20 18 REPORT INTEGRATED SERVICES SOC LIMITED - ATNS
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20 AIR TRAFFIC & NAVIGATION SERVICES SOC LIMITED I N T E G R AT E D REPORT 18
CONTENTS
Performance highlights 4
About the Integrated Report 5
Scope and boundary of report 5
Navigating this report 5
Referencing content online 7
Feedback 7
Approach to integrated reporting 7
Sustainability statement 7
Assurance 8
Statement of precautionary principle 10
Board of Directors Approval Statement 10
Organisational profile 12
Vision 12
Mission 12
Values 12
Nature and purpose of our business 12
Organisational structure and business model 12
Structure of ATNS’s operations 17
Contextualising our operations 22
Global business context 25
Regional context 25
National context 25
Developmental context 25
Commitment to external initiatives 28
Leadership review 29
1
CONTENTS CONTINUED
Governance and assurance 34 Performance 114
Application of KING IV 34 Ensure long-term financial sustainability 114
Ethical leadership and corporate citizenship 34 Enhancing operational efficiencies in line with global ATM standards 117
ATNS Board of Directors 42 Develop leadership capability in the Africa ATM space 120
ATNS Executive Committee 54 Create a transformative organisation 121
How ATNS’s control framework creates value 60 Build a culture of safety 123
Remuneration 66 Build a skilled and capable employee resource base 126
Code of ethics 70 Manage the organisation’s contribution to Climate Change 126
Manage and preserve scarce and vulnerable resources 128
Material issues 72
Develop enterprise-wide awareness for environmental impacts 131
Clustering of ATNS’s material issues 76
Ensure constructive and collaborative stakeholder relationships 131
Stakeholder engagement 79 Maintain an impeccable governance framework 134
Key stakeholders 79 Ensure regulatory alignment and compliance 135
Performance against our Shareholder Compact 136
Strategy 81
ATNS’s Strategic fundamentals 82 Outlook 144
Strategic drivers 82 Ensure long-term financial stability 144
Strategic imperatives 82 Enhance operational efficiencies in line with global ATM standards 146
Monitoring sustainable development outcomes 86 Create a transformative organisation 148
Build a culture of safety 148
Creating value through the Capitals 88
Build a skilled and capable employee resource base 149
Defining “value creation” 90
Manage the organisation’s contribution to climate change 149
Financial capital 90
Develop enterprise-wide awareness for environmental impacts 151
Manufactured capital 94
Intellectual capital 100 Consolidated 5-year review 152
Human capital 102
List of acronyms 156
Social and relationship capital 105
Natural capital 109 Company information 160
2 3
PERFORMANCE HIGHLIGHTS ABOUT THE INTEGRATED REPORT
STRATEGIC OBJECTIVES INDICATOR 2016/17 2017/18 Scope and boundary of the report material aspects extend to other entities outside of
the Company, as ATNS’s operations are located at
different airports.
Revenue R1,557 billion R1,594 billion This is our 6th consecutive Integrated Report and
Ensure long- covers the financial reporting period from 1 April
The previous Integrated Report was approved by
term financial Operating costs R1,300 billion R1,382 billion 2017 to 31 March 2018. The Integrated Report
sustainability the ATNS Board on 29 August 2017 and published
combines financial and non-financial performance for the period 1 April 2016 to 31 March 2017. The
Net profit R184,5 million R190,1 million in a single report. References to forward-looking 2016/17 reporting suite combined performance
information and targets are extracted from the content, sustainability content and our Annual
Total capital expenditure R307 million R305 million
2018/19 ATNS Corporate Plan approved by the Financial Statements across three reporting
Enhance operational Communication • C: 99,80% C: 99,78% Board of Directors. volumes. A printed version of the three-volume
efficiencies in line suite of reports was published and a web-based
with global ATM Average
systems Navigation • N: 97,98% N: 96,30% The boundary of this report is largely the ATNS version of each report was made available in
standards
availability legal entity. There may be instances where PDF format.
Surveillance • S: 99,99% S: 99,97%
• ATS AIC: 70,01% • ATS AIC: 72,27%
Create a
•
•
ATS Female: 42,43%
ATNS AIC: 75,12%
•
•
ATS Female: 46,55%
ATNS AIC: 76,98%
Navigating this report
transformative Overall EE representation
organisation • ATNS Female: 44,88 • ATNS Female: 47,35%
• People with • People with Icons associated with strategic objectives
disabilities: 3,31% disabilities: 3,22%
Performance commentary in this report pertains to material issues that specifically align with the
2,57 safety events per Company’s key strategic objectives. Accordingly, performance commentary is linked to strategic
Build a culture Safety events per 100,000 5,19 safety events per
100 000 air traffic
of safety air traffic movements 100 000 movements objectives throughout the report by means of the following icons:
movements
Total number of ATS trainees 81 68
Ensure long-term financial Manage the organisation’s
sustainability contribution to Climate Change
22 (12 Engineering
SUSTAINABLE
AVIATION AFRICA
Build a skilled and Total number of engineering
6 learnerships and
capable employee trainees
resource base
10 graduates) Enhance operational efficiencies in Manage and preserve scarce and
line with global ATM standards vulnerable resources
Training investment as
8,13% 6,52%
percentage of salary bill Deploy and use leading Develop enterprise-wide awareness
technologies to the benefit of the for accountable environmental
Develop enterprise- ATM community
Total number of employees impact
wide awareness
trained on environmental 316 ATNS employees 0*
for environmental
training programmes Develop leadership capability in Maintain an impeccable governance
impacts
Africa ATM space framework
Manage the
organisation’s Create a transformative Ensure regulatory alignment and
Total carbon inventory 23,292.01 tons CO2e 23,440,52 tons CO2e
contribution to organisation compliance
SUSTAINABLE
AVIATION AFRICA
climate change
Ensure constructive and
Manage and Overall annual electricity usage 20,515,469 kWh 20,358,981 kWh Build a culture of safety
preserve scarce collaborative stakeholder
and vulnerable relationships
resources Overall annual fuel usage 89,761 Litres 81,612 Litres
Build a skilled and capable
employee resource base
Ensure constructive
and collaborative
CSI spend R3,445,441 R2,521,704
stakeholder
relationships
* ATNS e-learning content being developed.
4 5
ABOUT THE INTEGRATED REPORT CONTINUED
Referencing content online Materiality has been determined by the ATNS
Icons associated with the six capitals Board of Directors and Executive Management
through a process of extensive consultation within
The 2017/18 Integrated Report, and ATNS’s Annual
Performance commentary in this report further aligns with the Company’s perspective on value the organisation and with ATNS’s stakeholders.
Financial Statements are available on our website
creation, and in particular, value creation through the six capitals (financial, manufactured, The process considered ATNS’s strategic objectives
as downloadable documents: http://www.atns.
intellectual, human, social and relationship and natural). Accordingly, performance commentary is whilst taking into account the Company’s material
co.za/annualreports.
also linked to the six capitals throughout the report by means of the following icons: risks, strategic opportunities and the ATNS value
chain.
Financial capital Human capital
Feedback
Read more on the materiality determination
process on page 72 and 73.
We welcome feedback on our integrated reporting
Manufactured capital Social and relationship capital to ensure that we continue to disclose information
that is pertinent to all our stakeholders.
P.16 Sustainability statement
Intellectual capital Natural capital
For further queries or suggestions kindly contact:
As a signatory to multiple global conventions P.3
marketing@atns.co.za. P.16
– including the Chicago Convention, which
established the International Civil Aviation
Icons referencing KING IV principles applied Approach to integrated Organisation (ICAO) as a specialised agency of
the United Nations - South Africa’s vision for
Abridged governance disclosures in this report are accompanied, where applicable, by icons referencing the P.5
reporting sustainable development is embodied in the
applicable KING IV principle by means of the following icons: P.15 relationship between social systems, ecosystems
The 2017/18 Integrated Report offers a and economic systems. As a State-Owned
comprehensive account of the Company’s Company - and national provider of air traffic
P = Principle performance in terms of its ability to create management (ATM) services – ATNS plays a
King IV principles are referenced where appropriate in this report. value through the ‘six capitals’, as defined by the significant role in contributing to South Africa’s
International Integrated Reporting Council (IIRC).1 sustainability agenda. Our Shareholder mandate,
represented by the Minister of Transport and
Icons associated with material issues We apply the principle of ‘materiality’ to: the entire Department of Transport, directs us
to contribute to both departmental and national
• Inform disclosures, so that they are both outcomes by balancing the safe development of
Icon denoting one or more of ATNS’s 19 material issues. important to the organisation and relevant in civil aviation, with the responsible consideration
terms of our reporting priorities for the year of our impacts on the economy, society and the
under review. environment.
Icon denoting ATNS’s material developmental and environmental issues. Where appropriate in
this report, material issues forming part of ATNS’s material developmental and environmental • Link disclosures on ATNS’s financial, social and
We disclose both financial and qualitative (non-
issues – as detailed in the online Sustainability Report - are denoted by using this icon. environmental performance to the Company’s
financial) performance information in this report
strategic objectives, top risks and to the six
as it relates to ATNS’s business outcomes and the
capitals.
Company’s contributions to the country’s overall
• Link performance to the Company’s economic efficiency and ATM competitiveness.
developmental context, regulatory context, Our sustainability reporting includes Standard
commercial context and its global business Disclosures from the GRI Sustainability Reporting
context. Guidelines.
1
According to the IIRC:
“The capitals… are: financial capital, manufactured capital, intellectual capital, human capital, social and relationship capital, and natural capital.
Together they represent stores of value that are the basis of an organisation’s value creation.”
Further:
“Integrated Reporting is an approach to corporate reporting that demonstrates the linkages between an organisation’s strategy, governance and financial
performance and the social, environmental and economic context within which it operates” (2013a).
6 7
ABOUT THE INTEGRATED REPORT CONTINUED
Assurance
ASSURANCE ASSURANCE PROVIDERS ASSURANCE FRAMEWORKS, 2017/18 OUTCOME
ATNS’s integrated assurance plan and framework encompass the assurances provided by the Company’s CONTENT STANDARDS AND GUIDELINES
Board of Directors, management, internal specialists, internal and external audit functions and other
Broad-Based • ATNS Internal Audit • DTI Codes of Good Practice B-BBEE Level 2
business advisers. Black Economic function • B-BBEE Act and associated Charters B-BBEE score: 85,42
Empowerment, • ATNS Board • Generic Transport Public Sector
ATNS INTEGRATED ASSURANCE FRAMEWORK FOR THE ANNUAL INTEGRATED REPORTING PROCESS representation • ATNS Social and Ethics Charter
and contributor Committee • Relevant Key Performance Areas
level • ATNS Human Resource (KPAs) stipulated in the Shareholder
ASSURANCE ASSURANCE PROVIDERS ASSURANCE FRAMEWORKS, 2017/18 OUTCOME Committee Compact
CONTENT STANDARDS AND GUIDELINES • ATNS Procurement
P.2 Committee
P.10 Annual • ATNS Board of Directors • Financial Reporting Standards Qualified audit report
P.11 Financial • The Company’s • Requirements of the Public Finance for 2017/18. Safety • ATNS Board of Directors • ICAO Standards and Recommended The safety ratio
P.12 Statements directors Management Act (PFMA) of South management • ATNS Audit and Risk Practices (SARPs); ICAO Annex 19 attained was 5,19
P.13 (AFS) • External auditors: Africa and Committee requirement for States to implement safety events per
P.15 Rakoma and Associates • Companies Act of South Africa performance • External assurance ATS safety management programmes 100 000 movements
• Public Audit Act of South Africa provider: South African • The Civil Aviation Act (Act 13 of against a target of
• International Standards on Auditing Civil Aviation Authority 2009), supported by Civil Aviation 2 safety events per
(ISA) (SACAA) Regulations 100 000 movements.
• South African Civil Aviation
Risk • Audit and Risk • ICAO Standards and Recommended Risk management Regulations (CAR) Part 40
management Committee (ARC) Practices (SARPs) processes, practices • Relevant Key Performance Areas
and review of • Executive Audit and Risk • The King Code of Governance for and systems satisfy (KPAs) stipulated in the Shareholder
the efficacy (EARC) South Africa (2016) (King IV) all legislative Compact
of internal • ATNS Management • Requirements of the Public Finance requirements • ATNS Safety Management System
controls • ATNS IT Steering Management Act (PFMA) of South but have limited (SMS) and SMS Policy
(including Committee Africa influence on the • CANSO and EUROCONTROL
fraud risk) • ATNS Risk Department • ISO standards relating to safety and control environment. Standards of Excellence
• ATNS Legal and environment There are areas
Compliance Department • ERM and compliance standards of improvement Environmental • ATNS Board of Directors • ICAO Standards and Recommended For 2017/18 financial
• ATNS Internal Audit including guidelines relating to the identified. management • ATNS Social and Ethics Practices (SARPs) year, 23 440.52 CO2e
function Risk Management and Compliance and Committee • Relevant Key Performance Areas resulted from ATNS
• External auditors: Institute of South Africa performance • Portfolio Project (KPAs) stipulated in the Shareholder operations. The
Rakoma and Associates • The Civil Aviation Act (Act 13 of Management Office Compact emission distribution
2009), supported by Civil Aviation • Sustainability Executive • National Environmental Management resulted in 86% tonnes
Regulations and Technical Standards Steering committee Act (NEMA) CO2e from scope 2,
• Key Performance Areas (KPAs) • Outcomes of the South African Civil 13% from scope 3
stipulated in the Shareholder Aviation Authority (SACAA) Aviation and 1% from scope 1
Compact Environmental Protection (AEP) (graph 13). Therefore,
Corporate • ATNS IT Steering • ICAO Standards and Recommended Controls Inadequacies Forum scope 2, electricity
Governance Committee Practices (SARPs) were identified, • Greenhouse gas (GHG) Protocol emissions, account
and regulatory • ATNS’s Internal Audit • The Civil Aviation Act (Act 13 of there is room for Corporate Standard for majority of the
compliance Function 2009), supported by Civil Aviation improvement. • Carbon Disclosure Project (CDP) carbon footprint.
(including IT • Compliance Function Regulations and Technical Standards
governance) • The King Code of Governance for Integrated • ATNS Board of Directors • The King Code of Governance for Board-approved
South Africa (2009) (King IV) Annual • ATNS Company South Africa (2016) (King IV) Integrated Report,
• Requirements of the Public Finance Reporting Secretary • Global Reporting Initiative (GRI) G4 consolidating financial
Management Act (PFMA) of South Sustainability Reporting Guidelines and non-financial
Africa • International Integrated Reporting information
• Companies Act Framework V1.0 (International Additional external
• Permission applications as mandated Integrated Reporting Council (IIRC)) assurance on
by the Regulating Committee in its • United Nations Global Compact certain aspects of
Approach Document (UNGC) the nonfinancial
• Relevant Key Performance Areas • Carbon Disclosure Project (CDP) sustainability
(KPAs) stipulated in the Shareholder information reported
Compact in the Integrated
• ATNS Code of Ethics Report.
8 9
ABOUT THE INTEGRATED REPORT CONTINUED
Statement of precautionary Board of Directors Approval
principle Statement
P.5
P.10
Airspace safety performance continues to be at The ATNS Board, assisted by its various
the core of our business. Air traffic movements committees, is ultimately responsible for
are expected to increase in future. Accordingly, the overseeing the integrity of the 2017/18 Integrated
P.3
P.15 flexible optimisation of airspace will contribute to Report.
safety and an operationally-efficient environment.
The Board has applied its collective mind to the
ATNS uses a ‘safety ratio’ to measure the number preparation and presentation of the Integrated
of safety events attributed to its operations per Report and has concluded that this report is
100 000 movements. The safety ratio enables us presented in accordance with the International
to verify that we are meeting safety performance Integrated Reporting Framework v1.0. The
targets. Data is collected and analysed to assess Integrated Report also contains Standard
our levels of safety performance. The safety ratio Disclosures from the GRI Sustainability Reporting
is calculated using a 12-month rolling average Guidelines.
method. Safety performance assurance and
investigation activities are both reactive and The Integrated Report was approved by the Board
proactive. on 22 October 2018, and signed on its behalf by:
ATNS provides safe operations by applying
‘separation standards’ based on Instrument Flight
Rules (IFR). With respect to air traffic control,
‘separation’ refers to the concept of keeping
aircrafts a minimum distance from each other to SIMPHIWE THOBELA
reduce the risk of collision, as well as preventing Chairperson
accidents due to wake turbulence. ATS authorities
stipulate minimum separation standards for 22 October 2018
airspace based on ICAO standards. Johannesburg
Root causes for safety events include human-
related errors and fatigue, and extends to external
factors such as weather phenomena, airspace
design, and complex traffic scenarios. ATNS’s
Risk Safety Index (RSI) matrix measures the
levels of safety risk according to the categories
of ‘probability’ and ‘severity’. The Index increases
risk visibility and supports management decision-
making. Safety meetings are held with General
Aviation at unit and regional levels to discuss safety
performance, hazards, risks and mitigations.
10 11
ORGANISATIONAL PROFILE
Vision The principal purpose of ATNS is to plan and
operate safe and efficient services in the airspace
FIGURE 1: ATNS CORPORATE STRUCTURE
P.16
for which the state is responsible through:
To be the preferred supplier of Air Traffic
Executive Authority and
Management solutions and associated services to
Regulatory Oversight
Regula areholder c Regu
• Airspace infrastructure provision; fet
y to Sh omi lat
the African continent and selected international Sa on
r
Ec
or
markets. • Development of human capital (ATC,
Minister of Regulating
Engineering Technicians and ATM and related SACAA Transport Committee
Specialists); and
Mission • Partnerships and collaboration with other
stakeholders.
To provide safe, expeditious and efficient Air Traffic
Management solutions and associated services
The economic regulation regime is specified
Accounting Authority
in Section 11 of the ATNS Company Act. ATNS ATNS Board
and Governance
Values cannot levy an air traffic service charge unless it
is in possession of a valid written Permission that
• Accountability provides a tariff regime to be charged to users
• Safety and customer service over a five-year cycle. The Permission is issued Internal Audit CEO Company Secretary
• Continuous improvement and innovation by the Regulating Committee, which is required
• Employee engagement and development to balance the interests of the Company with the
• Fairness and consistency interest of our clients, which includes the safe,
• Open and effective communication efficient, economic and profitable operation of
the Company. This encourages timely investment Executive
Executive Chief Chief Executive Executive
Legal ATM/CNS
and ensures that we are well placed to finance Counsel
Strategy & Financial Operations
Planning &
Commercial Human
Optimisation Officer Officer Services Capital
Nature and purpose of our our obligations and have a reasonable prospect of Standards
earning a commercial return.
business
The Company has its head-office at Eastgate Office Principal
Chief Chief Chief
• The Air Traffic and Navigation Service Company Technology Information Air Traffic
Park, Block C, South Boulevard Road, Bruma, ATA
Operations Services
Limited (ATNS) is a State-Owned Company (Postal code: 2198) in Gauteng.
(SOC).
• Established in 1993 in terms of the ATNS
Company Act (Act 45 of 1993) to provide air Organisational structure and
traffic management solutions and associated business model Corporate function Regulated Business
services on behalf of the State.
P.13
• ATM services accord with International Civil • ATNS is a state-owned entity incorporated as a The ATNS corporate function determines the The principal activities of ATNS’s regulated
Aviation Organisation (ICAO) standards and Company. direction of the Company as mandated by the business encompass the planning and operation of
recommended practices, and the South African Board of Directors. The CEO is responsible for safe and efficient services in the airspace for which
• A Board of Directors, appointed by the Minister
Civil Aviation Regulations and Technical formulating and executing the strategy. This the state is responsible. At present approximately
of Transport, provides leadership oversight
Standards. function ensures that ATNS Executives adequately 90% of ATNS revenue is generated through
and guides the implementation of the ATNS
plan and utilise resources as guided by the five- Regulated Business.
• ATNS is governed by South Africa’s legislative mandate.
year permission cycle. Departmental, operational
and administrative framework. • ATNS’s structure aligns with international and business plans also drive planning. The ATNS structure enables its unique value chain,
• ATNS is a commercialised ANSP operating on legislation, such as the International Civil which comprises three main blocks:
the “user pay” principle that relies on current Aviation Organisation (ICAO) ATM Operational Support function
revenues and debt funding for its operational Concept and Global Air Navigation Plan (GANP). 1. ATM Operational Concept and Global Air
and capital expenditure requirements. The support functions, such as Human Capital Navigation Plan (GANP).
(HC), Finance, Information Technology, and Risk
2. Enabling infrastructure and resources.
and Compliance create an enabling operating
environment governance frameworks, processes 3. ATM and technical support (TS) operations.
and professional practices.
12 13
ORGANISATIONAL PROFILE CONTINUED
FIGURE 2: ATNS REGULATED BUSINESS MODEL Traffic Movement Assumptions
With the ATM industry being strongly linked to growth in air traffic movements and overall economic growth,
Corporate function
ATNS projects the Company’s revenue based on expected growth in air traffic movements. The latter has a
• Strategic formulation/execution
• Planning (corporate/permission) high correlation to Gross Domestic Product (GDP) at approximately 80%.
REVENUE AND 2017/18 2017/18
2016/17 2018/19 2019/20 2020/21
REVENUE (ATM) (PREDICTED) (ACTUAL)
Revenue 1,376,490,388 1,433,597 1,402,408,229 1,497,917 1,590,736 1,722,529
Enabling/
ATM driving ATM Revenue ATMs 481,840 489,751 480,983 479,840 505,762 516,797
operational technology and TS
concept infrastructure operations AAGR
0.61% 1.64% -0.18% -0.24% 5.40% 2.18%
The ATNS Mandate
(Revenue ATMs)
Act 45 of 1993
Our customers
Note: There is a reduction of 0,18 % on revenue movements for 2017/18 FY when compared with the previous
FY due to a reduction in the route network, mainly for SAA flights and socio-economic drivers which drives
demand for air travel.
• ICAO block builds • Define enabling • Provide safe, efficient
• AFI plan technology and effective air traffic
• NAMP • Define driving technology services There is a reduction of 1,79% between predicted and the actual values of 2017/18 FY where an increase of
• ATNS roadmap • Develop infrastructure • Operate and maintain
• Airspace design • Deploy appropriate infrastructure and 1,64% was expected based on predicted figures. 2018/19FY – 2020/21FY figures are current forecasted values
– Procedures resources resources as at 1st October 2018.
– RNP/RNAV • ATNS CNS roadmap • Provide air traffic
management solutions
Air traffic service charges
ATNS AIR TRAFFIC SERVICE CHARGES FOR THE REGULATED BUSINESS
Support functions
• HR/training • Risk & compliance
• Finance • Information technology FORMULAS AND COEFFICIENTS (FCS)
MAIN MASS COST
CATEGORY COMPONENT AERODROME TMA ACCESS AREA
CHARGE CHARGE CHARGE
Air navigation services and infrastructure
VC R28,29 R28.29
Air navigation infrastructure and services consist FAOR < 5 000 kg BSC R114,94/10 000.MCM R114,94/10 000.MCM
of three main components: FC R60,64 R112,03
VC R28,29 R28,29 R28,29
1. Communications infrastructure, Navigation 5 000 kg < MCM <
infrastructure and Surveillance infrastructure. BSC R114,94/10 000.MCM R114,94/10 000.MCM R114,94/10 000.MCM
15 000 kg
2. Auxiliary aviation services, such as aeronautical FC R121,30/10 000.MCM R22,41/1 000.MCM R16,08/100 000.MCMM.d
information publications, flight procedure VC R28,29 R28,29 R28,29
design and aeronautical surveys.
> 15 000 kg BSC R140,75/100.√MCM R140,75/100.√MCM R140,75/100.√MCM
3. Air traffic management. FC R148,57/100.√MCM R274,43/100.√MCM R197,00/10 000.√MCMd
ATNS’s infrastructure and service development are Each rand-value coefficient in the table above is multiplied by:
informed by user expectations and regulatory
requirements at a global level, as well as new • 100% for a domestic flight;
technologies and the needs of the air traffic • 100% for a regional flight; and
management (ATM) community. • 100% for an international flight.
The above coefficient formula applies to all charges except in the case of FCs for aerodrome, and TMA access
charges at FAOR for aircraft with MCM
ORGANISATIONAL PROFILE CONTINUED
Aviation Training Academy Space-Based ADS-B Structure of ATNS’s operations management (ATM) service delivery component
is enabled by an advanced ATM system deployed
ATNS’s Aviation Training Academy (ATA) provides ATNS has partnered with the first global air at the Johannesburg and Cape Town air traffic
a full range of air traffic services training, traffic surveillance system using a space-based ATNS Services control centres and associated terminal control
technical support and related training. The ATA is Automatic Dependent Surveillance-Broadcast units using enabling technologies encompassing
also an ISO 9001:2015 accredited institution and (ADS-B) network. This system makes it possible ATNS’s services support seamless gate-to-gate communications, navigation and surveillance
has international cooperation agreements with to have surveillance of aircraft in areas where operations. This concept encompasses the taxi-out systems. The illustrated value chain (Figure 3) is
partners such as the Embry Riddle Aeronautical it is difficult to deploy traditional surveillance and departure, climb out, cruise, descent, arrival, scalable across the total user-demand spectrum in
University, ENAC and WITS, enabling the ATNS systems, or to augment the current surveillance landing and taxi-in phases of a flight. The air traffic the South African airspace.
ATA to maintain mutually beneficial partnerships capabilities of the region. The system will enable
in the presentation and accreditation of ATS real-time transmission of ADS-B reports from
international courses. The ATA holds full equipped aircraft, to Air Traffic Management (ATM) CURRENT AND NEW PRODUCTS AND SERVICES
ICAO Trainair Plus membership and has been automation platforms and Air Traffic Controllers
designated by ICAO as a Regional Training Centre (ATCs) in every Flight Information Region (FIR). EXISTING PRODUCTS AND SERVICES NEW PRODUCTS AND SERVICES
of Excellence. The ATA is currently pursuing IN DEVELOPMENT
registration as an academic institute with the ATNS has established a Processing and
Department of Higher Education and Training. Distribution point in South Africa to distribute Air Traffic Flow Management (ATFM) Collaborative Decision Making (CDM)
this space-based surveillance data for the region. Training Information/knowledge services, (e.g. SMS,
Non-regulated business Due to the critical and time-sensitive nature of A-SMGCS, 4D) management information
the surveillance data, the distribution option
would need to have redundancy and could include Air Traffic Services (ATS) – Air Traffic Control (ATC) Carbon credits (efficient procedures/technologies)
ATNS’s non-regulated business currently
terrestrial links as well as the upgraded VSAT and Aeronautical Information Management (AIM)
contributes approximately 10% of the Company’s
revenue. The non-regulated business encompasses network stated above.
a long-term strategy to facilitate regional African Centralised Aeronautical Database (A-CAD) NAVAIDS Flight Calibration
expansion through a division vehicle presently AIS to AIM Roadmap Implementation
known as “ATNS International”. The division will Engineering and Technical support New consulting services (high visibility ATM event
enable the Company to take a more robust and ICAO has identified the need for global aviation planning e.g. ASBU)
agile stance in the non-regulated business market operators to follow unified and integrated Aeronautical Billing & Collection Service AIS to AIM Transition
without posing undue risks to its regulated market processes for ATM as described in its vision
and Shareholder. It will also enable ATNS to enter statement: “To achieve an interoperable global air Aeronautical WGS-84 Survey ATMS Support Tools
joint ventures and partnerships with external traffic management system, for all users during
Consultancy Services Space Based ADS-B
companies to harness more valuable market all phases of flight, that meets agreed levels of
opportunities while extending its regional influence safety, provides for optimum economic operations, Airspace Management
and reach. is environmentally sustainable and meets national
security requirements”. Flight Procedure Design
The following are some of the major regional based
projects that ATNS’s non-regulated business has Therefore, in line with ICAO’s vision, ATNS has MARKET SEGMENTS AND GEOGRAPHIC MARKETS
embarked on. focused on guiding aviation decision makers in
the region to ensure that the changeover from CURRENT MARKETS NEW MARKETS
VSAT Network Value-added Services AIS (Aeronautical Information Service) to AIM
(Aeronautical Information Management) happens RSA – Statutory Selected global and African ATM markets
ATNS has recently upgraded the VSAT network in a planned and measurable method. This is to
RSA – Contractual
platform from a legacy protocol-based system to ensure that we comply with the overall objectives
an IP enabled platform. The new platform creates of global air traffic management. SADC – Prioritised
an opportunity to provide value-added services into
the region, as well as to improve aviation systems ATNS has established a regional Aeronautical
and services. The current services on the network Information database, which is one of three on
include AFTN, AMHS and voice services. ATNS is the African continent. The goal of the database
currently determining the feasibility of utilising is to ensure that Aeronautical Information
this as a telecommunication platform for services Management in the region benefits from high
such as Space-Based ADS-B and the Regional levels of automation and consequently high levels
Aeronautical database mentioned below. of Aviation Safety.
16 17ORGANISATIONAL PROFILE CONTINUED
FIGURE 3: ATNS SERVICE OVERVIEW
Cruising Descending Holding
Phases of flight Taxiing Take-off Climbing Climbing Landing Taxiing
Fly-over Descending Letdown Fly-over
Controlled Airspace Control Zone Control Areas Airways Control Areas Control Areas Control Zone
Search and rescue (if required)
Pre-flight planning
En-Route Sectors
Area Control
Terminal/ Reporting Points Terminal/
Approach Approach
Control Control
Aerodrome Aerodrome
Control VOR/DME NDB VOR/DME
Control
NDB VOR/DME VOR/DME
VOR/DME
Communication Air – Ground Ground – Air Radio & Data Link
ILS ILS
Navigation NDB VOR/DME & NDB NDB
VOR/DME VOR/DME
Surveillance Primary En-Route Radar Cover Primary
Secondary Primary and Secondary Secondary
Radar Visual Radar Visual
18 19ORGANISATIONAL PROFILE CONTINUED
FIGURE 4: ATNS’S PRESENCE IN SOUTH AFRICA FIGURE 6: ATNS’S EXTENDED SERVICES ON THE AFRICAN CONTINENT AND BEYOND
Polokwane
Pilanesberg Kruger
Mpumalanga
International
Mafikeng
ACSA Airports
Wonderboom
Regional Airports Lanseria
Grand
Central
Rand OR Tambo
ATNS service reach: International
• Aerodrome and approach control
Upington
services: 9 ACSA airports
• Aerodrome services: 12 regional Kimberley
airports Bloemfontein
• Approach procedural services: Pietermaritzburg
4 regional airports
Virginia
Additional services: King Shaka
• National Aeronautical Information International
Management and Oceanic Control Umtata
services
• Operates Aeronautical Rescue
Coordination Centre on behalf of
the DoT Bisho
East London
Cape Town Port Elizabeth
International George
FIGURE 5: ATNS AFRICAN INDIAN OCEAN (AFI) REGIONAL AIRSPACE COVER Aeronautical Surveying
Aeronautical Documentation
20°
Charting
18S
010W Flight Procedure design
scarr
agaasca
Madagascar Training
MMaaddag
26SS AIM
30° 040E
Other projects
30S 30S
South Africa 040E 057E Billing
Current SADC VSAT satellite communication
35S 35S direct speech interconnectivity
40° 075E 075E
Current NAFISAT satellite communication
direct speech interconnectivity
ASECNA region and SADC region VSAT
direct speech connectivity via Antananarivo
50° 0° 10° 20° 30° 40° 50° 60°
Interconnectivity between SADC and
ASECNA networks
Future planned circuits
SADC
2%
NAFISAT 3% 2%
South Pole 3%
AFISNET/ASECNA
Figure 5 depicts ATNS’s current and potential new markets in the AFI region. ATNS bases its selection of the
markets on the following criteria: GRAPH 1: SPLIT OF ATNS REVENUE SOURCES
l En-Route and approach fees
• Analysis of external market research and intelligence gained through customer engagements. l SADC VSAT 11
• Countries where ATNS already has established contracts and good working relationships. l Small Aerodrome Fees
• ATNS’s current capabilities and what is required to build and extend these to new markets. l NAFISAT revenue
• Current and potential revenue contributors. l Other
• Strategic intent for the organisation’s long-term aspirations.
90%
20 21ORGANISATIONAL PROFILE CONTINUED
Contextualising our operations Committee (RC) and aims to balance the interests
of the Company with those of our clients. This
FIGURE 7: PERMISSION MODULE OVERVIEW
encourages timely investment and ensures that we
Regulatory context are well placed to finance our obligations and have F
fic le En uturviro e Op
a reasonable prospect of earning a commercial raf ir Defi
P.13
The international aviation regulatory environment N S T Modu core aual sat nes th
nm era
ent tin
return. AT cast t h e n n Sou isfy th e act Mo g
e for he a , dul
was formed through the International Civil Aviation For and s. T riffs
e
th A e re vitie
f q
i
s e
Organisation (ICAO), a specialised body of the dem rvic h ta ffic r
Ma ican irem of AT u
The RC is a statutory body formed and appointed s the rol se er wit ak tra nd s
imp erplt N a e n N S
e r nt th e a le an tiona ts of to
United Nations Organisation responsible for by the Shareholder, the DoT and RC is empowered Cov fic co , toge ue. P esign ce con ment (NAN l Airs the
traf traffic revenated d airspa the ATN tained the ini P) and pace
global civil aviation. ICAO was established through by the ATNS Company Act to issue the Permission es el of w ti
driv the r ation ine ho ness S
with ATM within atives
the Chicago Convention, signed by participating to ATNS, which regulates the increase in specified an nfigu eterm ) busi
d r
of t in th Roadm the
nd
co ors d tline ed.
The an traffi ipme ule ( ion o
he e co ap
states in 1944. South Africa is a signatory to App Permi ntext
) fo erest paramaffic, a
n is
Humm the e equ x Mod nisat n the
tariffs that ATNS can issue and prescribes t
sec re (fro organ
mp ost of rs
fro
lica ssio
fron Capi c m nt co i.e. t f
c ete
the Convention and has acceded to abide by the co
fromf the C r and f depe tion a gy
is tion n
c
minimum service standard requirements for the
dul mi
.
Cap taff con Mod as welent
ATN al M
o
r
tlin tal P odul mp he
.
terms and conditions. In terms of Article 28 of the
any
num tline config techn other
cap n, in icin al) t
fron tor ling The ow
regulated business.
Mo Econo
th ape orga nd o nd
cro NS
es
i
(infl sets th ate (a e
S H odu ent ofows
t
r th and
sec enab ent). ents fl
Chicago Convention, the South African Government
atio e p nnu
be staf ura olo
the ironm pon m the
env ff com y fro taff.
g
AT
e co
um le
is required to provide air navigation services and
sta largel line s
-
As per the regulations, the Permission formulation
la
r
a
infrastructure in compliance with the Convention
m
n
process must commence in the third year of the
t
Ma
eg
pon
fron
and as promulgated from time to time by ICAO.
e,
alsos aggr
current permission. A new permission process
ital
u
t
le
commenced in 2017 after the RC issued an
Eight modules
fl as
on
ve
ATNS’s regulated business is carried out in its
the
Approach Document to industry in December
Dri
l
capacity as a State-Owned Company (SOC), 2016. After extensive consultation between that assist in
mandated under Act by its Shareholder, the ATNS and industry stakeholders throughout building
the minist y the ll as s uirem ated
the permission
leve fore t tive e taff or tutor nts. T to the
Ad iven b as we .) req ggreg ule.
com audi onen pex P
The of ac e ope pend nisa (gove ese
CAP asis force Pla pital
le
Department of Transport (DoT). Given its monopoly 2017, a permission application was made to the
tha ual
Mo pendit he ca maint the to and .
dr
me ase
re
pan c div agg rms
pro eeds raffic e com xpend large
Ma le, i.e e ove tal ba ned. l
ven exp ed by egate
odu
ex
com traffi ly the ple te er,
l
pan ting, ts ar lan M
ann tivity ratio iture tion rnan
B nan
application
du
is p ich in s toge her
tn
status, this business is regulated by the Regulating
ATN odu
req nditu the
com
.
EX
RC in November 2017. The RC has concluded
vide to
inte . th r ti se
uire re b
ancATNS
nt’)
th
eM
y,
wh odule the ot
r
ra
Committee [RC], a statutory body established by
M
h
its deliberation on the permission application
p
s t be
S
ur
t n th al e are
ure sim
the DoT to regulate ATNS’s economic activities. made, after considering all comments received.
the n
etc e a
m ies
id
O
i
s
e
e
x
Fin
le
ca
pi
It subsequently submitted its decision and final
T
driv pa
n
Economic regulation
(‘re y’s
ue
m
ta
report to the Honorable Minister of Transport.
es ny, res
g
OpeATNS tion
e
a
ai
rati istra
s
Mai and ons in le
od
e
AdmModu tive
y
The economic regulation regime is articulated The current Permission (2018/19 – 2022/23) was nt
ta
Modenanc
i
tra re
t
inis ures a the
u
of t ce,
Th
in
in Section 11 of the ATNS Company Act (45 of approved by the Minister of Transport in terms th e an ule e m
h
d
A nd i t by e
en of th ory
he
nua
t e to
ly
e
1993), which specifies that ATNS cannot levy air of Section 11 of ATNS Act.1993 in September the he comtal lev l traffic exp ly driv ation statut .)
Cap per pan el of
o e is s tc
traffic service charges unless it is in possession 2018. This approval by the Minister has been driv larg organ ell a ting, e
the ex Mo ationa y, and activity es f f s w d i
of a valid written Permission that provides for a promulgated and gazetted, thus authorising ATNS M b a d u l ex t h e in sta ny, a ce, au ents.
ove odule sis of t le is a pendi refore pa an m
r tim , i.e he t th t u comovern equire
tariff regime to be charged to users for the use of to levy tariff charges for the 2018/19-20122/23 e p . the Main e sa re. Th (g r
nee rovide capit tenanme tim e
air navigation infrastructure and/or the provision period. ds t s th al e ce P e
o be e ca xpe la
of an air traffic service over a five-year period. ma pital nditu n
inta b r
ined se t e
a
The said Permission is issued by the Regulating Read more on ATNS’s Permission cycle on page 24. . hat
22 23ORGANISATIONAL PROFILE CONTINUED
FIGURE 8: PERMISSION MODULE INTERDEPENDENCIES Global business context networks in the last 10 years. Ethiopian Airlines,
with its hub at Addis Bole Int Airport, is one of
the Continent’s largest carriers with an extensive
Aviation provides the only world-wide
regional and intercontinental network, consisting
transportation network2:
of one of the youngest and most technologically-
TRAFFIC MACRO- FINANCE advanced fleets globally.
FORECAST ECONOMY PLAN • More than 3,3 billion passengers travel annually
(7,3 billion world-wide by 2031).
• 52 million tonnes of cargo is transported by air National context
travel.
Cost of Non-regulated
• 40% of international tourists now travel by air. Numerous private airlines have entered the
Ann. Traffic Small Airport Capital Tariffs
(regulated) Traffic (non-reg) domestic market in recent years. Historically,
Economic • Aviation generates 58 million jobs globally. South African Airways (SAA) had monopolised the
Variables
Peak Sector Regulated • Economic impact is estimated at US$2,4 trillion. market since 1934 until the early 1990s, when the
Borrowings
Traffic Configuration Tariffs industry was deregulated. SAA began the process
• At least 1,570 Airlines/22,000 Aircraft. of transitioning to a commercial airline in a
• Over 50,000 routes/100,000 flights per day. liberalised international market (Goldstein, 1999),
making it difficult for new airlines to compete with
• 1,670 Airports and 160 Air Navigation Service
SAA. At the time, SAA held approximately 95% of
Providers.
the market share (Oosthuizen, 2013).
Regional context South Africa has seen many entrants since the
industry’s deregulation in 1990. Flitestar was the
first South African airline to enter the market after
Air travel in Africa has grown strongly and much
deregulation, followed by other entrants such as
FUTURE HUMAN faster than the rest of the world. IATA projects
OPEX Comair, Nationwide and Sun Air. By 2006, Sun Air
OPERATING CAPITAL that the airline industry in Africa will continue to
PLAN and Comair had managed to erode SAA’s market
ENVIRONMENT PLAN
grow in passenger numbers at an annual average
share to 66% on the Cape Town-Johannesburg-
rate of 4.7% by 2034, faster than regional markets
Durban routes (Goldstein, 1999). Sun Air however
in North America and Europe whose growth is
went bankrupt in 1999 and ceased operations.
AOM forecast at 3.3% and 2.7%, respectively (IATA,
Phoenix Airlines, Nationwide, Velvet Sky, Intensive
AO Administration ATS 2014). To meet this demand, there has been entry
DCB Air and 1Time all entered the market; however,
TS Other Staff and expansion of numerous airlines.
after a few years in operation, they too encountered
CM
AUO Operations ETS financial difficulties and closed operations. Other
National carriers, such as Kenya Airways and
ATMSDM late entrants include Kulula, Mango, FlySafair,
Ethiopian Airlines, have been the most successful
CEM Air, Skywise and Blue Crane. Apart from the
in terms of growth by scale and scope of their
national carrier’s subsidiary, Mango, of the 11
route networks as mid-hemisphere full-service
airlines that entered the market between 1991
hub-based carriers LCCs are also quickly entering
Legend and 2012, only a few are still operational, such as
markets throughout the region and gaining
AO – Aerodrome Operations MAINTENANCE PLAN Comair’s Kulula.
AOM – Airspace Organisation market share. In the South African domestic
Management arena, they are the dominant carriers (ASM Traffic
ATS – Air Traffic Services Development Plan – ACSA, 2015). Developmental context
AUO – Airspace User Operation
CM – Conflict Management
CAPEX
PLAN Africa’s air travel connectivity has improved in As a State-Owned Company, ATNS aims to support
DCB – Demand Capacity Balancing
ETS – Engineering Technical
recent years. This is partly due to the increase governmental socio-economic outcomes – which
Services in legacy carriers on the Continent – Ethiopian aim to eliminate poverty and reduce inequality by
Airlines, Arik and Kenya Airways – that have added the year 2030 through the National Development
significantly more routes and destinations to their Plan (NDP).
Equipment
Facilities 2
Source: Industry Economic Performance 2017
24 25ORGANISATIONAL PROFILE CONTINUED
Statement of Strategic Intent and guided by the Medium-Term Strategic Framework
KPA BUSINESS OBJECTIVES OBJECTIVE MEASURES FOR 2017/18
(MTSF), implemented by the South African
Shareholder Compact Government to measure the NDP’s enabling
NO.
milestones. 2.2 Operation of the satellite communication Optimise revenue and ensure network
ATNS’s activities are informed by the Minister of networks: SADC VSAT 2. availability.
Transport’s Statement of Strategic Intent as well as The DoT, and by extension ATNS, focuses on the
our Shareholder Compact, concluded annually with implementation of four of the 14 outcomes for 2.3 Operation of the satellite communication Optimise revenue and ensure network
the Shareholder Minister. The business is further Government to achieve related MTSF outputs. networks: NAFISAT. availability.
3. DoT Outcome 9: The fight against fraud and corruption
SHAREHOLDER COMPACT: BUSINESS OBJECTIVES AND OBJECTIVE MEASURES
3.1 Comply with relevant legislation, regulation Full compliance
KPA BUSINESS OBJECTIVES OBJECTIVE MEASURES FOR 2017/18 and standards.
NO.
3.2 All whistle blowing matters reported are Fighting corruption and promoting good
1. DoT Outcome 3: Transport safety and security investigated governance.
1.1 Risk Safety Index (RSI). Reduce the risk associated with safety events. 4. DoT Outcome 10: Environmental protection
1.2 Safety service provision. Increase successful safe operation. 4.1 Implementation of environmental plan. Measure ATNS Carbon footprint.
1.3 Operational efficiency. Reduce overall traffic delays.
Performance assessment.
1.4 Operational efficiency. Achievement of CNS Systems Availability.
5. DoT Outcome 5: Training to contribute to job creation
1.5 Ensure commercial sustainability. Ensure financial sustainability.
5.1 Address societal challenges, thereby building ATS bursaries and engineering learnerships.
PBN Operational Enhancement. PBN Roadmap implementation.
a meaningful legacy for ATNS and the
1.6 Independent Parallel Runway operations at communities in which we operate.
FAOR.
5.2 Manage the training pipeline for ATS and Adoption and approval of HC plan as per budget.
2. DoT Outcome 6: Infrastructure development and high-level investment plan for Transport technical staff.
ATS and TS training plan.
2.1 Development of optimised and efficient aviation Approved CAPEX
infrastructure in a cost-effective manner. Commitment Plan for 2017/18. Operational or implementation plan.
5.3 Review and implement the HR plan to recruit, Development programmes for employees, with
FIGURE 9: ATNS REGULATED BUSINESS MODEL develop, retain, and reward employees across emphasis on AIC and women.
all disciplines.
6. DoT Outcome 4: Broad-Based Black Economic Empowerment (B-BBEE)
6.1 Achieve B-BBEE targets. Percentage of discretionary spend on B-BBEE.
Outcome Outcome Outcome Outcome Achieve preferential procurement targets as Total discretionary OPEX budgeted.
3 4 6 10 set by the Transport Charter.
Total CAPEX budgeted.
7. DoT Outcome 4: Employment equity
7.1 ATS EE targets (AIMO, ATSO, ATCO 1-3). Achieve representation towards alignment of
Decent employment An efficient, competitive Protect and enhance our
A transport sector
through inclusive economic and responsive economic environmental assets and
Company staff profile with the demographics of
that is safe the country.
growth infrastructure network natural resources
7.2 ATNS EE targets. Increase representation of black (AIC) racial
grouping - with a particular focus on African
and female representation - towards creating
alignment with the demographics of the country.
26 27ORGANISATIONAL PROFILE CONTINUED
Commitments to external initiatives
• ICAO collaborates with member states, industry and international
organisations to develop the ASBU concept. Mr Simphiwe Thobela Mr Thomas Kgokolo Mr Matome
Advocate EdwinMoholola
M. Mphahlele
The ICAO Aviation Chairperson Interim CEO Chief Financial Officer (Acting)
• ASBU helps to ensure the following operational imperatives: Chairman
System Block
Upgrades (ASBU) »» Maintaining and enhancing aviation safety.
»» Harmonising air traffic management improvement
programmes.
»» Removing barriers to future aviation efficiency and
environmental gains at a reasonable cost. Leadership review
• ATNS fully endorses the ASBU initiative in setting the framework
for globally harmonised air traffic management.
This Integrated Report is a ‘transitionary report’ business in South Africa through reliable, cost-
in several respects. Not only are we transitioning effective and efficient air traffic navigation services
into a new dispensation of Shareholder oversight, on the one hand, and on the other, to ensure that
• ATNS is a founding member of the Indian Ocean Strategic with the appointment of a new Shareholder we do our part to achieve Government’s greater
The Indian Ocean Partnership to Reduce Emissions (INSPIRE). Minister, represented by Dr Bonginkosi Emmanuel development aspirations. These aspirations
Strategic Partnership • INSPIRE is a partnership with airlines, ANSPs and airport Nzimande, we also transitioned from the previous are clearly articulated through the National
to Reduce Emissions partners to address aviation’s impact on the Environment. King III governance framework to the new King Development Plan (NDP) and, more recently, by
(INSPIRE) initiative • INSPIRE is a collaborative partner network across the Arabian Sea IV principles-based framework during the year, President Cyril Ramaphosa in his 2018 State of the
and Indian Ocean region dedicated to improving aviation efficiency which in many respects has guided our integrated Nation address. This dual mandate is not always
and sustainability. reporting. Further, strategy development and an easy balance as we consider the trade-offs
Governance oversight are being transitioned to between commercial benefits and developmental
new leadership with a new interim Board being priorities.
appointed by the time of publishing this report.
• ATNS is a founding member of the Civil Air Navigation On behalf of ATNS management, we wish to convey Air traffic navigation is a global business, which we
Organisation (CANSO) in Africa. our earnest support to the new Minister and to the manage at a country level. When we consider our
Civil Air Navigation • ATNS hosts the CANSO Regional Office in Africa. interim ATNS Board. strategy and planning for the provision of services
Organisation (CANSO) for South Africa, we not only look at our domestic
This integrated report is being published during needs, but also at what is happening globally and
the celebration of the Nelson Mandela Centenary regionally on the rest of the continent. In addition,
year. In the spirit of commemoration, we need we look at how aviation caters for peoples’ needs,
to ask ourselves how we, as a company and as and the needs of businesses and indeed that of
individuals, are ‘living his legacy’. Are we actively entire economies. Aviation is, the only true global
• ATNS Carbon Emission Inventory and footprint is calculated using dismantling inequalities where we find them? Do transportation mode that is capable of reaching
best practice methodology to account for all greenhouse gas (GHG) we aspire to excellence in all we do? As a State- land-locked cities and coastal areas alike. Air
The GHG Protocol
emissions released as a result of its operations. Owned Company (SOC), do our strategy and plans Transport is not an end in itself but a means to
Corporate Standard
• ATNS calculates its carbon inventory in accordance with the GHG contribute towards the vision of a sustainable an end. It serves as a conduit to opportunities,
Protocol Corporate Standard. future, not only for the Company, but for the real or imagined. Different States and people with
national aviation industry, the domestic economy, diverse cultures and interests are brought together
the people of South Africa and the pursuit of safer through aviation. With the advent of technological
African skies? Former president Nelson Mandela innovation, especially in the past five years, the
• To ensure superior achievement of “Absorptive Capacity” and will be remembered for his many extraordinary world has become a smaller place.
to promote strategic collaboration, ATNS has established a qualities, one such being his desire to act in the
University of
strong coalition with the University of Pretoria’s Department of best interest of the ‘many’ to ensure a prosperous Africa is home to 12% of the world’s people, and yet
Johannesburg
Electrical Engineering and Computer Systems in the areas of future for all South Africans. As an SOC, we have it accounts for less than 1% of the global air service
(Leadership)
telecommunication. the dual mandate of contributing to South Africa’s market.1 That said, we are observing increasing
• This initiative builds capacity and learning opportunities for economic wellbeing by reducing the cost of doing commercial interest in Africa from foreign shores,
undergraduate and postgraduate engineering students from
historically-disadvantaged backgrounds. 1
http://www.worldbank.org/en/topic/transport/publication/open-skies-for-africa.
28 29ORGANISATIONAL PROFILE CONTINUED
particularly from the Middle East and Asia. Many we want to build Africa’s global competitiveness. a prosperous, interconnected African continent, fairly involved and includes consultations with
new airports are, for instance, being developed For decades, there have been efforts to get the based on inclusive growth and sustainable industry stakeholders and culminated in a Joint
around the continent by Chinese consortiums. This African union to follow the example of the ‘single development. Consultation Report from ATNS and the Industry.
growth is very positive for the region, with new sky’ initiative implemented by the European The Joint Consultation Report is a reflection of the
on-the-ground infrastructure being built; however, Commission, to make the entire continent one ATNS’s Financial performance constructive and positive nature of the consultation
the ratio of traffic movements in Africa is still very connected, free airspace for civilian aircraft. meetings. During the consultations consensus
low (approximately 2%) relative to other first-world Under the Single European Sky initiative, the Total revenue for the year at R1,594 billion (2017: was reached on most issues, with remaining
regions, where air traffic is constantly growing, design, management and regulation of airspace is R1,557 billion), reflects a 2% improvement on the issues being resolved through active engagement
which means the cost of aviation – and hence the coordinated throughout the European Union (EU). prior year. The minor improvement in revenue is between ATNS, the RC and the Industry.
cost of doing business using aviation on the African Air traffic management in the European Union is mainly due to a slight increase in tariff revenue
continent – remains largely prohibitive. largely undertaken by member states, cooperating as a result of increased movements. Technical The newly-approved permission will replace
through EUROCONTROL, an intergovernmental the 2015/16-2019/20 permission. The current
maintenance and training revenue also contributed
There are also politically-motivated reasons for organisation that includes both the EU member permission dispensation, as approved, is in its first
to increased revenue. Operating costs increased by
Africa’s historically under-served air-movement states and most other European states as well. year of a five-year permission period.
6% to R1,382 billion (2017: R1,300 billion) mainly
status. Many African countries have restricted their The initiative organises airspace into functional
due to increased staff costs, telecommunication
air services markets to protect the share held by blocks, according to traffic flows rather than to
state-owned air carriers, a practice that originated national borders. Such a project was not possible
expenses as well as the impact of the fluctuating Non-regulated business
foreign exchange rates on our administration
in the early 1960s when many newly-independent without common rules and procedures at European
and contract maintenance costs. Capital ATNS’s non-regulated business currently
African states created national airlines, in part level. As Africa, we need to get to a similarly
expenditure decreased by 0,7% to R305 million contributes approximately 10% of the Company’s
to assert their status as nations.2 However, as coordinated arrangement to truly benefit from the
(2017: R307 million). Our balance sheet remains revenue and encompasses a long-term strategy
commercial interest in Africa trade rises, many AfCFTA agreement. During the reporting year we
sound with a liquidity ratio of 4.6:1 (2017: 5.2:1), to facilitate regional and continental expansion.
are recognising the detrimental impacts this saw some positive steps towards this outcome.
with our gearing ratio at 0,5% (2017: 0%). As Revenue from this sector of the business
protectionist attitude has had on air safety records, On May 18, ministers of justice and attorneys-
such, ATNS is well positioned to raise funding for is, however, below budget by R22,9 million
inflated air fares and negative air-traffic growth general from the Common Market for Eastern
imminent capital expenditure. Cash generated (21,5%) due to SADC VSAT II and NAFISAT Flight
on the continent. With this, and the fact that and Southern Africa (COMESA)4 region approved
from operation decreased by 15% to R366 million Information Region (FIR’s) crossing movements
African countries have continued to charge each an agreement for the creation of a single airspace
(2017: R431 million), mainly due to financial being lower than initially anticipated and currency
other to trade long after the European Union had for its nineteen (19) member bloc. The open skies
difficulties faced by some of our major customers fluctuations.
established a single market, Africa, as a collective, agreement guarantees a free market for the bloc’s
as well as increased operational costs.
has remained uncompetitive on the global airlines by abolishing restrictions on, among other
platform. A gradual ‘loosening’ of restrictions in things, routes, frequencies, number of selected These multilateral regional agreements facilitate
We have introduced numerous interventions to communication between ATSUs via satellite links
recent years, coupled with the new Agreement on airlines and type of aircraft, while market forces
accelerate capital expenditure delivery going and are managed by ATNS and IATA under a seven-
the African Continental Free Trade Area (AfCFTA) determine pricing. Although the approval of the
forward. A Portfolio Programme Management year contract. The current dispensation is running
launched in March 2018, will see a quickening unified airspace does not lead to an immediate
Office (PPMO) has been introduced to oversee the from 2015 to 2022.
of air-traffic movements as trade flows between opening up of the skies, it creates a foundation to
execution of projects and to ensure they adhere
countries with no (or reduced) import tariffs. establish more legal, regulatory and institutional
to stringent project management principles. We Increased air traffic movement on the continent
Some 44 countries out of 54 signed the free trade regional frameworks to enable unrestricted cross-
also established the CAPEX Delivery Framework to will be the backbone of our long-term financial
agreement, while 27 went even further, allowing border flights and boost trade across the region.
provide a structured approach to investment and sustainability as there is little room left in the
the free movement of all persons within African Ultimately, the SADC states and North East Africa –
countries. According to credit ratings agency in partnership with ATNS and the International Air to enhance oversight of CAPEX implementation local market to improve our bottom line. As the
Moody’s, countries such as South Africa, Kenya Transport Association (IATA) – have demonstrated projects for both the Executive, Board and other new interim Board and executive leadership,
and Egypt are most likely to benefit given their that harmonised regional service provision is stakeholders. Strengthened Supply-Chain we are eager for the business to explore the
large manufacturing bases and relatively robust achievable and brings improved and sustainable Management will further improve our asset- international expansionary aspirations articulated
infrastructure, particularly given their access to infrastructure. creation value chain. and set in motion by our predecessors. The
electricity.3 business rationale is sound; however the timing
We look forward to seeing tangible results Permission application for actualising this vision depends on our ability
While the AfCFTA will benefit African trade as opportunities arise following the AfCFTA to stabilise and position our internal systems,
relationships, which would no doubt boost air agreement; and as the continent unfolds the bold Revenue, based within the regulated business, processes and human resourcing capabilities for
traffic on the continent, there is still more to do if vision of the African Union’s Agenda 2063 towards is guided by the outcome of tariff applications to this pioneering journey.
set prices – through a Permission Application.
ATNS’s permission application was submitted to A critical lever of our expansion strategy is our
2
http://www.worldbank.org/en/topic/transport/publication/open-skies-for-africa
3
https://www.businessinsider.co.za/sa-to-benefit-most-from-africa-free-trade-area-2018-3
the Regulating Committee in November 2017. internationally-recognised and ICAO-accredited
4
Formed in December 1994 The process of compiling the Permission is aviation training academy (ATA), which is
30 31You can also read
