for ATAC Members and to meet the head of the General Aviation Division in the Department of Flight Standards in China. A Memorandum of Understanding was signed between ATAC and the Shenzhen Aviation Transportation Association (SZATA) with the purpose of creating opportunities to link SZATA air operators to ATAC flight schools. Dangerous Goods Proof of Classification ATAC acted on behalf of industry to get relief from an unrealistic requirement to classify all dangerous goods handled. The intent is to close the information gap for TC inspectors however it is neither realistic nor required by any other regulators in the world. We have agreed that a request for proof of classification, by exception is feasible. In closing In closing I want to say that the ATAC mandate is clear. It is to support our members in their continued commitment for a safe, world-leading and sustainable Canadian air transport industry. ATAC is here to help you. ATAC is your voice and your team in Ottawa.

5 On behalf of everyone at ATAC, I want to offer each and every one of you a joyful Holiday Season and a healthy and prosperous New Year. John McKenna President and CEO Air Transport Association of Canada

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