2. Contents
New Vision Statement 1
Acknowledgments 2
Executive Summary 3
Section 1. From The Beginning 6
Section 2. Houston We Have Several Problems 10
Section 3. Tough Love 11
Section 4. A New Dawn, A New Day 23
Section 5. Design, Build: Let’s Move! 33
Afterword 38
Appendix A. Review of the July 2011-June 2012 Annual Report
of the Royal Aero Club of Western Australia (Inc)
39
Appendix B. AOPA (U.S.) 2012 PPL Survey 45
Appendix C. ‘Lightbulb’ Suggestions From One-On-One Respondents 46

3. Page | 1
New Vision Statement
“To serve people who love general aviation so they can
pursue their passion with fun, community, affordability and
the highest quality of training and safety standards.”

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Acknowledgements
Thank you to all RACWA members, Committee and staff from Accounts,
Administration, Flight Instruction, Maintenance and Management and WAAC Staff and
Students for participating with enthusiasm in the one-on-ones.
Your willing participation, insight, genuine passion and positive suggestions were
extremely helpful in my Primary Research.
Thank you also to the following people outside of RACWA/WAAC who participated in
one-on-ones as part of my Secondary Research:
 Steve Blonstein, General Manager, West Valley Flying Club
 Michael Buckmaster, Charted Accountant, FCA, FCAS, GDACG, Michael
Buckmaster & Associates
 Des Byfield, Regional Manager, Operations Western Region, CASA
 Allan Chang (retired), Squadron Leader and Instructor 1974-1999 Royal Singapore
Air Force
 Airline Liaison Manager 2006 - 2008: Flight Training Adelaide
 Brian Collingridge, Proprietor, Air Ads
 Ian Coxall, Check and Training, Skippers Aviation
 John Fraser, General Manager, Jandakot Airport Holdings
 Ben Low, F50 Captain, SkyWest (Virgin Australia), RACWA/WAAC Graduate
 Phillip Murdoch, Partner, Audit, BDO Australia
 Terry Robinson, Check and Training, Royal Flying Doctor Service
 Steve Shircore, Senior Partner, Meyer Shircore & Associates Architects
 Adam Smith, Senior Vice President, Centre for the Advancement of the Pilot
Community, Aircraft Owners and Pilots Association (U.S.)
 Kingsley Sullivan, Founder and ex Proprietor, New Norcia Bakeries
 Ryan van Dongen, Pilot, Royal Flying Doctor Service, RACWA/WAAC Graduate

5. Page | 3
Executive Summary
Having the opportunity to facilitate a new Strategic Business Plan for the Royal Aero
Club of Western Australia (Inc) and the Western Australian Aviation College has been a great
privilege. At the outset I gave a pledge to the General Manager, David Currey, that although
my undertaking was to be pro bono I would approach it with the same professionalism and
commitment he would expect from a fee remunerated consultant. I believe I have done this.
I came to this project with a lifelong love for aviation. When I was seven years old,
my Dad and I would come out to Jandakot every second week and thoroughly enjoy
watching the planes. We would have afternoon tea at the Club and listen quietly, enthralled
by the chat of the pilots. To me pilots were like gods. I loved RACWA then and I still do.
I began as a PPL student at RACWA in February 2012. When I began this strategic
plan I had 35 hours up, including three hours of solo, and a BAK pass.
I am also a seasoned businessman. I know the importance of separating emotion
from the sometimes hard reality of economics, but I have also discovered that if the dream
is big enough there is always an economically sustainable way to make it happen.
Before considering a solution to the club’s problems I needed to learn more facts
about the actual situation.
Primary Research
I undertook 61 in-depth “one-on-ones” with staff, committee and members,
including two Past Presidents. This gave me a three-dimensional view of the ‘real’
RACWA/WAAC. To my amazement I found a complex mosaic of views and responses that
did not reveal any consistent picture or pattern. One thing, however, was for sure: everyone
acknowledged problems and issues but no one had a real solution that they would bank
their house on. It seemed that for the respondents, the problems were beyond repair and
the general attitude was, “We’ll just keep on keeping on until something happens” or “It will
eventually sort itself out” or “It’s only a matter of time before the door shuts”. There was,
however, one clear and loud common denominator - everyone loved RACWA.
Secondary Research
In order to gain a non-emotional and balanced view of the future of commercial
aviation (airlines and GA) and recreational aviation (GA and LSA) I sought qualified
perceptions from aviation and non-aviation professionals outside of the Club and College,

6. Page | 4
some with Club and College affiliations and so me without. I believe I chose my respondents
well, speaking to professionals at the top or close to the top of their game.
I also carefully scrutinised Wings of Change: The Royal Aero Club of Western
Australia 1929-1999 by Cyril Ayris. My take on this was that when one researches and writes
about the past, from 1929 to around 1960, that author would be mostly reliant on
photographs, letters, paperwork of the times and newspaper articles. From the 1960s
onwards, however, I saw a predictable first-person freshness in the depiction of events,
happenings and strategic and managerial decisions and was able to put together in my mind
the early culture of the Club and how it has evolved to date. The book helped me to study
and question more recent Club decisions and their associated successes and failures.
I have also researched Sir Norman Brearley, specifically the character of the man and
why he was so successful in aviation and community service. I asked myself what he would
do if he was at the helm today.
Further to this in-depth research, I have:
● studied and sought outside qualified opinion on the current financial health of
the Club and College to date;
● found an aero club with over 45 planes that has risen out of difficult
circumstances (similar to our own), is thriving in today’s climate and is very open
in sharing their success story;
● blueprinted the beginnings of a “just survive to thrive” plan based on The E-
Myth Revisited and the tried and proven Seven Centers of Management
Attention by small business legend and author, Michael Gerber;
● sought the wisdom of change management expert Dr John Kotter, the Konosuke
Matsushita Professor of Leadership, Emeritus at the Harvard Business School,
and his ‘8-Step Process of Successful Change’ for any organisation facing tough
circumstances; and
● brought to the mix my own experience of success and failure in my 30+ years of
business and life outside of business.
Most importantly though, I bring hope; hope that encompasses our collective love
for aviation; hope that is based on deep and scientifically thorough qualitative and
quantitative research, accurately interpreted and translated into a solution that is realistic
and possible. That solution will inevitably bring pain along the way. It is not based on
convenience; it comes directly from a crystal clear, heartfelt vision that is genuinely shared
by the Committee, the General Manager and the members.

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I see these options for RACWA/WAAC:
1. reduce the current loss-making situation and wind up both organisations now,
2. continue trading in the present loss-making form and fall into receivership at
some stage in the future, or
3. systematically, with united urgency, pursue in full the recommendations
reported in this Strategic Business Plan.
My recommendation is for you to choose the third option. It is a solution that will
enable West Australians to continue their dreams of taking to the skies with fun,
community, affordability and the highest standards of quality training and safety.
JAMES BENJAMIN B.Bus (Marketing)
Strategic Business Consultant

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Section 1. From the Beginning
The Power of One
Sir Norman Brearley came from humble beginnings as a tanner’s son. When he was
16 his family moved from Geelong to Perth where he studied mechanical and electrical
engineering at Perth Technical College. He was fascinated by flight and dreamed of learning
to fly. Entrepreneurship, innovation and a burning desire to make a commercial success of
the fledgling aviation industry were his destiny.
He had a courageous “never give up” style. In WWI, after fearlessly attacking seven
enemy aircraft, he was shot down in no-man’s-land and managed to crawl back to the
British trenches with bullet wounds that perforated both lungs. He was awarded the
Distinguished Service Order in 1917. After been sent back to Perth on sick leave from the
RAF and determined to be medically endorsed to fly again he started a rigorous fitness
campaign, swimming in the City Baths on the Swan River to improve his lung capacity.
On his return to England to become a flight instructor at the Midland Area Flying
Instructors School, his leadership prowess emerged and he quickly earned command of the
school. He was promoted to major just before the war ended and by June 1919 found
himself on the Unemployed List.
He foresaw a peacetime aviation career back in Australia and, being the
consummate opportunist, came back with two war surplus Avro 504’s in crates. He offered
joyrides over Perth. His infectious style and a keen eye for the right people in the right
places won him a new contract to provide an airmail service, first between Geraldton and
Derby and later to Perth.
The new venture was named Western Australian Airways Ltd. (WAA). According to
Ted Fletcher’s presentation to The Old Fliers Group, Brearley was very much an intuitive
wheeler and dealer and forever testing the boundaries of the DCA at the time.
Soon after the start of the airmail service one of his Bristol Tourers stalled and
crashed near the Murchison River station homestead, killing the pilot and mechanic. Within
days Brearley was on the scene. He was so upset that his emotions got the better of him and
he cried loudly and uncontrollably. The next morning he was up at first light as if nothing
had happened, optimistically dismantling the wreckage to truck back to Geraldton. Within a
month the same aircraft was airborne and in service.
His canny spirit was the hallmark of WAA. It was displayed when a prospective
passenger arrived to buy a ticket to travel from Broome to Port Hedland, only to find the
next flight fully booked. In such circumstances Brearley had instructed his pilots to sit an

9. Page | 7
extra passenger on the wing, clasping a spar, and this is exactly what happened. Crazy as it
sounds this was normal for the day and how things were done during the war.
Surely the anxiety of losing two of his crew and the searing hot northern cyclonic
summer weather making flying dangerous and often impossible would have been enough
for him to give up and slip back into mainstream and settle for a secure engineering job
without the never-ending trials and challenges of early General Aviation. But he was
energised by an extraordinary vision: he could see the size of Australia being significantly
reduced using scheduled aircraft services. He was the right man at the right time in the right
place!
Sir Hudson Fysh, founder of QANTAS wrote, “It must be recorded that Norman
Brearley had established the first well organised air transport operation in Australia in 1921
and his operation was superior to our own more groping endeavour. He showed us all the
way.”
Imagine if we could lean on the wisdom and guidance of Sir Norman Brearley today.
How would he help us navigate through these difficult and stormy grey times of survival to a
new era of prosperity and blue sky?
Why has the Aero Club lost its way after experiencing such success?
Let’s do some detective work and track and study the strategic thinking behind the
decision-making over the last 20 years.
“...But the memories are still raw among older members who look
back to the times of near insolvency and dissension like the survivors of
the war or the Depression. It happened once, they think. Can it happen
again?
Yet it is because the Aero Club had such terrible experiences that it
is unlikely to suffer the same again, at least in the short term. That is
because the people running the show know all too well what happened
and, more importantly, why it happened.
Douglas said in one of the interviews for this book: “We must never
repeat the mistake of failing to look after the members, of giving them
what they want or of looking after their needs.”
If that philosophy holds firm it is difficult, in 1999, to see anything
but expanding horizons. There will doubtless be ups and downs in flying
hours and revenues but there is no aviation organisation in the nation
better placed to enter the 21st Century than the Royal Aero Club of
Western Australia.”
Wings of Change 1929 - 1999 by Cyril Ayris, p. 146

10. Page | 8
There are two areas of interest here:
1. People at the helm who have endured disaster have learned to move forward
with thorough due diligence/risk assessment. Sadly, people at the helm who have
not endured disaster often move forward unaware of the need for due
diligence/risk assessment and unwittingly lead the organisation toward disaster!
2. Members of an aero club must be treated with absolute priority; they must be
informed of all major issues before corresponding strategic decisions are made.
Towards the end of the 1990s we can see a cultural overconfidence, an arrogance
synonymous with those who inherit genuine success from the previous generation:
“Because we are the Royal Aero Club and all we’ve known are the good times, whatever we
put our hands to will always turn to gold”. There was a broad RACWA culture of excitement
based on past, ongoing success and the coming new millennium. All quite normal and
understandable human behaviour.
Opportunity, opportunity, opportunity
There seemed to be a (somewhat self-imposed) expectation on the leaders to
continue to raise the success bar in a future ballooning with opportunity: rapidly advancing
aviation technology, the increase in demand for new commercial pilots - in part due to the
emerging LCC models, the burgeoning middle-class in China and Asia and the new corporate
flying academy model (as distinct from the traditional aero club model). In addition, don’t
we all like to put our unique thumbprint on the operation not long after we’ve arrived, just
to show the people that matter that we have actually started to do something?
This is not an exercise in blame; that’s already been done more than enough. Before
we can move on, however it’s imperative to focus on normal human behaviour in its
historical context so we can gain an objective view of why things have happened. Then we
can incorporate these errors of judgement into our Vision Statement so present and future
leaders will always be reminded where the “no fly zones” are.
There could be argument to say that 20/20 hindsight is easy. Well, the fact is that
leading and running any organisation of more than three staff today is a highly complex
affair and calls for business smarts and savvy in a host of disciplines. It’s no longer “try this
and try that” and hope for the best. The mortality rate for small to medium-sized businesses
today is horrific. Of the 100 businesses trading today, 80 will be gone within five years. Of
the 20 left, another 16 will be gone ten years from now; four businesses will still be trading,
two of those will be just breaking even and only two out of the original 100 will be making
good profits. If they are to prosper, the successful small business of the future - of any size -

11. Page | 9
will have to be led and managed by qualified and experienced individuals of the highest
calibre. The “winds of change” are here to stay.
Pioneering is risky
In aviation or elsewhere, it has a high mortality rate. Look back at the beginnings of
aviation. To have a slim chance of success as a pioneer you have to have a leader like Sir
Norman Brearley. But the reality is that these sorts of people are extremely rare. We are
fortunate to have such a man as a pioneer of our industry, but it's unrealistic to expect the
same results from every leader. We will need a carefully thought out plan and a
commitment to its execution to achieve the success that currently eludes us.
The future successful business will gain its strength by knowing why it became
successful in the first place. It will look for ways to get better at what it already does. This
will allow it to dominate the niche market it already operates in. Done correctly, a potential
competitor won’t have a look in. The business will be much more market orientated; it will
put its target audience first and then design the appropriate business model, rather than the
other way around.
Opportunities for diversification must be methodically tested and measured,
qualitatively and quantitatively, to prove if they really are opportunities and not disasters in
waiting in a “too good to be true” disguise. The future of informed strategic business
leadership and management, regardless of business size, has arrived - whether we like it or
not! Like never before, the game has advanced on every front.
RACWA must gain a better understanding of its members and their needs and wants
in order to effectively judge the merits of perceived opportunity.

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Section 2. Houston We Have Several Problems
At my request, trusted business colleague and charted accountant Michael
Buckmaster FCA conducted (pro bono) a very recent ‘Review of the July 2011–June 2012
Annual Report of the Royal Aero Club of WA (Inc)’. For the entire review please see
Appendix A.
Review Summary
“This review is not an audit, but a high-level analysis to identify issues and concerns
which may be of relevance to…the development of the new Strategic Business Plan…Based
on my review of the Annual Report and most recent Financial Statements, I conclude that
RACWA is in a precarious financial position.
In recent times, RACWA has been reliant up on the sale of surplus property to
remain afloat. Relations with the bank are strained. Significant cost-cutting has been made
to curb the haemorrhaging of cash. Time will tell if this has been sufficient.
The accounting records are in a mess, as evidenced by the substantial write-offs of
inter-company balances. Business as usual is no longer a plausible option.
Serious priority needs to be given to the following issues:
 Following through and taking every reasonable step to facilitate the completion of
the sale of lots 4 & 6 (four months behind schedule).
 Detailed and accurate forecasts (profit and cash) need to be prepared to ascertain
RACWA’s ongoing working capital requirements.
 Ensure that all principal and interest repayments are made on time.
 As soon as funds permit, clear up the backlog of creditor payments and return to
agreed payment terms.
 Appropriate steps are taken to improve the quality, accuracy and timeliness of the
accounting records and competency of accounting personnel.
 A critical analysis of the ageing fleet and associated inventory of spare parts be
undertaken to determine its remaining useful life and plans be prepared for its
eventual replacement.
 Once the first two actions have been executed, a meeting be scheduled with
Bankwest to inform them of developments and secure their ongoing support
 A review of the advice on tax exempt status needs to be revisited together with
documentation of the group structure identifying who owns what and what sits
where to identify any other potential tax liabilities.
 James Benjamin and David Currey meet with BDO to glean from their experience in
dealing with aero clubs elsewhere within Australia (in particular, Queensland)
 Resolving future direction and strategy and ensuring that the right people are on
board. This will be an outcome of your review and plan.
Michael Buckmaster FCA
16th April 2013”

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Section 3. Tough Love
RACWA/WAAC
Is it RACWA or is it WAAC? Is it both? If it is both, then which one does what? Which
one is the boss? Does one report to the other? Why are there two? Obviously one is a club,
so what is the other? If it is a college (and its name says it is) it must be some sort of
business entity. Business entities report to owners, right? Maybe it is owned by the club?
But that doesn't make sense: how can a club own a business when no one owns the club?
A commercial business has a board made up of seasoned and savvy business
professionals who have specialised business and commercial skills and qualifications. They
have the best chance of maximising shareholders’ return with the least amount of risk,
right? How does a business operate to its maximum efficiency and transparency when it has
no qualified board to be accountable to? How can a commercial operation be at the top of
its game when its sole parent is a not-for-profit club whose board – wonderful, well
intentioned people though they may be - have come together not because they love
engaging in the “rough and tumble” of business but where their commonality is the love of
flying and teaching flying? This motive is fine for a club. It is totally inappropriate for
business, however.
It is impossible for this divided entity to continue. We have a flawed and flaky
business model that will not succeed. Like trying to mix kerosene with water.
The terminal symptoms are obvious: financially it’s a break even proposition at best,
and branding the product by having the two logos is confusing. This side-by-side
presentation waters down the general community’s perception of the club at a time when a
positive perception of the club is of paramount importance. In marketing terminology it’s
called “line extension” and is seen when companies add variations of an already highly
successful product. 30 years ago when you thought sports car you thought Porsche 911. In
2013 is it Cayenne, Boxster, 911 or Cayman? 30 years ago when you thought cola you
thought Coca-Cola. Now is it Coca-Cola Classic, Coca-Cola Zero, Coke Plus, Diet Coke or
Coca-Cola Cherry? Who knows? But one thing is for sure: by line extending these famous
brands they have slowly lost their maverick positioning in the minds of the consumer,
allowing more wiggle room for prospective competition.
The relatively unknown WAAC brand logo, depicting “Look at me, I’m a global player
too!” appears to be intentionally placed beside the club logo in an attempt to piggyback on
the club’s fame and illustrious heritage. This is line extension and it is poor and lazy
marketing. In addition there is a detrimental “us and them” between the club and college,
which is to be expected given the division between the two. An inevitable toxic relationship
has become entrenched between the majority of players within each camp. This was most
evident in the Primary Research.
Private and Commercial students are sensitive to anything unusual; this was also
made clear in the Primary Research. The marriage of RACWA to WAAC is not a marriage

14. Page | 12
made in heaven, is very odd and should never have happened. If RACWA has any chance of
survival, WAAC must be wound up immediately and RACWA facilitate all the commercial
training.
The aero club boards and committees around the world share one and only one
passion: recreational flying. They are adequately qualified to lead and direct their aero club;
they are people from all walks of life and bring a rich tapestry of professional experience to
their boards and committees. To be effective board or committee members, provided their
General Manager and Secretary have proven commercial experience, the essential
ingredient is their love of flying. To place the responsibility of leading and trying to advise a
professional flying school that is competing in the same arena as CAE (Canadian Aviation
Electronics) and FTA (Flight Training Adelaide) on their shoulders is grossly unfair and way
beyond the call of their duty and liability.
Below are the people and their professional qualifications that make up the CAE
Board. Their commonality is to increase shareholders’ return on investment (ROI).
 Lynton R. Williams, O.C., Chairman of the Board CAE Inc., Oakville, Ontario
 Marc Parent, President and Chief Executive Officer CAE Inc., Montreal,
Quebec
 Brian E. Barents, Corporate Director, Andover, Kansas
 John A. (Ian) Craig, Business Consultant and Corporate Director, Ottawa,
Ontario
 H. Garfield Emerson, Q.C., ICD.D, Principal, Emerson Advisory and Corporate
Director
 The Honourable Michael M. Fortier, P.C., Vice Chairman, Capital Markets,
Royal Bank of Canada
 Paul Gagne, Chairman Wajax Corporation
 James F Hankinson, Corporate Director
 E. Randolph Jayne II, Managing Director, Heidrick and Struggles International
Inc.
 Robert Lacroix, O.C., Ph.D., Corporate Director
 The Honourable John Manley, P.C., O.C., President and CEO, Canadian
Council of Chief Executives
 Gen. Peter J Schoomaker, U.S.A. (Ret.), Corporate Director
 Andrew Stephens, Corporate Director
 Katherine B. Stevenson, Corporate Director
 Lawrence N. Stevenson, Managing Director, Callisto Capital
These people’s motivations and the personal qualities they bring are no better or
worse than anyone else’s. Business is their love and they are masters at it. They are all
professional, top of their game, strategic business leaders who counsel and guide the
management of the biggest, fastest growing, most profitable airline pilot training and flight
simulator manufacturer in the world. Consolidated revenue was $587.9 million (C$) this
quarter (year ended March 31, 2013), $65.8 million or 13% higher than last quarter, and
$81.2 million or 16% higher than the fourth quarter of fiscal 2012.

15. Page | 13
CAE is an extremely switched on and successful conglomerate and one of the
darlings of the Toronto Stock Exchange. In Western Australia they have slightly less than a
half share, in partnership with China Southern Airlines. They are formidable competitors in
the supply of commercial flying training and manage 227 flight academies worldwide. They
are very market oriented and since the late 1950s have dedicated themselves to
understanding the pilot training requirements for commercial and military aviation. In
addition they just happen to be the leaders and biggest manufactures of commercial and
military flight simulation.
This is their prediction for medium-long term commercial flying and simulation
training, from their recent quarter report ended March 31, 2013:
“CAE is a world leader in providing simulation and modelling
technologies and integrated training services primarily to the civil aviation
industry and defence forces around the globe. We also leverage our
simulation capabilities in healthcare and mining markets. We are globally
diversified with approximately 8,000 people at more than 100 sites and
training locations in approximately 30 countries. In fiscal 2013, we had annual
revenue exceeding $2.1 billion, 90% of which came from worldwide exports
and international activities.
We have the largest installed base of civil and military flight simulators
and a broad global aviation training network. We offer civil aviation, military
and helicopter training services in more than 45 locations worldwide where
we train approximately 100,000 civil and military crew members annually.
Our main products include full-flight simulators (FFSs), which replicate aircraft
performance in a full array of situations and environmental conditions. We
apply our simulation expertise and operational experience to help customers
enhance safety, improve efficiency, maintain readiness and solve challenging
problems.
Approximately half of our revenue comes from the sale of simulation
products, software and simulator updates, and the balance from services
including training, maintenance, ab initio pilot training, aircraft crew sourcing
and integrated enterprise solutions. Founded in 1947 and headquartered in
Montreal, Canada, CAE has built an excellent reputation and long-standing
customer relationships based on over 65 years of experience, strong technical
capabilities, a highly trained workforce, and global reach. CAE’s common
shares are listed on the Toronto and New York stock exchanges under the
symbol CAE.”
CAE VISION STATEMENT
“We intend to be the partner of choice for customers operating in
complex mission critical environments by providing the most innovative

16. Page | 14
product and service solutions to enhance safety, improve efficiency, provide
superior decision-making capabilities and achieve mission readiness.”
CAE STRATEGIC OBJECTIVE
“We are a world-leading provider of modelling and simulation-based
training, optimization and decision support solutions. We have a long history
of serving the needs of customers in the civil aerospace and defence markets,
and in recent years we have extended our capabilities into healthcare and
mining, where the CAE brand is becoming increasingly important.
A key tenet of our strategy related to the civil aerospace and defence
markets is to derive an increasing proportion of our business from the existing
fleet rather than future aircraft deliveries. This includes providing solutions for
customers in support of the global fleet of civilian and military aircraft. In
recent years, the increase in recurring services revenue has lessened our
dependency on aircraft deliveries to drive our business.
We have been successful in diversifying our interests globally, which
differentiates CAE by bringing our solutions closer to our customers’ home
bases. Global diversity makes us less dependent on any one market, and since
business conditions are rarely identical in all regions of the world, we believe
this provides a degree of stability to our performance. We are investing in
both the mature and emerging markets to capitalize on current and future
growth opportunities. Approximately one third of our revenue comes from the
U.S., one third from Europe and one third from the rest of the world including
the high growth, emerging markets.”
“We pride ourselves on our technological leadership. Pilots around the
world view our simulation as the closest thing to the true experience of flight.
We have consistently led the evolution of flight training and simulation
systems technology with a number of industry firsts. We have simulated the
entire range of large civil aircraft in use today, a large number of the leading
regional and business aircraft and a number of civil helicopters. We are an
industry leader in providing simulation and training solutions for fixed-wing
transport aircraft, maritime patrol aircraft and helicopter platforms for the
military. We also have extensive knowledge, experience and credibility in
designing and developing simulators for first-to-market aircraft of major
aircraft manufacturers. We now use our expertise in modelling and simulation
beyond training into other mission-critical areas, such as emergency response
services, where these technologies are used to support superior decision-
making capabilities.”
“With over 65 years of experience in simulation, we are an industry
expert in aviation training and are the industry’s training solution one-stop
shop. In aviation, we are constantly introducing and implementing ways to
improve safety and training efficiency, from ab initio to professional pilot

17. Page | 15
training. For instance, data from actual flights is combined with the training
data analysis captured from training centres to develop evidence-based
training curriculum and brief-debrief content. This results in training programs
that are current, specifically relevant to operational and practical
circumstances, and actionable in real-world situations. Another example is our
industry leadership towards implementing Upset Prevention and Recovery
Training, specifically geared toward preparing pilots to address adverse and
extreme flying conditions. We are using our experience gained in the
development of training and learning methodologies in aerospace to bring
and enhance modelling and simulation technologies to our training solutions
in the healthcare and mining domains. In healthcare, we offer both training
expertise and the widest breadth of simulation training products in the
industry, with surgical, patient, and ultrasound simulators and trainers for
more than 20 medical specialties. Our simulation centre management system,
Learning Space, effectively captures every aspect of a live simulation, allowing
the delivery of instant, multimedia debriefing sessions and ongoing training
improvement and addressing the customers’ need to efficiently manage
financial and administrative costs of operating small to large simulation
centres, all in one web-based solution. In mining, we have borrowed from
aviation standards to introduce new solutions to train mining vehicle
operators.”
“We offer a wide array of training products, from desktop trainers to
FFSs, addressing both our civil and military customers’ training needs. With a
large network of training centres, we are also a global leader in aviation
training providing the complete solution to meet our customers’ training and
pilot placement needs. Our pilot training programs span over 100 different
aircraft models including commercial airliners, business aircraft and
helicopters in the civil market. In the defence market, our programs involve
instruction for transport aircraft, helicopters, lead-in jet trainers, aerial
refuelers, and maritime patrol aircraft. Our range of training services includes
the provision of curricula for initial, type rating, recurrent and maintenance
training. Our civil pilot provisioning solution adds value and moves our
customers’ businesses forward by identifying, screening, selecting, training
and ultimately placing pilots at their airlines. In addition, we deliver civil ab
initio pilot training through CAE Oxford Aviation Academy.”
“The realization of our mission to be our customers’ partner of choice is
evident in the relationships we have with most of the world’s airlines, aircraft
operators, governments and original equipment manufacturers (OEMs). Our
broad geographic coverage allows us to respond quickly and cost effectively to
customer needs and new business opportunities while having a deep
understanding and respect of the regulations and customs of the local market.
We operate a fleet of over 245 full flight and full-mission simulators in more

18. Page | 16
than 45 civil aviation, military and helicopter training locations worldwide to
meet the wide range of operational requirements of our customers. Among
our thousands of customers, we have long-term training services agreements
and joint ventures with more than 20 major airlines and aircraft operators
around the world and relationships with approximately 50 defence operators
in approximately 35 countries.”
“We are unique in the simulation industry as the only truly global
company focused on modelling, simulation, and training. We continually
reinforce our focus, experience and technology leadership as we position the
Company with customers around the world. We invest in building and
maintaining our brand and reputation as a company committed to innovation
that will help our customers enhance safety, improve efficiency, enhance
decision-making and achieve mission readiness. We are focused on offering
the aviation industry’s most comprehensive portfolio of simulation products,
training services, and crew sourcing with the ability to tailor a flexible training
solution to the individual requirements of each of our customers. Our
simulation products are rated among the highest in the industry for reliability
and availability. This is a key benefit because simulators normally operate in
high-duty cycles of up to 20 hours a day, seven days a week. We design our
products so customers can upgrade them, giving them more flexibility and
opportunity as products change or new air worthiness regulations are
introduced. The CAE brand is synonymous with industry-leading simulation
technology as well as superior customer support and we strive to be our
customers’ partner of choice for any simulation and training related
requirement.”
“We continue to develop solutions and deliver technically complex
programs to help ensure that there are trained and mission-ready aircrew and
combat troops around the world. We have a proven track record on delivering
complex civil and military first-to market simulators. Our experience, coupled
with our continued investment in research and development, strengthens our
technological leadership as well as our management expertise to provide
programs featuring sensor simulation for maritime operations, synthetic
tactical environments for naval and fighter operations as well as visualization
and common database technologies that deliver rich, immersive synthetic
environments for the most effective training and mission rehearsal possible.”
“We maintain a strong focus on after-sales support, which is often
critical in winning additional sales contracts, as well as important update and
maintenance services business. Our customer support practices, including a
web-based customer portal, performance dashboard, and automated report
cards, have resulted in enhanced customer support according to customer
comments and feedback.”

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“We pride ourselves in our local presence in each of our global
markets, while simultaneously maintaining the efficiencies and advantages of
being an international organization. This approach has enabled us to lead in
high-growth markets like China, India, the Middle East, South America and
Southeast Asia, where we have been active for several decades.”
CAE TRAINING
“We are the largest provider of commercial and helicopter aviation
training services in the world and the second largest provider of business
aviation training services. We lead the market in the high-growth emerging
regions of China, India, the Middle East, South America and Southeast Asia.
Through our broad global network of training centres, we serve all sectors of
civil aviation including general aviation, major and regional airlines, helicopter
operators and business aviation. We currently operate 227 FFSs and provide
aviation training and services in training centres located in more than 25
countries around the world, including simulation-based pilot training services,
crew sourcing services and ab initio training. Among our thousands of
customers, we have long-term training services agreements and joint ventures
with more than 20 major airlines and aircraft operators around the world. We
offer a comprehensive range of training solutions and services, including
curriculum development, training centre operations, pilot training, cabin crew
training, aircraft maintenance technician training, e-Learning and courseware
solutions, and consulting services. We are a leader in flight sciences, using
flight data analysis to improve airline safety, maintenance, flight operations
and training. CAE Oxford Aviation Academy is the largest ab initio flight school
network in the world with 11 flight academies and a capacity for training up
to 2,000 cadets annually. CAE Parc Aviation is the world’s largest aviation
personnel sourcing organization with more than 1,400 pilots, maintenance
crew and other aviation professionals currently on assignment with airlines,
aircraft OEM’s and leasing company customers around the world.”
CAE SIMULATION PRODUCTS
“We are the world leader in the provision of civil flight simulation
equipment, including FFSs and a comprehensive suite of integrated training
procedures trainers, flight training devices and web-based e-learning tools,
using the same high-fidelity Level D software as the FFSs. We have designed
and manufactured more civil FFSs for major and regional commercial airlines,
third-party training centres and OEMs than any other company. We have
developed a wealth of experience in developing first-to-market simulators for
more than 35 new types of aircraft models, and in recent years we have been
developing simulators for the Airbus A350 XWB, AVIC Medium-Sized
Transport, Boeing 747-8, Mitsubishi Regional Jet (MRJ), ATR42-600 and

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ATR72-600, Bombardier CSeries, Global 5000/6000, Global 7000/8000 and
Learjet 85, Embraer Phenom 100 and 300, Dassault Falcon 7X and the
Commercial Aircraft Corporation of China, Ltd (COMAC) ARJ21 and C919.
Leveraging our extensive worldwide network of spare parts and service teams,
we also offer a full range of support and services. This includes emergency
support, simulator updates and upgrades, maintenance services and simulator
relocations.”
THE FUTURE
Market trends and outlook
`“In commercial aviation, aircraft capacity and passenger traffic
growth are primarily driven by gross domestic product (GDP). The aerospace
industry’s widely held expectation is that long-term average growth for air
travel will be approximately 5% annually over the next two decades. Growth
rates in certain established markets like Europe have been tempered by
economic recession, while growth in emerging markets has been outpacing
this global average growth rate. In the U.S., airlines are in the process of
renewing their aircraft fleets to modern, efficient aircraft. Taken together, the
continued growth in air travel and re-fleeting requirements has led to high
commercial aircraft backlogs and OEM production rates and to the
announcement of new aircraft programs.”
Expected long - term growth in air travel
“In calendar 2012, global passenger traffic increased by 5.3%
compared to calendar 2011. For the first three months of calendar 2013,
passenger traffic increased by 4.2% compared to the first three months of
calendar 2012. For the same period, emerging markets outperformed with
passenger traffic in the Middle East growing at 12.9%, Latin America and
Asia/Pacific growing at 5.7% and 5.3%, respectively, while Europe remained
stable. The global average growth rate in passenger traffic in the last calendar
year has remained healthy, albeit somewhat lower in the latter half of the
year, due mainly to more modest growth in Europe and North America. Over
the past 20 years, air travel has grown at an average rate of 4.8% and this
average is expected to continue over the next 20 years. Possible impediments
to steady growth progression in air travel include major disruptions such as
regional political instability, acts of terrorism, pandemics, natural disasters,
sharp and sustained increases in fuel costs, major prolonged economic
recessions or other major world events.”
“Demand in emerging markets arising from secular growth and a need
for infrastructure to support air travel ...Emerging markets such as China,
Eastern Europe, the Indian sub-continent, the Middle East, South America and

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Southeast Asia are expected to continue experiencing higher air traffic and
economic growth over the long term than mature markets such as North
America and Western Europe. We expect these markets to drive the long-term
demand for the broad array of products and services solutions that we bring
to bear. We have been active in these high-growth emerging markets for
several decades and are positioned as the market leader with well-established
operations, strategic partnerships or joint ventures in each of these regions.”
Aircraft backlogs and delivery rates
“Commercial aircraft OEMs continue to work through record backlog
levels of over 11,000 aircraft. Our civil business relies mainly on the already in-
service fleet to drive demand as approximately two-thirds of our revenue is
generated from training and services in support of the global fleet. Our
product sales are driven mainly by aircraft deliveries coming off of OEMs’
production lines. U.S. legacy airlines have been taking steps to renew their
aging aircraft fleets as seen through recent orders from United/ Continental
Airlines and American Airlines. European airlines such as Turkish Airlines,
Lufthansa and Ryanair have also placed large aircraft orders. Low-cost carriers
such as Norwegian Air Shuttle in Europe and AirAsia and Lion Air in Asia have
placed fleet growth orders with OEMs. We expect the continued high rate of
aircraft deliveries to translate into continued high demand for training
products and incremental demand for services.”
More efficient and technologically advanced aircraft platforms
“More efficient and technologically advanced aircraft platforms will
drive the demand for new types of simulators and training programs. One of
our strategic priorities is to partner with manufacturers to take an early
position on these future programs. In recent years, we have signed contracts
with Bombardier for the CSeries aircraft and the Global 7000/8000 aircraft,
with ATR for the ATR42/72-600 aircraft, with Mitsubishi Aircraft Corporation
for the MRJ aircraft, with Airbus for the A350 XWB aircraft, with AVIC for the
Medium-Sized Transport aircraft and COMAC for C919 aircraft. These
contracts allow us to leverage our modelling, simulation and training expertise
to deliver training solutions, including CAE 7000 Series FFS, CAE SimfinityTM
procedures trainers, comprehensive training programs and expansion of our
network to meet airlines’ training needs. The demand for new and more
efficient platforms is driven by better operational flexibility, reduced
maintenance cost, reduced fuel costs and improved emissions and
environmental footprints. Airlines are actively seeking ways to reduce fuel
costs and the operational risk against further fuel cost fluctuations, as well as
ways to obtain benefits offered by new generation aircraft and propulsion

22. Page | 20
technologies. Deliveries of new-model aircraft are subject to program delays,
which in turn affect the timing of FFS orders and deliveries.”
Long-term demand and shortage of trained aviation professionals (pilots,
maintenance, cabin crew)
Worldwide demand is expected to increase over the long term
“Growth in the civil aviation market has driven the demand for pilots,
maintenance technicians and cabin crew worldwide, resulting in a shortage of
qualified professionals in several markets, notably the faster growing
emerging markets. Pilot supply constraints include aging crew demographics,
fewer military pilots transferring to civil airlines and low enrolment in
technical schools.”
New pilot certification processes require more simulation-based training
“Simulation-based pilot certification training is beginning to take on an
even greater role internationally with the Multi-crew Pilot License (MPL), and
with stall and upset prevention and recovery training. The International Civil
Aviation Organization (ICAO) and various national and regional aviation
regulatory agencies have published new regulatory requirements, standards
and guidance on these topics. MPL is an alternative training and licensing
methodology which places more emphasis on simulation-based training to
develop ab initio students into First Officers of airliners in a specific airline
environment. Today, there are approximately 50 nations that now have MPL
regulations in place and over 15 of these nations already use these regulations
with training providers and airlines. CAE has MPL programs in Asia and in
Europe that are being used by certain airlines. Globally for our industry, MPL is
producing promising results and hundreds of MPL graduates are now flying
successfully with their airline. As the MPL methodology continues to gain
momentum, it will continue to result in increased use of simulation-based
training.
Finally, proposed Airline Transport Pilot License (ATPL) requirements in
the U.S. also call for more simulation-based training that includes specialized
training in simulators for adverse weather, high altitude stalls and upset
prevention and recovery. These requirements are expected to be formalized in
August 2013.”
CAE is just one of the many that WAAC is competing with. Reading between the lines
above, we see another trend serving as a warning to all existing flight schools and
academies: the rapid technological advancement in commercial aviation flight simulation
training. CAE not only virtually own the global flight academy market, they also lead and
dominate the global R&D and manufacturing of commercial and military flight simulators.

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What happens when the burgeoning LLC airlines - who watch every cent! - decide to
train in-house from ab initio using flight simulation all the way to the right seat? How far
away is this? Who knows. But it is only a matter of time. And that will be the end of GA flight
academies as we know them. You would have to be a white hot competitor with solid
financial backing and strategic business track record to even contemplate competing with
CAE. Either you would be Singapore Airlines doing it in-house or Flight Training Adelaide
who are bank rolled and 100% owned by the immensely wealthy Young Brothers of Hong
Kong.
WAAC must be wound up.
Murrayfield
It is a beautiful place. My first visit was to help with the working bee. It was an
enjoyable, although very hot, morning working as a team getting the facility and field ship-
shape for an ensuing CASA audit. I could see many old friends reacquainting in the midst of
a long-held dream that was very close to their hearts: the eventual development of the
Murrayfield facility that would be equal to the best of any aero club in Australia. I’ve also
read about this in Wings of Change and seen its beauty from the air when I flew down with
David Currey one beautiful autumn morning. Its advantages of training area proximity, no
landing fees and minimal taxing time are all too obvious.
For my PPL training, however, I have still opted for Jandakot. Why? I live in Mount
Hawthorn and it is just too far for me to travel. Besides, I really enjoy the busyness of
aircraft traffic at Jandakot and feel it makes me a more situationally aware pilot and more
practiced with my radio technique. This is my personal preference. From a target marketing
perspective, however, if I’m thinking this way then surely many other prospective PPL
students who fit my demographic must be like-minded. I’m talking about professionals in
their mid-years who live coastal or inner city, have the disposable income to pursue a hobby
including learning to fly and place a premium on their time. Isn’t that the reason why they
became successful in the first place: they’re meticulous managers of their time, particularly
if they charge their time out, for example, as a lawyer, accountant or doctor for goodness
knows how much per hour?
This is where we start to build a flying club/business service around the
student/customer/client and not the other way around. It is Solution Marketing: seeking the
target audience first then building the product or service to match as opposed to what
we’ve already got which is having the product or service first and then let’s every which way
find a market for it. It’s an approach that brings poor results at best.
It comes down to simple maths: currently RACWA is drifting out to sea, dangerously
overloaded with debt. One does not have to be an Albert Einstein to understand how
nervous the bank would be feeling at the moment. What happens when the new
Relationship Manager arrives (and we all know how quickly banking managers come and go)
and he/she wants to play safe and reduce the risk in the business portfolio? If RACWA is
going to have any chance of a wonderful future it has to get back to the basics and fast! The
debt must be completely paid out with the sale of Murrayfield. There is no option here.

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Also, as beautiful as Murrayfield is, it is a valuable asset that is offering very little, if
any, return on investment. There is no “sweating of the asset” here and that is unlikely to
reverse in the short to medium term. In my conservative estimation even the long-term
viability is still very much speculative either as a recreational flying club or a flight school
academy.
Interpreting the latest CAE forecast, the day when airline cadet pilots train from ab
initio via simulation may be a lot closer than we think; and airlines would no longer be
reliant upon GA training methods. Sound crazy? Well it was only 110 years ago this coming
17 December that the Wright Brothers first flew. Should we really be that surprised?
Murrayfield must be sold to clear all debt.
ACTION: There are only three options:
• Wind up RACWA/WAAC immediately and go into voluntary receivership.
• RACWA/WAAC continues trading as is and will eventually be placed in
receivership by the major creditor/s.
• The immediate winding up of WAAC and the immediate sale of the Murrayfield
asset to pay off all debt with the retention of the runways, if possible, for
continuation of club training and competitions.

25. Page | 23
Section 4. A New Dawn, A New Day
My great-grandfather, a very successful and smart businessman, was very
community minded. He was unassuming, always encouraged others. In his own way he was
a bit of a Norman Brearley. His modesty led him to turn down a knighthood. He was a
director of brewers Tooth and Co. Ltd, becoming chairman in 1937. Between 1933 and 1957
he also served as a director of United Insurance Co. Ltd and the Commercial Banking Co. of
Sydney, director and then chairman of Marrickville Margarine Co. Ltd, Marrickville Holdings,
the North Coast Steam Navigation Co. Ltd, Sydney Grammar School. He was also a director
of the Royal Prince Alfred Hospital for 30 years.
He was greatly concerned for the underdog. He was active in, including sometime
president, of the Prisoners’ Aid Association. In 1931-32 he even took his family, including my
grandmother, overseas to observe foreign gaols and was greatly inspired by the Swedish
system of teaching skilled trades to the prisoners.
Although he died two years before I was born, I knew him well through my mother.
She would often echo to my siblings and I that, “You can always get better at what you are
already good at” or “Concentrate on your strengths not your weaknesses” or “Always put
the other person first” or “If you help enough people get what they want you will always
have enough” or “Listen to people who are wise and have a proven history before, not after,
making your decision.” As kids, my sister and I would look at each other, nearly pulling our
hair out as my mother would repeat the above over and over. Conversely, as adults these
sayings have been life-changing and enriching in ways beyond measure.
I am very excited and optimistic about the future of RACWA. During my Primary and
Secondary Research I could not seem to find a common thread from people about how the
Club might be able to move forward. People were too close to the trees to see the forest.
There were also negative perceptions (founded or un-founded), particularly towards CASA
and Jandakot Holdings. These perceptions had to be tested and validated so I sought frank
discussion with the representatives of both organisations.
CASA
Often I’ve heard and read that CASA dislike GA and are doing whatever they can to
“drive it out of town”. I spoke with Des Byfield, Regional Manager, Operations Western
Region, for over 55 minutes, questioning at length this general and widely held proposition
within the GA community. He explained that there are several operators out there that have
uneconomical business models and for one reason or another (usually too much debt or
pride or both) feel they cannot close down the operation. Thus they continue to bumble and
stumble along, cutting corners here and cutting corners there.
Another commonality is that many small commercial GA operations are founded and
managed by pilots – fantastic people and excellent pilots but with no business training and
management experience. Some of these businesses should never have been started in the
first place! Most small businesses, aviation or otherwise, are started for the wrong reasons

26. Page | 24
which partly explains why the business mortality rate is always so high; prospective business
proprietors are not doing their initial homework and feasibility properly.
Jandakot Airport Holdings
I also heard from many inside RACWA that JAH want to get rid of RACWA and that
they still secretly want to close the whole airport down for commercial non-aviation
development. I spoke with Managing Director John Fraser for over 70 minutes, questioning
this widely held perception within the RACWA community. He stated this was absolutely not
true. I repeated the question about ten times in different guises and again and again he
stated unequivocally that JAH had no intension of acting towards seeing RACWA go. In fact
he could not understand why they would want to go through the huge move and migration
to Murrayfield.
He then proceeded to factually demonstrate that JAH perceive RACWA as an integral
part of the long-term future of Jandakot Aerodrome particularly with the addition of the
new fourth runway that will be lined with new and expanding aviation related businesses.
The Jandakot Airport Master Plan 2009 states:
“JAH is committed to ensuring provision of the appropriate aviation
infrastructure to accommodate future growth. JAH identifies that the growth
in aviation infrastructure will need to be undertaken in parallel with increased
commercial activity to economically sustain the future of the Airport. Without
diversifying income to support aviation infrastructure the operating cost of
aviation would need to increase significantly which would not be sustainable
for the Airport or its tenants.”
John Fraser assured me this wording would be identical in the Jandakot Airport
Master Plan 2014.
Steve Shircore, Senior Partner, Meyer Shircore & Associates Architects, a long and
trusted friend of mine, who designed the existing buildings for the RFDS, Singapore Flying
College, the new Heliwest building and the new Police Air Wing facility has concurred
unequivocally that Jandakot Airport will be in existence as we know it for the next 50 years
plus.
Allan Chang - retired Squadron Leader and Instructor Royal Singapore Air Force,
1974-1999; Airline Liaison Manager, Flight Training Adelaide, 2006-2008; Qualified Flying
Instructor, 130 Sqn., RSAF Flight Training School, RAAF Base Pearce, Western Australia -
stated that YPJT Runway 06L/24R is of military grade and part of the RAAF current
contingency to assume during conflict.
RACWA Club House
This facility is outstanding. It would have to be the finest location of any aero club in
Australia. Most aero clubs would fall over backwards to have what we have. Inside, the view
upstairs over a fresh coffee or an icy cold beer is sensational morning, afternoon and night!
Upstairs outside is even more amazing.
It is the perfect home for an aero club on the move.

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I heard people’s concerns about the lease ending in 27 years. Well - renew it! I’ve
heard people’s concerns about the ongoing upkeep. Well - three working bees each year will
help fix that one as well as garnish a whole lot of good fun and community spirit as fellow
aviators paint, polish and tidy up together. Remember, we have near on 1,200 members
who all specialise in something and who we can enlist in some way or another to keep our
wonderful club house looking beautiful.
The Fleet, particularly the 152s
From the Primary Research, just about everyone loves those babies. Using the latest
technology, they’ve been so well maintained by our hangar team they are now better than
when they rolled off the production line new in Wichita all those years ago. That is
something to be really proud about! It is also a great story to tell and re-tell particularly
when promoting RACWA to our prospective target audiences. We have no choice but to
keep loving those C152s.
We cannot afford the latest in training aircraft but should not be embarrassed about
our aging fleet of trainers. Of course we should have a plan to replace and upgrade when
and if needed but it can only happen when we can afford it. At the end of the day it is all
about perceptions and how we market ourselves.
Very recently I observed a Learn to Fly seminar. When it came to looking inside a 152
I felt very embarrassed. The two prospective PPL students (with a possible combined net
future revenue of around $50,000) looked inside the cockpit than looked at each other. I
instinctively knew what they were thinking...“Yuk!” I remember when I first sat in a 152 and
felt all those years of people’s dried perspiration on my nice clean clothes, not to mention
those disgusting sweat-laden safety harnesses flopped all over me! This sort of thing rally
impacts the conversion rate on TIF’s.
The exteriors could do with a nice paint job too. Think about it: we only need to do
two aircraft at a time - I’m sure we could find a spot out of the way somewhere in the
hangar - and we have an experienced and enthusiastic auto panel and paint guy on the
hangar team who I’m sure would love the challenge of an interior/exterior paint makeover.
And how about the 1,200 members? There is bound to be someone who deals or is
connected to the paint supply industry where we can source subsidised aero paint.
The cosmetic appearance of the fleet has to be urgently addressed. I have restored
old cars and boats for years and it would not take many resources to re-upholster the seats
and door trims, repaint the dashboards, replace the interior mouldings that are cracked and
chipped, replace screws where needed and install new safety harnesses. One of the fellas in
the hangar has an excellent suggestion: remove the main gear spats. It takes 15 minutes to
remove one spat and 15 minutes to re-assemble. They do five to six aircraft a week; that’s
six hours a week. There is an immediate saving here in terms of labour hire and manpower
time. As the fellow said, “What’s one or two knots when most of the time they are doing
circuits?”
He is right. Look at the Singapore Airlines Cessna 172s or the China Southern Grobs.
Not only do we have to act smart we have to look smart. Perceptions are everything. When

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prospective students are told how safe and wonderful the whole RACWA training
experience is and then they see the interiors of the aircraft, the story they are being told is
not ringing true. Then it becomes an integrity issue. They either choose another flight school
or they buy a jet-ski or a Harley Davidson instead. Remember, it’s not only the other flying
schools that are competing with us for prospective PPL students - the full array of
recreational goods and service providers who are highly skilled marketers are aggressively
vying for the attention of our prospective recreational student audience.
Maintenance (hangar)
There is only one L.A.M.E; this is a major problem. There needs to be a solution
sought here as soon as possible. Brian Collingridge suggests hiring from the U.S. where they
are plentiful and work for around $12 per hour. Bring out three, where one ends up staying
long term. This would allow Glen Caple the opportunity of more holidays and much less
pressure associated with the current overdependence on him. Quality back-up at all levels
is essential to a well-run organisation.
The New Royal Aero Club of Western Australia (Inc.)
I have combed the Internet for hours and hours studying the websites of aero clubs
both in Australia and overseas. Eventually I found a guy called Adam Smith, new Senior Vice-
President of the Centre to Advance the Pilot Community, AOPA (U.S.). You can see him on
AOPA LIVE at www.aopa.org/CAPComm speaking about a new AOPA initiative to connect
non-profit aero clubs around America so they can learn from one another. Their long-term
goal is to rekindle the receding interest in recreational GA. Based in Oshkosh, Wisconsin;
Adam had been Vice-President of the EAA Young Eagles for nine years. He knows his game. I
have spoken to and emailed him several times now. He is most approachable and
enthusiastic about the RACWA plight. I asked for his opinion on the best of the over 600
aero clubs in America and without hesitation he highly recommended the West Valley Flying
Club as that country’s finest (www.wvfc.org).
The West Valley Flying Club: Case Study of the finest aero club in the U.S.
This aero club focuses on recreational GA. It has had similar problems to those now
faced by RACWA: too much debt, old and tired aircraft, dwindling membership with a low
ratio of regular flyers. Located on San Francisco Bay’s Peninsular Region (population
approximately 750,000) they operate from two locations 17.1kms apart: Palo Alto Airport
(188,000+ GA traffic movements per year, see www.airnav.com/airport/KPAO) and San
Carlos Airport (125,000+ GA traffic movements per year, see
www.airnav.com/airport/KSQL). Their immediate surrounding airspace is extremely busy.
Palo Alto is 34.2kms from San Francisco International Airport and San Carlos is 20.1kms from
this same airport. San Francisco International has 387,000+ heavy traffic movements per
year alone! Within a 20nm radius of both locations there are a combination of nine
heavy/GA/military airports totalling 614,000 heavy movements, 796,000 GA movements

29. Page | 27
respectively (not to mention Moffett Airforce Base with its 50 heavy transports and 15
rotary 11nm from San Carlos). These statistics do not include rotary traffic.
Club Profile:
• Established in 1972
• General Manager: Steve Blonstein
• Not for profit social club
• Member-elected board of seven directors
• 11,000 members over 40 years
 Mutual-beneficial non-profit corporation comprising aircraft owners, CFIs (certified
flying instructors), staff and flying members who are all co-dependent
High Level Overview:
• Two locations, 17.1kms apart
• 925 members
• Operates under FAA Part 61 rules - ie. it is not a flight school
• 45 planes - all on leaseback from members, all aircraft are member owned; no
aircraft are owned by the club - a key aspect to the way the club is structured
• 5 simulators - 4 member owned, 1 club owned (Precision Flight Control including 2x
G1000’s and 1x Cat3 ATD Elite Desktop)
• 45 CFIs - all independent contractors with granted CFI privileges
• 14 total staff - nine full time, five part-time
• 13,000-14,000 flight hours per year
• Heavy emphasis on social activities - primarily a social club where the main emphasis
is bringing parties together
Board Structure:
• Seven members - six elected by membership:
1. General Manager - ex-officio and always on the board while they are General
Manager; this brings staff representation to the board,
2. one CFI member,
3. one owner,
4. chairman,
5. treasurer,
6. secretary, and
7. one at-large member - this structure stops certain groups from taking control and
prevents any one contingent from dominating the board and thus radically
changing the direction.
• Annual elections for three board members - only three out of seven members are
replaced at any one time.
• Departing board members can run again.
• No term limits (when things are going well they don’t get many people running for
election; when times are turbulent there are lots of people running for office).

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• Allows for a high mix of people and professions on the board - so long as the
treasurer has a finance background it does not matter about the background of the
chairman, secretary and at-large member.
• Subgroups are organised on a needs basis, eg. in WOW (Women Pilots of West
Valley) there was a temporary subcommittee to manage an IT upgrade.
Membership:
• Regular: $55 per month plus joining fee of $75; includes all privileges, flight
scheduling, full insurance coverage, one free hour on G1000 simulator valued @ $50,
$10 safety incentive if member flies two or more hours per month.
• Associate: $10 per month; includes everything apart from flight scheduling.
• Family: $25 per month; includes discounts for second and subsequent family
members.
• No waiting list for new members.
• Approximately 66% are regular members and 33% are associate/family members.
• 600 active flying members.
CFIs:
• 45 CFIs.
• One third are full-time, two thirds part-time.
• Rates vary from $50 - $90 per hour; some also have block rates - they get to choose
whether they want cash, cheque, credit card or PayPal payment.
• They join as regular members and are granted CFI privileges.
• No specific syllabus, however CFIs are asked to prepare students for phase checks.
• Club requires following phase checks: Pre-Solo, Pre-Solo X C, Pre-Private, Instrument
and Commercial (ie. Pre-Solo students will go up for a phase check with a more
senior instructor chosen by the club)
• CFIs have to market themselves to build their clientele; this is assisted by an official
biography page on the Club website; in addition, most CFIs have their own websites,
trying different marketing methods to attract prospective clients.
• Busy CFIs get 700+ flight hours per year which make up over 1,000+ billable hours
including ground instruction, which means some CFIs can make a reasonable living.
• CFIs buy their own insurance policies.
• CFIs pay a monthly fee of $70 that can be waived with voluntary work, eg. running
safety seminars.
• The club asks new students about their best learning styles, availability, whether
they’re more comfortable with a male or female instructor; the club will then
recommend a couple of instructors, including a quick flight and coffee to confirm
compatibility.
• They have monthly CFI safety meetings that are compulsory; they must attend six in
person per year, taking notes for those who can’t be there.
• Phase checks are used like KPIs (key performance indicators) to measure CFI
performance.

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• A new CFI goes through a thorough interview process, including a safety
presentation before the Senior CFI, the General Manager and the Operations
Manager, to find out where their focus is; and they will also take a flight with the
Senior CFI or the General Manager to make sure they are comfortable with the new
CFI’s ability.
• Assuming all is okay they get to choose their privileges and the aircraft they would
like to fly.
• There is a broad range of CFIs: some are new, others are very senior, some have
trained at West Valley and some have moved from elsewhere.
Staff:
• The General Manager oversees operations.
• Operations: a full service desk at locations plus a manager and six staff.
• Maintenance: a maintenance manager with three mechanics at Palo Alto who take
care of the majority of the fleet.
• Accounting: one full-time.
• Chief CFI: one part-time.
Information Technology:
• Cloud-based architecture (Google Drive).
• Completely paperless for all club forms and member information; web-based pdf
forms, all stored in the cloud; they transitioned from paper to paperless in 18
months.
• All club documentation stored in the cloud.
• Website built using Google Sites.
• Scheduling system is Schedule Master; it handles the accounting aspect very well;
the old system scheduled differently from the accounting system so there was a lot
of double entry with everything kept twice.
• Accounting system switched to QuickBooks Online (Schedule Master and QuickBooks
are designed to integrate together); a relatively elegant all-in-one solution for
membership and accounting.
• Email: Gmail.
• All systems have redundancy.
• No dependence on local servers.
• Staff can run the club from anywhere there is Internet access and are no longer tied
to the desk.
Fleet:
• 45 aircraft.
• The aircraft owner sets all the rates - operations fee, tie down fee, and insurance fee
- and the club takes out a small operations fee; a mutually beneficial arrangement
and the owner receives an income stream.
• The club manages the day-to-day operation of the fleet, including maintenance and
100-hour inspections.
• Large range of planes, old and new.

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• Strength of diversification in terms of membership, CFIs and fleet.
• A broad range of aircraft attracts a broad range of membership; some like
traditional, some like the latest and the greatest.
• 50/50 training/general rental.
• Have an extensive tail wheel history with its own program.
• The average plane flies around 300 hours per year (the busiest planes, the C172s, fly
600 hours per year).
• $2M liability insurance policy coverage: all aircraft are under this policy which is
managed by the club; any new plane automatically falls under the policy.
• Careful control of advanced aerobatic planes like the Pitts: normal check-out process
and very extensive phase check – which the insurance company sees, acknowledges
and very much respects, which is very important in building a good relationship with
them and demonstrating a good track record; I cannot underestimate the value of a
long-term relationship with a good insurance company: West Valley have been with
the same insurer for nearly 20 years. You don’t want to be dumped at the first sign
of trouble!
LSA (Light Sport Aircraft):
• Have tried Skycatcher, Tecnam Bravo and Evektor Sportstar: none made it in terms
of robustness, they could not handle the general beating; the CFIs were sceptical; all
of the people who started LSA switched to PPL; there is still a lot of uncertainty
whether Skycatcher will be the next training facility (Google “Skycatcher
controversy”).
Activities:
• California Passport Program - try and fly to as many California airports as possible
(there are 241 public paved runways in California with great prizes including your
name on the “Wall of Fame” and static wooden models.
• Pizza parties – the last Friday of every month summer, BBQ burgers in winter in the
hangar where maintenance opens up a few aircraft and are on hand to show how an
aircraft works.
• One or two safety seminars each month at either location.
• Ground School at both locations - private and Instrument – which works very well for
students.
• Recently started scholarships to keep people flying and as an incentive to finish their
licenses.
• High School summer program to bring the youth back into flying: $995 for a one-
week, ten-hour introduction to flying that includes five hours at the controls, a visit
to the tower and a nearby aviation museum.
General:
• A new member who is already a pilot is checked out by a CTI with the appropriate
authorisation: a Member Observation form is authorised by the General Manager or
Operations Manager.

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• Owners are checked out to make sure they are flying to West Valley standards, they
see what other people are being put through before being put in their plane;
particularly in the more advanced aircraft like the Cirrus Turbo, a thorough check-out
is double-checked by a follow-up phase check-out.
• Owners have to schedule the plane like anyone else - they have absolutely no
priority over anyone else - if they continue to try and seek priority they have to
remove their plane (this has only happened a couple of times).
• Owners are guided by the club on how to best rate their plane; when they fly
themselves they pay into their member account like anyone else and these funds
eventually loop back into the owner’s account.
• Owners do not pay the operations fee.
• There is no minimum two-hour per week duration for the owner - there is a three-
hour per weekend day minimum; one of the benefits of plane ownership is that the
owner does not have to be concerned with minimums.
• People checking out on a plane and then immediately setting off on a trip have
caused incidents and accidents in the past. This has often involved one of the more
advanced or expensive aircraft where they have not had enough time on the aircraft.
It is now mandatory they do two or three local flights to get familiar with the aircraft
and its performance. We have got to be careful, however, not to have too many
rules and regulations because of a few “bad apples”. After any incident or accident
it’s easy to have a knee-jerk response and bring in new rules and regulations that
don’t actually address the real cause of the problem. What are the circumstances
that got them into trouble? Often the problem does not relate to how many hours
someone has, but is more fundamental in nature. It’s important to find the real, not
necessarily the most obvious, reason.
Case Study Conclusion:
If we are to build the best let’s intentionally copy the best.
I have found Steve Blonstein, General Manager at the West Valley Flying Club, highly
enthusiastic and more than willing to share his extensive experience and knowledge. This is
a magnificent opportunity that we would benefit from capitalising on.
The West Valley Flying Club has defied the trend of receding GA in the U.S. They have
solved many of the common aero club problems with a highly innovative and intelligent
solution that clearly works. It is a financial win-win for all players and takes significant
pressure off its management in terms of financing and owning aircraft and not having to
carry the anxiety of continually trying to keep instructors happy, so they stay with the club
for longer. It gives instructors the opportunity to take more ownership of their future and
requires that they treat their clients (students) with improved quality customer service. It
allows the instructors who give better customer service to be paid more, thus allowing them
to make a decent living doing what they love to do! When students are treated better they
tell their friends and this brings in more new business and circulating revenue. It makes the

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aero club much more productive with available resources and shares responsibility and
accountability more equally.
Adam Smith also acknowledged the following U.S. aero clubs which are well worth
looking into:
• Candler Field Flying Club (has very good youth program)
• EAA Young Eagles (a very good website)
• East Hill Flying Club
• Michigan Flyers (another very good website)
• North Texas Flying Club
• Plus One Flyers, Inc.
• Wings of Carolina Flying Club

35. Page | 33
Section 5. Design, Build: Let’s Move!
Our foundation is rock solid. We’ve chosen a style of aero club/business model that
works, has a proven track record, can help us and will complement and nourish our vision.
Now we build a new RACWA beside the old RACWA and, over time, move in.
New RACWA will use small business legend and author of The E-Myth Revisited
Michael Gerber’s tried and proven Seven Centers of Management Attention as a template.
This will enhance ongoing future security and stability and prevent unseen erosion to new
RACWA for many generations to come.
Sensitive to the challenges of significant change, we will carefully migrate, one step
at a time, from old RACWA to new RACWA guided by the wisdom of change management
expert Dr John Kotter, the Konsuke Matsushita Professor of Leadership, Emeritus at the
Harvard Business School and his ‘8-Step Process of Successful Change’ for any organisation
facing tough circumstances.
SEVEN CENTERS OF MANAGEMENT ATTENTION
Leadership
Effective leadership is a reflection of the purpose and passion from the heart of an
organisation. It is "Why" we do things and not to be confused with the management
component of "How" we do things. The following are key elements.
VISION STATEMENT
“To serve people who love general aviation so they can pursue their passion with fun,
community, affordability and the highest quality of training and safety standards.”
Unique Selling Proposition (USP) or supporting tag line
“Making Your Dreams of Flight Come True Since 1929”
STRATEGIC OBJECTIVE
Create a vision of RACWA as it will be when it is fully developed. This part will be
defined if and when the General Manager and Committee decide to adopt the new Strategic
Business Plan. It will be one to two pages at the most, clearly articulating the following:
• Basic Characteristics of new RACWA
• Vision Statement
• Categories of Service Offered, eg. Recreational, Commercial, Youth
• Club Growth – “Where we want to be in five years?”
• Geographic Scope – “Where will our members live and travel from?”
• Market Positioning and Target Market/s
• Basis of Competition, eg. alternative hobbies, alternative careers, flight schools
• Distinctive Behaviour, eg. we serve our members with integrity, courtesy and
enthusiasm

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• Distinct Presence, eg. dress code, beautifully presented aircraft, excellent cafe
facilities, all marketing consistent with the Vision Statement and USP
• Distinctive Operations, eg. we always answer the phone before five rings
because we know our members value their time
Organisation Chart
To include all employees, positions and clearly identified lines of authority.
“This is how we do it around here” statement
A one-page expansion of Distinctive Behaviour as outlined in the Strategic Objective,
eg. We serve all of our team mates with enthusiasm, empathy and a genuine desire to help
even when we are busy. We strive to enter all scheduling information with meticulous
attention to accuracy. We (staff from all departments) dress professionally and
appropriately and are neatly groomed at all times.
Key Strategic Indicators
Regularly measuring and tracking components in the Strategic Objective to monitor
the ongoing health of RACWA
Systems Design and Documentation
Preparing systems for the seven centres of management attention so that RACWA
operations are consistent and predictable
Finances
Establish, track and maintain predictable cash flow, to control the movement of
money within RACWA and create financial value:
• Financial statements that make sense. Monitoring the vital signs of RACWA
• Realistic and accurate operating budget. Creating a tool that moves RACWA
towards its financial goals.
• Cash plan. Managing the lifeblood of RACWA.
• RACWA Collection System. Collecting subscriptions while keeping members.
• Maximum Cash. Unleashing potential cash power.
• Front-Line Finance. Managing money at all levels of RACWA.
Management
Assemble and motivate the right team; how we manage the people, systems and
resources that encompass the infrastructure and culture of RACWA:
• Position Contracts: create road maps for staff success
• RACWA Recruiting Process: bring the right people to our door
• RACWA Hiring Process: choose the right people for the team
• Mentoring and Developing Our People: free our staff to move beyond their
limitations
• Working Relationships that Work: achieve results through communication,
accountability and trust
• Creating a High Performance Environment: develop a culture that embraces
change.
• Operating Manuals: build the authoritative guidebook of How We Do It Here.

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Marketing
Understand our members: researching and analysing our members to identify who
they are, where they are, and why they belong to RACWA:
• Our most Probable Member: identify target market/s
• Member Perceptions and Behaviour: understand how members think and make
decisions
• Market Positioning of RACWA: set RACWA apart from the rest
• Market Segmentation: spot the opportunities for growth
• Brand Building: brand RACWA and its products and services
Lead Generation
Create awareness in our target market/s; systematically attract new members to
RACWA products and services:
• Lead Generation Process: attract qualified leads to our doorstep
• Lead Generation Channels: reach target markets
• Lead Generation Messages: create the magnetic message
• Lead Generation Through Public Relations and Publicity: build awareness, image,
and credibility
Lead Conversion
Create a predictable sales system; convert leads into new members:
• Lead Conversion Process: give our prospective members the opportunity to say
“yes”
• Effective Presentations for Lead Conversion: tell prospective members what they
need to hear
• Member Re-Conversion: make the most of our best market: our existing
members
• Lead Conversion Through Referrals: turn members into advocates
Client Fulfilment
Delivering on our promises made in Lead Generation and Lead Conversion...every
time!
• Product and Service Strategy and Design: create a product concept that will
delight the members
• Quality Control Management: do what we do with excellence
• The “Wow” Factor: create a powerful member experience
• RACWA Customer Service Process: go the extra mile
• Productivity Management: optimise RACWA resources
• Business Capacity: balance client fulfilment with lead generation and lead
conversion
Seven Centers of Management Attention Conclusion
Over the last 30 years Michael Gerber and his team at E-Myth Worldwide have
coached and mentored more than 25,000 small businesses. Their system works like a Swiss
clock: synchronised, precise and predictable! I know, my previous business was a result of
the E-Myth philosophy; it won the Australia Post Stirling Small Business “Quality Customer

38. Page | 36
Service” Award 2004 and the Small Business Development Corporation Stirling Small
Business “Best Home Based Business” Award 2005.
The West Valley Flying Club model + the E-Myth Seven Centers of Management
Attention = a new RACWA able to continue “making your dreams of flight come true since
1929!”
Change Management
We’ve discovered why and what we need to do. How and when do we do it?
As we view the future we can be certain of one constant: change! And we have no
option but to embrace it. This truth has brought about a new discipline: Change
Management, that is applicable to any organisation that wants to survive and thrive in the
21st Century. Change Management expert Dr John Kotter, The Konsuke Matsushita
Professor of Leadership, Emeritus at the Harvard Business School, has developed the ‘8-Step
Process of Successful Change' for any organisation facing challenging circumstances. It is
beautifully explained in his best-selling book, Our Iceberg Is Melting.
What People Have Said
“...Our Iceberg Is Melting is superb. It embodies powerful messages that can help a
broad audience. It covers all the steps to success in a changing world, from finding the
substantial issues, aligning with a potent champion, charting the course, getting buy-in,
dealing with those who want no change, and so on.”
CHRIS HAND, CITYGROUP GLOBAL ACCOUNT VICE PRESIDENT, AVAYA CORPORATION
“...Never have I read a parable business book that took a complex issue like change
management and distilled it down into a simple story for all to understand. This is the ideal
follow-on to Leading Change and The Heart of Change. A must-read for anyone dealing with
managing change.”
RICHARD J. KOSINSKI, CATEGORY DEVELOPMENT OFFICER, YAHOO, INC.
THE ‘8- STEP PROCESS OF SUCCESSFUL CHANGE’
Set the Stage
1. Create a Sense of Urgency.
Help others see the need for change and the importance of acting immediately.
2. Pull Together the Guiding Team.
Make sure there is a powerful group guiding the change; one with leadership skills,
credibility, communications ability, authority, analytical skills, and a sense of
urgency.
Decide What to Do
3. Develop the Change Vision and Strategy.
Clarify how the future will be different from the past and how you can make that
future a reality.
Make it Happen
4. Communicate for Understanding and Buy-In.
Make sure as many others as possible understand and accept the vision and the
strategy.

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5. Empower Others to Act.
Remove as many barriers as possible so those who want to make the vision a reality
can do so.
6. Produce Short-Term Wins.
Create some visible, unambiguous successes as soon as possible.
7. Don't Let Up.
Press harder and faster after the first successes. Be relentless with initiating change
after change until the vision is a reality.
Make It Stick
8. Create a New Culture.
Hold on to the new ways of behaving and make sure they succeed until they
become strong enough to replace old traditions.
CHANGE MANAGEMENT CONCLUSION
Most of us fear change. We fear the unknown. Someone once said, “FEAR is an
acronym for False Expectations Appearing Real”! John Kotter’s ‘8-Step Process of Successful
Change’ extinguishes those false expectations. It is a proven bridge for leaving old RACWA
and migrating safely over to new RACWA with respect and empathy for all people
concerned.
It paves the way for a future filled with hope, inspiration and, most importantly, a
secure and prosperous RACWA where many more dreams of flight will come true.

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Afterword
A lot of work by many has gone into this report. Please read it carefully in its
entirety. I feel it is an objective and thorough review of RACWA’s more recent journey,
where it is today and where it could be. I believe this report gives RACWA the best - and
probably the only - chance of hope.
Most strategic reports are scanned and end up on the shelf gathering dust because:
• The report was done in haste without enough research and so didn’t get to the
root of the problem/s.
 The report was restricted in its terms of reference and so missed the real
problem/s.
 There was an inability on the part of the researcher to find real solutions to the
real problem/s.
 The majority of decision-makers disagreed with the report findings.
 There was a lack of gumption to engage in the report recommendation.
 The report was conducted internally and was biased in its content.
I hope this report doesn't just end up on the shelf. I know that people are concerned
about the real issues referred to in Sections 1, 2 and 3. There is, however, a law that is just
as true as the law of gravity: that for every problem there is a solution!
You have proven solutions and possibilities presented here in Sections 4 and 5 - quality
solutions and possibilities for current and future members. I can imagine Sir Norman
Brearley would reflect that, “You now have solutions to your problems. However, you don’t
have much time. Think things through clearly and decisively! Reason with one another
respectfully without emotion and consider the facts. Make your decision and stand by it.
Should you follow this recommendation, become united and move forward without
hesitation. Good luck!”

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Appendix A
Review of the July 2011-2012 Annual Report of the Aero Club of WA (Inc)
REVIEW OF THE JULY 2011-JUNE 2012 ANNUAL REPORT OF THE ROYAL AERO CLUB OF WA
(INC) (RACWA)
1. PURPOSE
At the request of James Benjamin, as part of his strategic review of RACWA, I have
reviewed the 2012 Annual Report, comprising but not limited to:
• President’s Report
• General Manager’s Report
• Financial Report comprising:
o Statement by the President
o Independent Audit Report (BDO)
o Statement of Comprehensive Income (Income Statement)
o Statement of Financial Position (Balance Sheet)
o Statement of Changes in Equity
o Statement of Cash Flows
Notes to the Financial Statements
The review is not an audit, but a high-level analysis to identify issues and concerns
which may be of relevance to James as he completes his report and assists with the
development of the new Strategic Business Plan. My review of the annual report, for
simplicity will include comments or observations on the three items identified above with
recommendations for further analysis or investigation.
2. PRESIDENT’S REPORT
2.1 Reference is made to cessation of JAA integrated ground and flying training, but
maintenance of the accreditation. This enables the continuance of modular training,
albeit with increased EASA pricing making this a marginal activity.
RECOMMENDATION: It would be prudent to do a cost benefit analysis of modular
training to determine whether this activity should be continued.
2.2 Maintenance as a Registered Training Organisation (RTO). ASQA indicated that this
may be revoked based on poor financial performance.
RECOMMENDATION: Investigate the value of retaining this status. What would be
the implications to RACWA if this was revoked?
2.3 Utilisation of the club rooms – apart from subleasing surplus space, is optimum
revenue being derived from club social activities such as meals and beverage sales?

42. Page | 40
RECOMMENDATION: That a review of club room utilisation be investigated for
possible further revenue generation.
3. GENERAL MANAGER’S REPORT
3.1 His report refers to a consolidated loss of $686,327 attributable to:
o Write-off of inter-company debt due to its non-recoverability amounting to
$1,036,409 (refer note 3),
o insufficient student numbers, and
o wind-up of JAA training.
3.2 A profit of $683,936 was recorded relating to the sale of lot 11 at Murrayfield
Airport.
 Overheads were dramatically reduced following a reduction of headcount
($1.3m).
 The debt of $2,015,300 places a strain on cash flow with servicing costing
$180,000 per annum. PPB Advisory was retained by Bankwest at RACWA’s
expense to investigate RACWA’s ability to service this debt.
RECOMMENDATION: Ask David for a copy of the PPB Advisory report which was
released to him.
• An ageing fleet detracts new students.
• Jandakot Airport Holdings has provided support to RACWA through generous
extended payment terms.
• Further sales of portions of Murrayfield Airport are required to reduce debt levels.
4. FINANCIAL REPORT
4.1 Statement by the President
• The president stated there are reasonable grounds to believe that the Club will be
able to pay its debts as and when they become due and payable.
ACTION: Explore with the president what reasonable grounds he relied upon to make
that statement.
4.2 Independent Audit Report
• The Auditor’s report is qualified as inter-company balances were unable to be
reconciled. A difference of $176,870 has been recognised in the consolidated
statement of comprehensive income. The auditors were unable to perform sufficient
audit procedures to determine the appropriateness of this adjustment. This
adjustment casts doubt on the competency of accounting personnel involved and
reliability of the accounting systems utilised. I have been advised by the General
Manager that the person responsible for maintaining the UK records has been
released.
• The auditors make reference to Note 1 which indicates the existence of a material
uncertainty which may cast doubt about the entity’s ability to continue as a going

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concern. I will make reference to this in my analysis of the notes to the financial
statements.
4.3 Statement of Comprehensive Income
• Revenue from ordinary activities has declined by $1.06m or 12.9%.
• As previously reported, employee expenses have fallen as a consequence of the
reduction in headcount.
• There has been a significant reduction in General Administration costs of $1,490,226
or 67%.
• Impairment costs have also reduced dramatically by $1,552,507 or 91.9%.
• An income tax expense has been recognised. I will investigate this with the auditor.
4.4 Statement of Financial Position
• Included in current assets is an item described as “Non-current asset held for sale”
amounting to $842,173, referencing Note 12. This note indicates that Lot 4 and Lot 6
will be sold within the next six months. As at the date of this review, these lots have
not yet been sold. I have been advised by the General Manager that there have been
delays in securing EPA and Shire approval which has delayed the sale process.
• Consolidated Current assets exceed Current Liabilities by an amount of $149,048.
• Property, Plant & Equipment is recorded as $7,096,937 (refer note 11). This is after
allowing for impairment of aircraft of $136,559 in addition to depreciation of
$237,855. These values would need to be re-visited in the event of RACWA no longer
being a going concern, and further provision for impairment may be necessary.
• A liability for income tax of $70,622 has been provided. I will investigate with the
auditors why this arises as RACWA is a tax exempt entity. The General Manager
advises that RACWA’s tax advisers have indicated that this amount relates to capital
gain from the sale of land in a wholly owned subsidiary (Hawkview Holdings – Lot
11).
• Included in Non-Current Liabilities is an amount of $2,050,290 for Borrowings. A
portion of this is repayable this financial year (commencing April 2013) and
accordingly should be re-classified as a Current Liability.
• The amount will be quantified and agreed with the Auditor.
ACTION: MJB to discuss with Auditor the classification of debt.
4.5 Statement of Changes in Equity
Nothing to report on this statement.
4.6 Statement of Cash Flows
A consolidated net cash outflow from operating activities was $436,837.
A net cash inflow from investing activities was $1,282,441. This includes $1,297,207
arising from the disposal of property, plant and equipment.
No borrowings were received or repayments made during the 2012 financial year.