It has recommended equipment upgrades to minimise the risk of a repeat tragedy.

Chris Gobel was among four people killed when the aircraft collided eight kilometres south of Mangalore Airport, to Bendigo's east, in February 2020.

The death sent shockwaves through Bendigo's tight-knit flying community, with the Bendigo Flying Club describing him as a key aviation figure.

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"We knew him well, most of us have flown with him," Bendigo pilot Linda Beilharz said at the time.

"He taught me to fly, and he taught many of us to fly."

Mr Gobel was testing the pilot of a Piper Seminole for an instrument flight rating. The other plane also included an instructor and examiner.

The mid-air collision was the first of its type between two civil aircraft under instrument flight rules that have been in place for decades, the Australian Transport Safety Bureau has found after concluding its safety investigation.

It believes neither pilot recognised they were about to crash, explaining why they did not maneuver away or, it appears, communicate with each other.

The day was cloudy and the pilots were probably using their instruments to fly, but the pilots were unlikely to have seen each other fast enough to avoid a crash even if the weather had been clear, investigators said.

They found that an air controller was alerted to the fact the aircraft were getting closer but believed both pilots were aware of each others' presence.

The controller followed required procedures, investigators said.

They did not intervene further because both pilots had been passed information on air traffic, and were in "non controlled" airspace.

That meant the pilots were responsible for making sure their planes did not come into contact, investigators said.

The pilots did not have radar or other equipment to track precise aircraft locations, so they had to make timely decisions with the best available information, the investigators said.

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They have recommended aircraft be fitted with tracking equipment that uses "automatic dependent surveillance broadcast" technology.

The GPS technology could help pilots react to potential dangers minutes before they became hazards, though they would still need to rely on radio communications to remain aware of all nearby traffic, investigators said.

They also recommended air controllers advise pilots if they become aware of developing traffic risks "rather than assume that the pilots are already aware of it".

Pilots would still be responsible for assessing their own collision risks in non-controlled airspace, the investigators said.

In the years since the crash, Airservices Australia has proposed a new surveillance flight information service that would operate within 20km of Mangalore's Airport.

The Civil Aviation Safety Authority has been studying its options for the possible service. It is also reviewing procedures for heights aircraft fly around the airport at.

Late last year, the Department of Infrastructure flagged $30 million worth of potential rebates for aviation operators to defray the costs of installing tracking technology on their aircraft.

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