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A Fairchild SA227-AC (Metro) aircraft landed on runway 34R, with an instruction to exit onto taxiway Tango 1 and taxi via taxiway Juliet. The pilot contacted the surface movement controller (SMC) while approaching a mandatory holding point on taxiway Juliet, and was instructed to taxi via taxiway Bravo and hold short of runway 25. The pilot read the instruction back correctly. That instruction required the pilot to continue ahead on taxiway Juliet, passing the entry to taxiway Charlie before turning right into taxiway Bravo.

The tower controllers subsequently observed the Metro taxiing along taxiway Juliet, past the entry to taxiway Bravo, towards runway 34L, which lay a short distance beyond taxiway Bravo. At that time, a Boeing 737 (B737) was touching down on runway 34L. The SMC instructed the pilot of the Metro to stop. As there was no reply, the instruction was immediately repeated, and subsequently acknowledged. The Metro was stopped at the edge of runway 34L, beyond the runway holding point. The pilot of the B737 was also instructed to stop immediately, but the aircraft was too close to the taxiway Juliet intersection to comply. The B737 was steered to the left of the runway centreline to increase separation from the Metro, subsequently passing about 25 m in front of that aircraft, at about 80 kts.

The occurrence happened at night in fine conditions; there were no works taking place in the area; and all relevant taxiway lights, runway holding point lights and movement area guidance signs were reported by the air traffic controllers to have been functioning normally. However, when subsequently interviewed, both pilots asserted that the runway 34L holding point lights on taxiway Juliet were not illuminated. Shortly after the incident an airport safety officer had been requested to conduct an inspection of the ground lighting in the occurrence area. All lighting, including the holding point lights on taxiway Juliet protecting runway 34L, were observed to be functioning normally.

An investigation established that the pilot flying the aircraft was undergoing command training under the supervision of a training captain. A practice Instrument Landing System (ILS) approach had been flown, during which the pilot under training experienced difficulties in maintaining the required flight tolerances. After landing, the pilot correctly obtained and read back the taxi clearance. However, he subsequently failed to notice that the aircraft had passed taxiway Charlie and was approaching the entrance to taxiway Bravo. Believing he was now approaching taxiway Charlie, the pilot continued to taxi along taxiway Juliet, expecting to see the entry to taxiway Bravo.

At about that point, the training captain, noticing that the aircraft had just passed the entry to taxiway Bravo, looked towards the pilot to ask where he was going, but immediately noticed the lights of a landing aircraft on runway 34L. Concerned about the proximity of the other aircraft, he immediately instructed the pilot under training to stop, which coincided with similar instructions from the SMC.

During discussions with the crew of the Metro, it became apparent that, after landing, the pilot under training had been concerned with his performance during the practice ILS approach, and had initiated a brief discussion with the training captain at about the time the aircraft had been taxiing along taxiway Juliet.

Both pilots, who were very familiar with the layout of Sydney Airport, also indicated that the movement area guidance signs (MAGS) were somewhat confusing when indicating the entry to taxiways. However, the pilot under training said that normally he did not refer to the MAGS because of his familiarity with the taxiway layout.

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