AEROCARE RESPONSE TO ABC 7.30 REPORT ALLEGATIONS Aerocare CEO Glenn Rutherford said: “Aerocare is deeply concerned by any allegations of system deficiency and will further investigate any claims thoroughly. That said, we want to ensure it is on record that in 22 years, and despite handling over a million flights, Aerocare has never been penalised for a safety related issue. Aerocare has and will always be fully compliant with laws and regulations and as part of that the company is again committed to providing its employees with significant wage increases as part of the current round of wage negotiations.” ============================== Summary Points of Fact:         In 22 years and despite handling over a million flights, Aerocare has never been penalised for a safety related issue In 2016 Aerocare was subjected to over 180 safety and security-related audits – all passed Aerocare’s lost-time injury frequency rate (LTIFR) well below industry average Context and mitigants regarding 2 incidents raised by 7.30 Report, which should be considered in light of the 170,000 flights handled by Aerocare per annum The only Australian-owned handler registered to the top global standard - IATA Safety Audit for Ground Operations (ISAGO) Approach to safety acknowledged by industry with numerous awards and commendations Aerocare has and always will be fully compliant with all laws and regulations and, specifically as relates to employment conditions has had its industrial agreements repeatedly reviewed in detail and approved by the Fair Work Commission, which was unequivocal at the latest renewal in confirming that “each Award covered employee and each prospective Award covered employee would be better off overall if the [Aerocare] agreement applied than if the Award applied” Aerocare again committed to delivering significant wage increases under its new EBA ============================== Aerocare’s Industry-Leading Commitment to Safety Aerocare places the highest emphasis on safety, especially where our staff and the broader travelling public are involved, and is gravely concerned by any allegation or misrepresentation that might suggest otherwise. Since inception, Aerocare’s first priority has been, and will always be, an absolute commitment to ensuring that all employees are fully trained, well informed and given the best possible safety conditions in what is a complex and potentially hazardous working environment. SAFETY EFFICIENCY INTEGRITY To support this, our investment in a team of dedicated specialist safety personnel and world-class proprietary training and compliance systems has run into the millions of dollars and is ultimately evidenced by our track record, which has never seen any penalty or loss of contract for safety-related issues in 22 years of operation. In addition Aerocare also points to the following facts:  We are fully compliant with Australian Occupational Health and Security regulations, and with Australia’s Civil Aviation Safety Authority (CASA) regulations, and, of course all other obligatory and local regulations;  We also comply with the specific requirements of each or our airline partners, ensuring our team is highly trained, qualified and competent in each of their unique processes and procedures;  As an airline ground handling service provider, we are subjected to more audits and scrutiny than the airlines themselves given the additional layer of airline audit. Last year alone, Aerocare was subjected to over 180 safety and security-related audits by regulators, government departments and airlines, in addition to our own continuous internal investigations and reviews; o Auditors include: CASA, Workplace Health and Safety, the Office of Transport Security, Client Airlines, US Transport Security Administration, Singaporean Civil Aviation Authority, NZ Civil Aviation Authority, and Australian Biosecurity; o Our most recent comprehensive end-to-end safety management system audits performed by two of our largest customers had zero deficiency findings, which we understand is unprecedented in the Australian context;  Importantly, we are proud to be the only Australian-owned IATA Safety Audit for Ground Operations (ISAGO) registered handler. This designation is awarded by the peak global aviation body IATA and requires the handler to have met strict standards in safety compliance and performance as assessed by qualified independent auditors. Employee Safety and Work Conditions Aerocare’s lost-time injury frequency rate (LTIFR) – the most accepted measure of relative employee work conditions – is well below comparable aviation industry rates and also well below national competitor rates with Aerocare’s latest annual result totalling <2.7 events across the company per million hours worked, being less than a third of the published industry average of 9.1 events per million hours, and noting that Aerocare’s rate continues to decline despite strong growth in the employee base. Aerocare’s national 2015/2016 insurance premium rate for workers’ compensation is 28% better than the national average industry rate for “Services to Air Transport.” This is market-based evidence that Aerocare achieves significantly better results in injury prevention and return-to-work outcomes than the industry average. Aerocare has an open and healthy staff incident reporting culture, with staff-generated reporting occurring at rates higher than those of our peers and under a program that is often praised by our customers for its transparency. SAFETY EFFICIENCY INTEGRITY Specific Incidents Raised by ABC 7.30 Report With over 170,000 flight turns handled each year in as complex an environment as an airport it is unfortunately the case that safety-related events occasionally happen, although our data and customer feedback indicates that such events occur less frequently at Aerocare than for any of its peers. Brisbane cargo door incident 2014: An aircraft reversed temporarily before the pilots became aware the cargo door was open. Cockpit systems indicated the cargo door was open before the ground tug’s tow-bar was disconnected during push-back from the gate, and well before the aircraft could begin to taxi itself. Air traffic control also contacted the cockpit to advise of the cargo door status. Pushback and tow-bar disconnection procedures ceased immediately, the engine was shut down, cargo door closed and the aircraft resumed its journey without further issue. Safety of crew, passengers and ground staff was never at risk. There was no risk of an aircraft departure with the cargo door open. Subsequent to this incident a detailed review was undertaken by Aerocare and the airline and additional procedural improvements were introduced to further mitigate any repeat future occurrence. Disabled persons lift incident 2015: A lift was being towed between gates in preparation for a later flight and, in contravention to operating procedure, the driver decided to take a “short-cut” that saw the top of the lift hit an aerobridge. No one was on the lift at the time of the incident and no one was harmed, the lift was not destroyed and there was no material damage to any airport property. As the event was caused by an error in judgment despite adequate training and culture, the employee involved was coached to assist them in making better decisions. Both incidents were investigated and documented in detail by Aerocare’s safety team and by the airlines who in turn report all such incidents to CASA and/or the airports as a matter of course. Importantly, the incident auditors did not find any systemic evidence of deficient procedure and also verified that deficient employee training or fatigue were not in any way contributing factors. Our Approach to Safety Aerocare’s approach to safety is through continual improvement and we have direct evidence as reported above that our performance is top-tier if not best-in-class with ongoing improvements in key performance metrics. Additional information on this topic can be found at our website (http://aerocare.com.au/category/news/) and in our corporate brochure (http://aerocare.com.au/wpcontent/uploads/2016/03/Aerocare-Corporate-brochure-email.pdf) but we copy below a summary of material safety-related news over the last twelve months as evidence of our ongoing commitments and investments in this most crucial area of our business: February 2017: Aerocare invested in industry-leading technology to improve adverse weather monitoring at highest adverse weather risk airports, allowing the business to take necessary precautions to ensure the safety and wellbeing of staff, as well as protecting aircraft and ground equipment and providing information to other airport stakeholders. No competitor or like operator has, as yet, made an investment of this type; SAFETY EFFICIENCY INTEGRITY December 2016: Aerocare was shortlisted for the second year running for the Ground Handling International Ramp Safety Awards for The Far East, India and Australasia. Although Aerocare as a whole was nominated and commended for its firm-wide performance, specific recognition was also made of Aerocare’s Canberra operation where an Aerocare ramp employee whose situational awareness and quick reaction prevented the likely collision of two aircraft, after one aircraft was incorrectly given clearance by a tower operator and began taxiing behind another aircraft; October 2016: Comprehensive end-to-end organizational audit (including safety systems) by two of Aerocare’s largest client airlines resulted in nil adverse findings and several commendations (unprecedented in the Australian context); September 2016: Aerocare won 4 out of 8 possible awards at the QantasLink Regional Airports Ground Handling Conference, in recognition of outstanding service, safety reporting, safety health checks and compliance to safety procedures; March 2016: Aerocare was registered as an ISAGO provider (International Air Transport Association (IATA) Safety Audit of Ground Operations – ISAGO), recognising Aerocare’s commitment to a world-class safety culture. ============================== Aerocare’s Ongoing Commitment to Employees Consistent with its exemplary 22 year industrial relations and compliance record, Aerocare is again committed to delivering significant increases in wages to over 2,000 employees across Australia under its 2017 collective wages agreement which is currently being negotiated. The company is proposing to increase rates across the board by at least 5% (on top of the benefits of tenure-based increases), to increase minimum shift duration, and to introduce significant additional long service bonuses. Pay levels will continue to exceed award conditions and the Fair Work Commission Better off over All Test (BOOT) requirements. The agreement also provides for additional annual length of service increases of 2.5% - 4% for 4 years. These commitments by Aerocare, which is an Australian built and owned company, are being made as its large global competitors are actively announcing their intention to cut costs and reduce wages. The majority of Aerocare employees are employed on a permanent, part-time basis, with approximately one-third of its workforce on full-time equivalent hours. Aerocare remains committed to all employees having permanent positions. This is evidenced by the fact that we have repeatedly offered in the past and continue to offer all our valued staff the opportunity to convert to permanent employees, at any time, on their election. Aerocare strongly refutes any allegations or assertions that may be made in ABC’s 7.30 Report program inferring poor treatment or under-payment of its employees and, in turn, would like to point to the following facts: SAFETY EFFICIENCY INTEGRITY  There have never been any findings against the company in relation to labour practices or wage payments, nor has there been any application by employees to Aerocare or to the Fair Work Commission itself as is provided in the current agreement’s dispute resolution clause;  Alongside permanent full-time positions wherever possible, Aerocare does employ numerous employees on a permanent part-time basis, which is driven by the needs of our customers, with rosters determined by flight schedules and noting that it generally takes three hours to fully service an international aircraft; o That said, alongside heavy investment in new equipment and best-in-class recruitment, training and HR technologies, Aerocare has invested millions of dollars to improve the quality of its rostering so as to maximise the duration of shifts, with the goal of securing more contracts which would enable Aerocare to offer employees longer shifts and further viable full-time positions;  97% of employees voted in favour of the previous EBA, which delivered better wages and, as industry developments have shown, better job security and working conditions than many of our competitors and Aerocare is confident there will be similar support for the EBA currently under negotiation, as has been the case in six prior EBA negotiations over 22 years, and noting that our 97% approval rate of the current agreement contrasts to that of industry peers that have typically been at a much lower level of support, where approved, and, furthermore noting that some peers continue to operate on expired or below-award, non-certified agreements;  The Fair Work Commission has previously found that the Aerocare EBA agreement delivers above Award conditions to employees with the Commission’s Vice President publicly stating in ratifying the Aerocare collective agreement of 12 February 2013: “I have weighed the respective advantages and disadvantages under the Agreement compared to the Award. In my view the benefits of the Agreement are substantial. I have also considered the detailed evidence and calculations provided in the proceedings which assists in assessing the extent of the benefits and the disadvantages. I note that in relation to minimum shift lengths the basis of these calculations adopt the unions’ proposals regarding financial impact. Having regard to all of the circumstances I am satisfied that each Award covered employee and each prospective Award covered employee would be better off overall if the agreement applied than if the Award applied. In my view the Agreement satisfies the BOOT. I am satisfied that each Award covered employee and each prospective Award covered employee would be better off overall if the agreement applied than if the Award applied.”  In a further decision relating to the employment of dozens of new workers inherited from a smaller competitor that would likely have failed without Aerocare’s intervention, the Fair Work commission, as recently as the 4th of November 2015 that: “Aerocare is a large national employer in this industry. It operates under formal enterprise agreements. It has been able to grow its business through flexible innovative employment arrangements. Its agreements have passed legislative approval tests.” SAFETY EFFICIENCY INTEGRITY In conclusion, we are particularly concerned by any misrepresentations regarding our safety record, which at all times remains our #1 focus. It is a point of fact that Aerocare’s safety record is impeccable – one of the safest in the world as recognized by the numerous awards we regularly receive from our customers and, demonstrably superior to industry benchmarks and, based on all the information we have available to us, also ahead of our peers. -ENDS- Monday 20 March 2017 For Further Information: Peter Brookes, Citadel-MAGNUS 0407 911 389 SAFETY EFFICIENCY INTEGRITY AEROCARE RESPONSE TO ABC 7.30 REPORT Consistent with its exemplary 22 year industrial relations and compliance record, Aerocare is again committed to delivering significant increases in wages to over 2,000 employees across Australia under its 2017 collective wages agreement which is currently being negotiated. The company is proposing to increase rates across the board by at least 5% (on top of the benefits of tenure-based increases), to increase minimum shift duration, and to introduce significant additional long service bonuses. Pay levels will continue to exceed award conditions and the Fair Work Commission Better off over All Test (BOOT) requirements. The agreement also provides for additional annual length of service increases of 2.5% - 4% for 4 years. These commitments by Aerocare, which is an Australian built and owned company, are being made as its large global competitors are actively announcing their intention to cut costs and reduce wages. The majority of Aerocare employees are employed on a permanent, part-time basis, with approximately one-third of its workforce on full-time equivalent hours. Aerocare remains committed to all employees having permanent positions. This is evidenced by the fact that we have repeatedly offered in the past and continue to offer all our valued staff the opportunity to convert to permanent employees, at any time, on their election. Aerocare strongly refutes any allegations or assertions that may be made in ABC’s 7.30 Report program inferring poor treatment or under-payment of its employees and, in turn, would like to point to the following facts:  There have never been any findings against the company in relation to labour practices or wage payments, nor has there been any application by employees to Aerocare or to the Fair Work Commission itself as is provided in the current agreement’s dispute resolution clause;  Alongside permanent full-time positions wherever possible, Aerocare does employ numerous employees on a permanent part-time basis, which is driven by the needs of our customers, with rosters determined by flight schedules and noting that it generally takes three hours to fully service an international aircraft; o That said, alongside heavy investment in new equipment and best-in-class recruitment, training and HR technologies, Aerocare has invested millions of dollars to improve the quality of its rostering so as to maximise the duration of shifts, with the goal of securing more contracts which would enable Aerocare to offer employees longer shifts and further viable full-time positions;  97% of employees voted in favour of the previous EBA, which delivered better wages and, as industry developments have shown, better job security and working conditions than many of our competitors and Aerocare is confident there will be similar support for the EBA currently under negotiation, as has been the case in six prior EBA negotiations over 22 years, and noting that our 97% approval rate of the current agreement contrasts to that of industry peers that have SAFETY EFFICIENCY INTEGRITY typically been at a much lower level of support, where approved, and, furthermore noting that some peers continue to operate on expired or below-award, non-certified agreements;  The Fair Work Commission has previously found that the Aerocare EBA agreement delivers above Award conditions to employees with the Commission’s Vice President publicly stating in ratifying the Aerocare collective agreement of 12 February 2013: “I have weighed the respective advantages and disadvantages under the Agreement compared to the Award. In my view the benefits of the Agreement are substantial. I have also considered the detailed evidence and calculations provided in the proceedings which assists in assessing the extent of the benefits and the disadvantages. I note that in relation to minimum shift lengths the basis of these calculations adopt the unions’ proposals regarding financial impact. Having regard to all of the circumstances I am satisfied that each Award covered employee and each prospective Award covered employee would be better off overall if the agreement applied than if the Award applied. In my view the Agreement satisfies the BOOT. I am satisfied that each Award covered employee and each prospective Award covered employee would be better off overall if the agreement applied than if the Award applied.”  In a further decision relating to the employment of dozens of new workers inherited from a smaller competitor that would likely have failed without Aerocare’s intervention, the Fair Work commission, as recently as the 4th of November 2015 that: “Aerocare is a large national employer in this industry. It operates under formal enterprise agreements. It has been able to grow its business through flexible innovative employment arrangements. Its agreements have passed legislative approval tests.” In addition to the above points, we are particularly concerned by any misrepresentations regarding our safety record, which at all times remains our #1 focus. It is a point of fact that Aerocare’s safety record is impeccable – one of the safest in the world as recognized by the numerous awards we regularly receive from our customers and, demonstrably superior to industry benchmarks and, based on all the information we have available to us, also ahead of our peers. -ENDS- 17 March 2017 SAFETY EFFICIENCY INTEGRITY