20INTEGRATED REPORT AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED

 
20INTEGRATED REPORT AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED
20
INTEGRATED REPORT
AIR TRAFFIC AND NAVIGATION SERVICES
SOC LIMITED
20INTEGRATED REPORT AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED
01   Our reporting approach
     Our report navigation

     Our reporting suite
                                                                2
                                                                2
                                                                4
     Our reporting approach                                     6
     Overview of ATNS                                           9
     Our year in review                                        10

02
     Chairman’s statement                                      12

     Our business                                              16
     Our organisation at a glance                              16
     Our geographic reach and services                         20
     Our external environment                                  22
     Our business model                                        24
     Our materiality themes                                    31
     Our stakeholders                                          41

03
     Our performance against our 2020 strategic imperatives    44

     Our strategy                                              48
     Chief Executive Officer Delegated’s review                48
     Our 2025 strategy                                         52

04
     Our risk and opportunity management approach              54

     Our governance                                            58
     Our approach to governance                                58
     Our board                                                 64
     Our executive committee                                   70
     Our board committees                                      72

05
     Our remuneration practices                                78

     Our performance                                           84
     Chief Financial Officer’s overview                        84
     Our value creation through the six capitals               87

06
     Our performance against our corporate objectives         128

     Our ancillary information                                134
     Our consolidated five-year review                        134
     List of abbreviations                                    138
     Our company information                                  140

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20INTEGRATED REPORT AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED
Our reporting approach

                         01
                              Our report navigation                                 Materiality themes                                    Key performance indicators
                                                                                                                                                            Actual performance met
                              Throughout our reporting suite, the following                Safety and health, first and foremost
                                                                                                                                                            or exceeded
                              icons are used to show the connectivity between
                              sections. The navigation icons are used to link our                                                                           Actual performance almost
                                                                                           Operational and financial resilience
                              strategic pillars and resources to our materiality                                                                            met target
                              themes and key performance indicators.
                                                                                           Technology and industry
                                                                                                                                                            Performance did not meet target
                                                                                           future-proofing
                              Capitals
                                                                                           Sound governance and
                                      Financial capital                                    regulatory compliance

                                      Human capital                                 Selected Sustainable Development Goals
                                                                                    As part of our 2025 strategy, we have prioritised the following sustainable development goals (SDGs) to
                                      Intellectual capital                          ensure our business is environmentally, socially and economically sustainable:

                                      Manufactured capital                                  Good health and well-being                                      Sustainable cities and communities

                                      Natural capital                                       Gender equality                                                 Climate action

                                      Social and relationship capital                       Affordable and clean energy                                     Life on land

                                                                                                                                           PEACE, JUSTICE
                                                                                                                                           AND STRONG

                                                                                            Decent work and economic growth                                 Peace and justice strong institutions
                                                                                                                                           INSTITUTIONS

                              Strategic pillars

                                      Service excellence

                                      Sustainability

                                      Innovation
                                                                                               We pride ourselves on providing safe and
                                                                                            efficient service across the African skies.

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20INTEGRATED REPORT AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED
Our reporting approach

                         Our reporting suite
                         We are committed to report openly and honestly
                         to our broad range of stakeholders. Our reporting      In addition, our reporting suite
                         suite comprise our:                                    aligns to:
                          IR Integrated Report                                      The International Integrated
                                                                                    Reporting  Framework
                         Our integrated report is the primary report to             (the  Framework)
                         our stakeholders. It is structured to show the
                                                                                    The GRI’s Sustainability Reporting
                         relationship between the interdependent elements
                                                                                    Standards (GRI standards)
                         involved in our value creation story.

                         AFS Annual Financial Statements
                                                                               About ATNS
                         The annual financial statements provide a
                         comprehensive report of ATNS’s financial               At Air Traffic and Navigation Services SOC
                         performance for the year.                              Limited (ATNS), we pride ourselves on
                                                                                providing safe and efficient service across
                          IV King IV Application Register                       the African skies.
                                                                                We are responsible for the provision of air
                         A schedule of our application of the King IV Report
                                                                                traffic control services throughout South
                         on Corporate Governance for South Africa 2016
                                                                                Africa, as well as a large part of the Indian
                         is available on our website at: https://atns.com/
                                                                                and Atlantic Ocean regions, which comprise
                         reports/2020/ATNS_KingIV.pdf.
                                                                                approximately 6% of the world’s airspace.

                         GRI GRI Index                                          We strive to be the leading provider of air traffic                                                                            Who we are:
                                                                                management solutions in Africa; providing
                         Our GRI index summarises our disclosures, many         quality service, client satisfaction and ethical                                                                          A trusted provider of safe and
                         of which are cross-referenced to this IR , as they     leadership.                                                                                                           efficient air traffic management
                         relate to our economic, social and environmental       We operate in South Africa and across the                                                                         services in South Africa and across the
                         impacts. A copy of the GRI is available on our         African continent.                                                                                             African continent.
                         website at: https://atns.com/reports/2020/ATNS_
                                                                                We were established in 1993 in terms of the
                         GRI_Report.pdf.                                                                                                                                               Sustainable economic development
                                                                                ATNS Company Act (No. 45 of 1993) for the
                                                                                acquisition, establishment, development,
                                                                                                                                                                                    is at the core of our strategy:
                         Our reporting suite is in compliance
                                                                                provision, maintenance, management, control
                         with:                                                  and operation of air navigation infrastructures,
                                                                                                                                                                             As a signatory to multiple global conventions, including the
                                                                                                                                                                         Chicago Convention, which established the International Civil
                                                                                air traffic services and air navigation services.
                             The Companies Act (No. 71 of 2008) as                                                                                                    Aviation Organisation (ICAO) as a specialised agency of the United
                             amended (Companies Act)                            Given our analysis of the broader macro-                                           Nations, ATNS’s sustainable development framework supports our
                                                                                environment, we implemented a progressive                                      relationship within the social systems, ecosystems and economic systems
                             King IV Report on Corporate Governance for
                                                                                2025 strategy which will ensure that we are                                 we operate in and our tailored programmes enable us to achieve our broader
                             South Africa 2016 (King IV)
                                                                                far better-placed to achieve our vision of being                         economic, social and environmental agenda.
                             International Financial Reporting Standards        a leading provider of air traffic management
                             (IFRS)                                             solutions.                                                         As a state-owned company and national provider of air traffic management services,
                                                                                                                                                ATNS is proud to play a significant role in contributing to South Africa’s sustainability
                                                                                                                                             and economic development agendas; thereby supporting the United Nations Sustainable
                            Feedback                                                                                                     Development Goals from a global perspective, the South African National Development Plan
                            Help us to understand what matters to you, by sending your comments and feedback on our IR                2030 from a national perspective, and the ICAO and other industry goals.
                            to marketing@atns.co.za.

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20INTEGRATED REPORT AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED
Our reporting approach

                         Our reporting approach
                         Integrated thinking                                       our activities. We have used top risks and
                                                                                                                                         Integrated risk management                            Outlook
                                                                                   opportunities arising from our operating context
                                                                                   and stakeholder relationships as key in determining
                                                                                                                                         approach
                         We understand that sustainable value creation                                                                                                                         Outlook information is considered to be
                         does not happen in isolation. In fact, it is only         which material matters to report on. The IR seeks
                                                                                                                                         ATNS believes that an effective risk governance       information that outlines the challenges,
                         through the careful consideration of the                  to provide a balanced and transparent account of
                                                                                                                                         model contains checks and balances to support the     opportunities and uncertainties we are likely
                         relationship between the capitals that we use or          how we create value through our use of and impact
                                                                                                                                         appropriate consideration of risk and opportunity     to encounter in pursuing our strategy, and the
                         affect, and the potential trade-offs inherent in our      on the various capitals and material events up to                                                           potential implications for our business model
                                                                                                                                         management throughout the organisation. We
                         strategic choices, that we can deliver on creating        the date of approval. Unless otherwise indicated,                                                           and future performance. Outlook information
                                                                                                                                         have adopted an integrated risk management
                         sustained value for all stakeholders over the             the information presented is comparable to that       approach to enhance our operational practices,        can be found throughout this IR ; however, the
                         short, medium and long term.                              of prior years, with no significant restatements.     decision-making and priority-setting, to better       majority of this information can be found in the
                                                                                                                                         respond to stakeholder needs.                         section of the IR relating to ‘Our Performance’
                         Boundary and scope                                        Materiality                                                                                                 in chapter 05.
                                                                                                                                         Internal controls framework
                         This IR reviews our financial, operational,
                         environmental, social and governance performance
                                                                                   This report aims to disclose information about                                                              Statement of precautionary
                                                                                                                                         Our board, with the support of our Audit and
                         for the financial year from 1 April 2019 to 31 March
                                                                                   matters that substantively affect our ability to
                                                                                                                                         Risk Committee, is ultimately responsible for
                                                                                                                                                                                               principle
                                                                                   create value over the short, medium and long
                         2020. This IR covers the activities of ATNS as a
                                                                                   term. For us, short term refers to the next year,     ATNS’s system of internal control; designed to
                         legal entity including our agreements and                                                                                                                             This IR shows our performance from 1 April 2019
                                                                                   while 12 months to 3 years is considered medium       identify, evaluate, manage and provide reasonable
                         arrangements outside of South Africa. In assessing                                                                                                                    until 31 March 2020.
                                                                                                                                         assurance to our shareholder and stakeholders.
                         the issues that materially impact value creation,         term. Anything beyond that is deemed long term.
                                                                                                                                         We apply a combined assurance model, which
                         we have looked beyond the financial reporting                                                                                                                         The global coronavirus pandemic first impacted
                                                                                                                                         seeks to optimise the assurance obtained from
                         boundary to provide for the material interests of         We discuss our materiality determination process                                                            South Africa and our business in March 2020, the
                                                                                                                                         management as well as internal and external
                         relevant stakeholders and to address the significant      on page 31 of this IR , including the grouping of                                                           final month of the reporting period and, as a result,
                                                                                                                                         assurance providers while fostering a strong
                         risks, opportunities and impacts associated with          our 11 material matters into 4 materiality themes.                                                          we did not reach all of our projections during this
                                                                                                                                         ethical context and mechanisms to ensure
                                                                                                                                         compliance.                                           time. Ongoing developments continue to have an
                                                                                                                                                                                               unprecedented impact on the world, South Africa,
                         Reporting boundary for the Integrated Report
                                                                                                                                         The process is monitored and evaluated under          and, notably, on our mandate and business.
                                                                                                                                         the direction of internal audit, while external
                                                                                                                                         audit teams cover key controls and accounting         This IR may contain forward-looking statements
                                                                                                                                         matters in the course of their audits. Other levels   with respect to ATNS’s future performance and
                                                                  Financial reporting entity                                                                                                   prospects. While these statements represent our
                                                                                                                                         of external assurance are obtained as and when
                                                                                                                                         required.                                             judgments and future expectations at the time of
                                                                                                                                                                                               preparing this IR , a number of emerging risks,
                                                                                                                                         Various aspects such as key performance areas         uncertainties and other important factors could
                                                             Air Traffic and Navigation Services                                         of our IR are independently assured by external       cause actual results to differ materially from our
                                                                         SOC Limited
                                                                                                                                         assurance providers, in this case, Nexia SAB&T        expectations. These include factors that could
                                                                                                                                         Auditors. For more details, please refer to the       adversely affect our business and financial
                                                                                                                                         independent auditors’ report on page 16 to 20 of      performance, including how the COVID-19
                                                                                                                                         our AFS .                                             pandemic may unfold globally and in South Africa.

                                     Regulated business                                            Non-regulated business

                                     Shareholders • Providers of capital • Employees and organised labour • Organs of state
                                        and regulators • Non-governmental organisations • Communities • Customers
                                                    • Suppliers • Media • Organised business and industry

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20INTEGRATED REPORT AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED
Our reporting approach

                                                                                 Overview of ATNS
                         Board responsibility                                    During the year, we reviewed and revised our vision, mission and strategic focus areas, to better support
                         statement                                               our mandate as a state-owned company and our common objectives to be operationally and financially
                                                                                 resilient and to continue to play a significant role in contributing to South Africa’s sustainability and
                                                                                 economic development agendas.
                         ATNS’s board of directors acknowledges our
                         responsibility to ensure the integrity of our 2020
                          IR . The board, supported by the executive
                                                                                 Our vision
                         committee, believe this IR addresses all matters        To be a leading provider of air traffic management solutions on the African continent.
                         that have, or could have, a material effect on our
                                                                                 We are proud of our African heritage and the strong reputation we created during our 26-year history;
                         ability to create value. We have applied our
                                                                                 offering leading air traffic management services, fostering trusted stakeholder relationships and
                         collective mind to the preparation and presentation
                                                                                 supporting the African developmental agenda.
                         of information in this IR , and believe it adequately
                         reflects the use of and effects on the capitals, and
                                                                                 In all that we do, we seek to deliver sustainable, long-term value to our stakeholders.
                         the manner in which the availability of these
                         capitals is impacting ATNS’s strategy and business
                                                                                 Our mission
                         model.
                                                                                 To be a safe and efficient provider of air traffic management solutions.
                         We, as the board, believe that this IR has been         We seek to achieve our mission through our talented people, our technology advancements, sound
                         prepared in accordance with the  Framework.         governance and operational and financial sustainability.
                         This IR also contains standard disclosures in
                         accordance with the GRI Standards.                      Our values
                                                                                    We ensure that safety and customer service remain at the core of all that we do
                         This report was approved by the board on
                         18 September 2020 and signed on our behalf by              We encourage employee engagement and their development
                         the Chairperson of the board.
                                                                                    We value and promote continuous improvement and innovation
                                                                                    We drive fairness and consistency in our actions
                                                                                    We take accountability for our individual, team and organisational performance
                                                                                    We foster open and effective communication

                         Simphiwe Thobela
                         Chairperson                                                                                   Our strategic pillars
                         18 September 2020
                                                                                                 During the reporting period, we streamlined our strategic focus areas
                                                                                                       into 3 strategic pillars, which underpin our 2025 strategy
                                                                                                                      and our strategic objectives.

                                                                                           Service excellence                 Sustainability                     Innovation

                                                                                        to meet and exceed our           to create a resilient and          to create an adaptive
                                                                                         customers’ needs and            responsive organisation             organisation that is
                                                                                             expectations                  that is able to create            at the next frontier
                                                                                                                             long-term value                 of development and
                                                                                                                                                                 advancement

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20INTEGRATED REPORT AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED
Our reporting approach

                         Our year in review
                         This past financial year was one of transition for us at ATNS. We closed out our 2020 strategy and
                         formulated our 2025 strategy and corporate plan; ensuring that we continue to drive sustainable
                         value creation over the short, medium and long term. We sharpened our focus on our core strengths,                        Agile 2025 strategy
                         in investigating longer term business growth opportunities in South Africa and further afield.
                         Notwithstanding an extremely challenging macro-environment and the uncertainty brought about                              We updated our vision and mission to cement our reputation as a
                         by a novel strain of the coronavirus, we maintained our course and delivered solid results across our                     leading provider of air navigation services in Africa. At the same
                         key performance areas.                                                                                                    time, we formulated our 2025 corporate strategy and plan, which is
                                                                                                                                                   underpinned by 3 strategic pillars: service excellence, innovation and
                                                                                                                                                   sustainability.

                                 Safety and health                                  Sustainability
                                 We took significant strides forward                Sustainability remains at the core of
                                 in improving our safety performance                our business. We continued to positively
                                 across a range of metrics. We proactively          contribute to the sustainable development                 Sound governance
                                 and decisively responded at the outset             goals and further advanced our corporate
                                 of the COVID-19 global pandemic.                   social investment, enterprise and supplier                We conducted several corporate governance assessments during the year,
                                                                                    development and skills development                        including those relating to enhanced governance decision-making protocols,
                                                                                    initiatives. Our environmental projects are               improved board effectiveness and a robust ethics management framework. The
                                                                                    progressing well, as we look to increase our              key outcomes of these assessments are being actioned and are on schedule to
                                                                                    investments in this area in the foreseeable               be implemented in the next financial year.
                                                                                    future.

                                Innovation
                                Our R&D and technology teams are putting                Top-class training                         Awards                                                      Employer of choice
                                plans in place to ensure that we continuously
                                                                                                                                   We were winners in the following categories at
                                develop the right technologies and skill                We continue to be recognised for our                                                                   We garnered further accolades in the
                                                                                                                                   the 2019 Civil Aviation Awards: transformation,
                                sets to remain at the forefront of business             best-practice aviation navigation and                                                                  year and remain one of South Africa’s top
                                                                                                                                   people development and training and development.
                                modernisation and digital transformation                aviation safety programmes in Africa                                                                   employers. Our ongoing commitment to
                                                                                                                                   In addition, we were runner-up in the customer
                                developments. We continue to reward and                 and the Middle East.                                                                                   our people makes this possible.
                                                                                                                                   service category.
                                recognise good ideas through our annual
                                Innovator competition.

                                                                                        Service excellence                                    Operational and financial resilience
                                                                                        We have been working hard to exceed                   Despite a challenging global macro-environment and the curtailment of air travel as
                                                                                        our customer needs and expectations,                  a result of a novel coronavirus outbreak, our operational and financial performance
                                                                                        through more regular engagements and                  remained stable across our key performance areas. To achieve our growth potential,
                                                                                        a broader service offering.                           we continue to expand our non-regulated business; providing a broader product and
                                                                                                                                              service offering.

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20INTEGRATED REPORT AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED
Our reporting approach

                                                          Repositioning for long-
                                                          term value creation
                                                          Dear stakeholder                                        thinking beyond the here and now and even further      Our customers have relied on the critical support
                                                                                                                  ahead than the formal boundaries of our 2025           we provide, especially in instances where cross-
                                                          Our 2020 financial year marked the end of a             strategy. To be effective as a leading provider of     border travel has been curtailed. The services
                                                          transformational period for ATNS and ushered            air traffic management solutions on the African        and solutions we provide have helped businesses
                                                          in a repositioned organisation with a clear             continent, we need to be responsive to global          to continue to operate, albeit during a period of
                                                          vision of being a leading provider of air traffic       trends. Our customer requirements are evolving;        extended physical isolation and limited travel;
                                                          management solutions in Africa. This clarity of         health and safety concerns have been elevated          facilitating the transportation of much-needed
                                                          focus together with a sharpened mission to do           and environmental pressures are increasing.            food and medical supplies to city centres and
                                                          so safely and efficiently will enable us to further     Additionally, to stay competitive and meet the         more remote locations; enabling repatriation and
                                                          cement our regulated business, in spite of global       demands of our stakeholders, we are looking to         business travel and ensuring that governments,
                                                          macroeconomic uncertainties, while creating new         adopt digital solutions and becoming more agile        both on the African continent and beyond, can
                                                          partnership and growth opportunities within our                                                                lead their state of emergency response effectively.
                                                                                                                  in the way we operate.
                                                          non-regulated business.
                                                                                                                                                                         Exacerbated by the COVID-19 pandemic, for the
                                                                                                                  In developing our 2025 strategy, we considered
                                                          In recent years, we significantly enhanced our                                                                 reporting year, aircraft movements recorded a
                                                                                                                  both opportunities and risks, informed by
                                                          customer experience, notwithstanding ongoing                                                                   year-on-year decline of 7.59%. This percentage is
                                                                                                                  developments in the world in which we operate.
                                                          capacity constraints. We continued to invest in                                                                expected to decline further in the coming years,
                                                                                                                  Our strategy keeps us focused, setting a clear
                                                          our colleagues, in enhanced technologies, in                                                                   due to the anticipated longer term impacts of
                                                                                                                  path to deliver sustainable growth and ongoing         the pandemic and the resultant global economic
                                                          improved facilities, in tried and tested governance
                                                                                                                  value for all our stakeholders over the near,          downturn and sluggish recovery.
                                                          processes and in remaining agile and resilient
                                                                                                                  medium and long term. Alongside our strategic
                                                          whatever the macro-environment.
                                                                                                                  focus areas, we have defined a number of targets       In assessing the immediate as well as the longer
                                                                                                                  to measure our executive team and organisational       term impacts of the COVID-19 pandemic, the
                                                          Updating our strategy to                                performance. As a board, we continually monitor        board requested the executive committee to run
                                                          ensure resilience and agility                           performance against these targets and when             a range of scenarios to assess the resilience of
                                                                                                                  necessary, revise them to take into account            our business model and revenue-generating
                                                          During the 2020 fiscal year, as part of our strategy    changes in the global and industry playing field,      streams. In tandem, we asked that the executive
                         CHAIRPERSON’S                    review exercise, the board engaged the executive        mega-trends and, of course, our strategic outlook.
                                                                                                                  Importantly, our short-term targets are aligned
                                                                                                                                                                         team propose regulatory interventions as well as
                                                                                                                                                                         adjacent business development areas, to ensure
                                                          committee in a series of workshops. These
                         STATEMENT                        sessions, supported by detailed preparatory work,       to our long-term strategic objectives and are
                                                                                                                  implemented organisation-wide. They encompass
                                                                                                                                                                         sustainable and long-term value creation and to
                                                                                                                                                                         overcome the current and longer term effects of
                                                          enabled the board to deepen our understanding
                                                          of the factors shaping our external environment         both financial and non-financial indicators as well    the pandemic. Our executive team has also been
                         Simphiwe Thobela                                                                         as quantitative and qualitative factors.               working with our Honourable Minister and his
                                                          and to productively engage with the executive
                         Chairperson                                                                                                                                     advisors in evaluating sector-related proposals
                                                          team on our 2025 strategy. In our discussions, the
                                                                                                                                                                         which will serve to limit financial hardship while
                                                          board emphasised the importance of striking the         Scenario-planning in the                               not compromising on the health and safety of
                                                          right balance between seeking out new revenue-
                         As we reflect on the global      generating opportunities within the non-regulated       wake of a global pandemic                              people.
                         uncertainties brought about      parts of the business and through industry
                                                                                                                  Despite a shareholder-approved 2025 strategy, our      We have updated our strategy and corporate
                         by the coronavirus pandemic,     innovations while at the same time ensuring that
                                                                                                                  business-as-usual activities and execution plans       plan, taking into account the short- to longer-
                         we are working with our          our core regulated business is safely and efficiently
                                                          run. The board also reiterated the importance of        were interrupted by the outbreak and spread of the     term impacts of the coronavirus pandemic. This
                         shareholder, our customers,      adopting a strategy that is both agile and resilient    novel coronavirus (COVID-19). This global pandemic     updated plan was tabled before Parliament at the
                         suppliers, business partners     and one which will ensure a robust organisation         has impacted all of our lives in ways we could not     end of August 2020 and, although, closely aligned
                         and governments, to ensure       despite mounting macro-economic uncertainty,            have imagined. I am immensely proud of our ATNS        to our original 2025 strategy, incorporates adjusted
                         that, as an industry sector,     global socio-political instability and any unforeseen   executive team and our broader employee base           key performance indicators, given changes to the
                                                          risks and opportunities.                                who rose to the occasion during these extremely        external environment and our assessment of the
                         we are better able to weather                                                            difficult times. The determination, delivery and       shifting sector landscape in the next 18 months.
                         the current storms not only in   To deliver on our vision and provide our customers      devotion from the whole ATNS team is enabling our
                         South Africa but also on the     with premier air traffic management solutions,          services to continue to function during this intense
                         African continent.               we needed to reshape our strategic focus areas;         period of uncertainty and humanitarian need.

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20INTEGRATED REPORT AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED
Our reporting approach

                                                                                people-centred customer and partner focus and          Executive: Strategy and Optimisation. Dumisani           Our commitment to well-considered decisions
                         Driving a resilient financial                          to enhance employee engagement.                        has served as an Executive in the Office of the          for the long-term future of our business is
                         performance                                                                                                   Chief Executive Officer over several years, prior        unwavering. While recent events have created
                                                                                Our strategic ambitions are informed by our drive      to which he was the Executive: Human Capital,            significant short-term challenges, through our
                         Despite the tough macroeconomics and negative          to be a purpose-led company: providing safe and        and has deep insights into the air travel sector         scenario-planning exercise, we are confident our
                         global growth, for the financial year under review,    efficient air traffic management solutions while       and the organisation as a whole. I have no doubt         business model remains robust and we have a
                         we recorded an increase of total revenue by 0.36%      playing a meaningful role in promoting sustainable     that the board will be well-supported by the Chief       clear runway to resume value creation. These
                         to R1 673 million (2019: R1 668 million). This         sector transformation on the African continent.        Executive Officer Delegated and his executive team       will be driven alongside focused efforts to actively
                         notwithstanding the following uncontrollable                                                                  during this all-important period of repositioning.       manage the balance sheet.
                                                                                                                                       On behalf of the board, I would like to extend my
                         factors:
                                                                                Promoting good governance                              personal thanks to both Thomas and Dumisani for          We thank the Honourable Minister FA Mbalula
                             our core revenue arising from aerodrome, en-                                                              stepping in to assist at a crucial junction and to       and his team for their counsel and our partners
                                                                                In 2019, as part of the board’s ongoing commitment
                             route and approach fees decreasing by 1% to                                                               the executive management team for their ongoing          and colleagues for their ongoing dedication and
                                                                                to continuous improvement, we appointed external
                             R1 463 million (2019: R1 479 million);                                                                    commitment and for ensuring the seamless, albeit         reiterate our firm intent to secure the future of
                                                                                specialists to evaluate our effectiveness as a         temporary, executive transition.                         our organisation; seeking out new opportunities
                             revenue-generating air traffic movements           governing body and to identify areas of focus.
                                                                                                                                                                                                wherever prudent. As we reflect on the global
                             decreasing by 4.4% to 306 000 (2019: 320 000);     The external assessment found that we have well-       Outside of the support we receive from the               uncertainties brought about by the novel
                             adversely impacting our regulated revenue          functioning governance structures with a good          executive team, the ATNS board was aided in our          coronavirus pandemic, we continue to work with
                             streams;                                           balance of skills and experience, although the board   oversight function by the board committees and           the Department of Transport, our customers,
                                                                                would benefit from specialist functional expertise     our board members who each bring the depth in
                             a limited tariff increase of just 0.5% compared                                                                                                                    suppliers, business partners and governments to
                                                                                in the areas of public affairs, human resources        expertise and diversity in experience needed to
                             to 7.5% in 2018/19; and                                                                                                                                            ensure that, as an industry sector, we are better
                                                                                and public sector supply chain management.             promote ethical and decisive leadership and to           able to weather the current storms not only in
                             travel restrictions, as a result of the COVID-19   In addition, the independent review found that         provide effective oversight of the organisation’s
                                                                                                                                                                                                South Africa but also on the African continent.
                             pandemic, toward the end of the financial year.    detailed governance processes clarifying roles and     performance and strategic direction. I extend
                                                                                responsibilities and decision-making protocols         my gratitude to my fellow board members for
                                                                                                                                                                                                The board and are I encouraged by the fact that
                         Our balance sheet maintained its strength with         would serve as an important supplementation            their wisdom, insight and energy in guiding ATNS
                                                                                                                                                                                                ATNS has the right people, strategy, business
                         a liquidity ratio of 5.6:1 (2019: 4.6:1) and gearing   to our existing framework. To implement our            to yet another stable financial and operational
                                                                                                                                                                                                focus and culture to deliver on our ambitions
                         at 3.4% (2019: 0.3%). This puts ATNS in a better       augmented governance framework with related            performance.
                                                                                                                                                                                                of becoming a leading provider of air traffic
                         position to raise funding for both imminent capital    decision-making procedures and processes and
                                                                                                                                                                                                management solutions that plays a meaningful
                         expenditure and to continue to buffer the financial    to aid the board in identifying suitable functional
                                                                                                                                       The year ahead                                           developmental role in the markets in which we
                         hardship our sector is experiencing in the wake        specialists to enhance our oversight role, we
                                                                                                                                                                                                operate. We look to the future with both hope
                         of the global pandemic.                                appointed Ms Lindelwa Mngomezulu as Company            Coupled with our shareholder-approved 5-year             and optimism.
                                                                                Secretary, effective 1 January 2020. I extend my       strategy and given the extremely uncertain
                                                                                personal support to Lindelwa in undertaking this
                         Enhancing our technology                               important task for both the board and the executive
                                                                                                                                       environment we find ourselves in, our organisational     Wherever you may find yourself, please stay safe
                                                                                                                                       top priorities for the remainder of the 2020 calendar
                         and skills base                                        team, the details of which are summarised in the       year entail a rigorous focus on key factors within our
                                                                                                                                                                                                and well.

                                                                                ‘Our Governance’ chapter of this IR .                  control – ensuring safe and efficient operations,
                         Even before the outbreak of the COVID-19                                                                      developing talent, utilising technologies to our
                         pandemic, our ambition was to transform                Our Interim Chief Executive Officer, Mr Thomas         advantage, maintaining tight cost discipline and
                         our business from a conventional air traffic           Kgokolo, concluded his term at the end of the          driving our broader sustainability agenda.
                         management business into a future-proofed,             financial year and, effective 1 April 2020, resumed
                         digital company that plays a leading role in the       his role as a non-executive director of our            Looking towards the 2021 financial year, we
                         aviation sector on the African continent. We are       board. Pending the appointment of a permanent          will be providing an update on the progress
                         identifying opportunities to develop and, where not    Chief Executive Officer, as approved by our            made in implementing our 2025 strategy and in
                         possible, acquire the necessary digital skills to      shareholder, and to ensure continuity and effective    strengthening our governance decision-making
                         future-proof the organisation. We continue to invest   executive management, the board delegated the          systems and processes. In the coming year, we also       Simphiwe Thobela
                         significantly in the infrastructure, technologies      accountabilities and the authority of the Chief        look to conclude on the permanent appointment            Chairperson
                         and organisational culture needed to deepen our        Executive Officer to Mr Dumisani Sangweni, the         of the Chief Executive Officer.                          18 September 2020

          14                                                                                                                                                                                                                                           15
20INTEGRATED REPORT AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED
Our business

               02
                    Our organisation
                    at a glance
                    At Air Traffic and Navigation Services SOC Limited     In delivering on our mandate, we need to remain                 Transport. The Economic Regulating Committee
                    (ATNS), we are responsible for air traffic control     financially sustainable in the long term while,                 is empowered by the ATNS Company Act to issue
                    and pride ourselves on ensuring sky safety across      through our operations, making a significant                    a permission to ATNS. The permission regulates
                    6% of the world’s airspace. We foster thought-         contribution to the aviation industry and to the                the increase in specified tariffs that we can issue
                    leaders who are dedicated to service excellence,       country’s developmental goals. Our stakeholder                  and determines minimum service standards for
                    technological innovation and sustainability.           relationships, both on the African continent and                our regulated business. Through the permission,
                                                                           globally, help us position ATNS as a significant                ATNS is authorised to levy air traffic service
                    Beyond air traffic control                             player in the global civil aviation industry arena.             charges on aircraft operators for the use of air
                                                                                                                                           navigation infrastructure and the provision of an
                    Our services extend beyond pure air traffic control    ATNS is regulated by the Economic Regulating                    air traffic service. Each permission has a five-
                    into the provision of vitally important aeronautical   Committee, which is a statutory body formed and                 year cycle, with our current permission in place
                    information used for all flight planning purposes.     appointed by our shareholder, the Department of                 until 2021.
                    We are also involved in search and rescue
                    coordination activities and the maintenance of a
                                                                           Corporate structure
                    reliable navigation infrastructure.

                    Underpinning all that we do is a consideration

                                                                                                                                                                                        Executive Authority
                    of three key areas: people, partnerships and

                                                                                                                                                                                          and Regulatory
                                                                                                                                  Shareholder                Economic Regulator

                                                                                                                                                                                            Oversight
                    the planet. Our strap line: ‘unlocking winning                           Safety Regulator
                    partnerships’ reinforces the importance we place                                                              Minister of               Economic Regulating
                                                                                                     SACAA
                    on collaboration with the aviation industry and                                                               Transport                     Committee
                    specific role players, to ensure that the level of
                    excellence of our air traffic management solutions
                    remains best-in-class.                                                                                        ATNS Board

                                                                                                                                                                                               Accounting Authority
                    In providing safe and efficient air traffic

                                                                                                                                                                                                 and Governance
                    management solutions, we need to attract, develop
                    and retain highly skilled air traffic controllers                                                           Chief Executive
                    supported by a world-class communications,                                    Internal Audit                                             Company Secretary
                                                                                                                                    Officer
                    navigation and surveillance infrastructure as well
                    as establishing sound partnerships with a wide
                    range of stakeholders across the continent and
                    globally.
                                                                                                               Executive: Strategy              Chief Financial          Chief Operations
                                                                                   Legal Counsel
                    Our status as a                                                                             and Optimisation                    Officer                   Officer

                    state-owned company
                                                                                 Executive: ATM/CNS              Executive:                       Executive:
                    We rely on current revenues and debt funding                                                                                                       Chief Risk Executive
                                                                               Planning and Standards         Commercial Services               Human Capital
                    for our operational and capital expenditure
                    requirements. As a state-owned company, we
                    are governed by South Africa’s legislative and
                    administrative framework, with section 11 of the
                    ATNS Company Act (No. 45 of 1993) specifying
                    our key deliverables, which include safe, efficient,
                    economic and profitable operations. Our board of                  Principal                    Chief Technology         Chief Information            Chief Air Traffic
                    directors is appointed by the Minister of Transport,                ATA                             Officer                  Officer                    Services
                    who, on behalf of the South African government,
                    is the sole shareholder of ATNS.

     16                                                                                                                                                                                                               17
Our business

               Our business areas                                                                                                                      Alongside our regulated and non-regulated areas, we also provide ancillary services to support seamless
                                                                                                                                                       gate-to-gate operations. This concept encompasses the taxi-out and departure, climb out, cruise,
               We are structured along two primary business lines: regulated (being our core business in South Africa)                                 descent, arrival, landing and taxi-in phases of a flight. Our air traffic management services are enabled
               and non-regulated (being our international growth partnerships and related activities). Both of these                                   by an advanced air traffic management system, which is deployed at the Johannesburg and Cape Town
               divisions are supported by our enabling functions at the corporate centre: finance, human capital, risk,                                air traffic control centres and associated terminal control units. These units use enabling technologies
               compliance and information technology.                                                                                                  including communication, navigation and surveillance systems.

               During the reporting period, our regulated business contributed approximatively 88% to the total turnover                               In extending our support services, we maintain that we are uniquely placed to help airline and airport
               of the company, while the remainder was derived from non-regulated business activities. The slight decline
                                                                                                                                                       customers to realise value by delivering more airspace services. We understand the complex interactions
               reported from the previous financial year is attributed to a decrease in tariff-generating movements.
                                                                                                                                                       at each stage of a flight between airlines, airport operators and aviation navigation service providers and
               Our regulated business comprise three core revenue-generating streams:                                                                  actively promote the benefit we can provide from fuel-efficient flight profiles, approaches and departures;
                                                                                                                                                       minimising delays, through rigorous arrival and departure management.
                   communication, navigation and surveillance infrastructure
                   auxiliary aviation services, which includes aeronautical information publications, flight procedure                                 Our Aviation Training Academy
                   design and aeronautical surveys
                   air traffic management                                                                                                              Our Aviation Training Academy is the premier provider of air traffic management training on the African
                                                                                                                                                       continent. Courses offered include air traffic services and air traffic services’ electronic personnel training.
               In expanding our non-regulated business, we are seeking to develop innovative packages for the future
                                                                                                                                                       In addition, our academy offers a wide range of aviation-related and safety-related courses. Our students,
               needs of the private sector and the air travel and aviation industry in Africa. Through our non-regulated
                                                                                                                                                       many of whom are employed by our client companies, come from throughout Africa and the Middle East.
               business, we currently provide clients with ancillary services such as air traffic control, technical support,
               engineering training, procedure design, communication, navigation and surveillance equipment, installation
               and commissioning, consulting and sophisticated satellite communication technologies. We are evaluating                                 At ATNS, we speak of ‘safety first, safety always’, and through our academy we are also able to provide
               additional products and services that will further cement our position as a leading transnational supplier                              insights into best-practice safety procedures; equipping our students with the skills and knowledge to
               of air traffic management solutions and associated services.                                                                            successfully take on the challenges of air traffic management and other related aviation services.

               ATNS service overview

                                   Phases of Flight                           Taxiing                        Climbing                             Cruising                      Descending Holding                   Landing Taxiing
                                                                             Take-off                       Overflying                      Climbing Descending                 Letdown Overflying
                                 Controlled Airspace                       Control Zone                    Control Areas                   Airways Control Areas                  Control Areas                       Control Zone

                                                                                                                                            En-Route Sectors
                                                                                                                                              Area Control
                                                                                                                                            Reporting Points
                                                                           Terminal/                                                                                                                                    Terminal/
                                                                           Approach                                                                                                                                     Approach
                                                                            Control                                                                                                                                      Control

                                                                           Aerodrome                                                                                                                                    Aerodrome
                                                                            Control                                                                                                                                      Control

                                                                               AFIS                                                                                                                                         AFIS

                                 Communication                                                                                  VHF (Air – Ground) - VSAT (Ground – Ground)
                                                                              ILS                              ILS                              VOR/DME                               ILS                                 ILS
                                   Navigation                               VOR/DME                          VOR/DME                                                                VOR/DME                             VOR/DME
                                                                          Primary and                       Primary and                    En-Route Radar Cover                    Primary and                        Primary and
                                  Surveillance                          Secondary Radar                      Secondary                       Secondary Radar                     Secondary Radar                    Secondary Radar
                                                                                                               Radar
     18                                                                      ASMGCS                                                                                                   ASMGCS                             ASMGCS                                           19
Our business

               Our geographic reach and services                                                                                                     Our products and services

               We provide air traffic, navigation, training and associated services within South Africa and a large part                                                                                                                     Tunisia

               of the Southern Indian and Atlantic Oceans. Additionally, we are expanding our non-regulated business                                                            Morocco                                                                                                                           Saudi        UAE
                                                                                                                                                                                                                                                                                                                  Arabia
               across Africa.
                                                                                                                                                                                                                   Algeria                                     Libya
                                                                                                                                                                                                                                                                                    Egypt                                     Yemen

               Our South African presence
                                                                                                                                                                    Western
                                                                                                                                                                    Sahara

                                                                                                                                                     Cape Verde
                                                                                                                                                                                   Mauritania
               We provide services to nine South African statutory airports operated by the Airports Company of South                                                                                      Mali                     Niger
                                                                                                                                                                                                                                                             Chad
               Africa (ACSA) and to eleven regional airports. Our air traffic services cover over 22 million square kilometres                               Senegal                                                                                                               Sudan
                                                                                                                                                                                                                                                                                                                    Eritrea

               of airspace, which equates to 6% of the global airspace.                                                                                   The Gambia
                                                                                                                                                                                                      Burkina Faso
                                                                                                                                                                                                                                                                                                                                 Dijibouti       Mumbai

                                                                                                                                                                  Guinea            Guinea
                                                                                                                                                                  Bissau                                                         Nigeria

                                                                                                                                                                                                                   Bernin
                                                                                                                                                                                                Cote                                                                                                             Ethopia

                                                                                                                                                                                                                   Togo
                                                                                                                                                                                                                                                                                     South
                                                                                                                                                                       Sierra                   D’ivoire
                                                                                                                                                                                                                                                                 Central             Sudan
                                                                                                                                                                       Leone                               Ghana
                                                                                                                                                                                                                                                                 African Rep.
                                                                                                                                                                                Liberia                                                  Cameroon

                Our South African presence

                                                                                                                                                                                                                                                                                                                               ia
                                                                                                                                                                                                                                                                                                                            al
                                                                                                                                                                                                                                                                                                                           m
                                                                                                                                                                                                                            Equatorial                                                       Uganda

                                                                                                                                                                                                                                                                                                                        So
                                                                                                                                                                                                                            Guinea                                                                       Kenya

                                                                                                                                                                                                                                                       go
                                                                                                                                                                                                                                            Gabon

                                                                                                                                                                                                                                                       Con
                                                                                                                                                                                                                                                                                Rwanda
                                                                                                                                                                                                                       Sao Tome                                     DRC
                    ATNS service reach in South Africa                                                                                                              Presence
                                                                                                                                                                                                                       & Principe                                                             Burundi
                                                                                                                                                                                                                                                                                                                                                Seychelles

                                                                                                                                                                                                                                                                                                 Tanzania
                                                                                                                                                                    No presence
                    Aerodrome and approach services
                    at    ACSA airports                                                                                                                                                                                                                                                     Malawi                             Comoros
                                                                                                                                                                                                                                                        Angola

                                                                                                                                                                                                                                                                          Zambia
                    Aerodrome services at
                         regional airports                                                                                                                                                                                                                                          Zimbabwe
                                                                                                                         Kruger                                                                                                                        Namibia                                          Mozambique
                                                                                                      Polokwane          Mpumalanga                                                                                                                                     Botswana
                                                                                                                                                                                                                                                                                                                                             Mauritius
                    Approach procedural services at                                                                      International

                        regional airports                                                    Pilanesberg                                                Non-regulated business                                                                                                                       Swaziland
                         (while also providing services at St Helena)                                             Wonderboom
                                                                                                                                                                                                                                                                       South
                                                                                                                                                                  Ancillary services (including; air traffic                                                           Africa   Lesotho

                                                                         Mafikeng
                                                                                                                                                                  control; technical; engineering training;
                                                                                                  Lanseria                                                        procedure design; communication;
                                                                                                                                                                  navigation and surveillance equipment;
                                                                                                           Rand
                                                                                                                     OR Tambo                                                                                                                                            Regulated business
                                                                                                                     International                                installation and commissioning;
                                                                                                                                                                  consulting and sophisticated satellite                                                                        Air traffic management
                                                                                                               Pietermaritzburg                                   communication)
                                                                                                                                                                                                                                                                                Communication, navigation and
                                                 Upington                                                                                                                                                                                                                       surveillance infrastructure
                                                                Kimberley                                                            King Shaka
                                                                        Bram Fischer                                                 International      Aviation Training Academy                                                                                               Auxiliary aviation services
                                                                        International                                                                                                                                                                                           (including, aeronautical information
                                                                                                                               Virginia                           We extend our training offering                                                                               publications; flight procedure design
                                                                                                      Umtata (Mthatha)                                            throughout Africa and the Middle East                                                                         and aeronautical surveys)

                                                                                        Bisho                                                          Our extended services across Africa and beyond
                                                                                                           East London
                                                                                                                                                       We consider the following factors and inputs, in informing our selection of markets:
                                                              George        Port Elizabeth
                                 Cape Town
                                 International                                                        Legend                                                  analysis of external market research and insight gained through customer engagements
                                                                                                        ACSA airports
                                                                                                                                                              countries where we already have an established client-base and positive working relationships
                                                                                                        Regional airports
                                                                                                                                                              our current capabilities and what may be required to partner and extend our reach in these to
                                                                                                                                                              new markets
                              Additional services:
                                                                                                                                                              current and potential revenue contributors
                              National aeronautical information management l Oceanic control services l
                              Operation of the aeronautical rescue coordination centre
                                                                                                                                                       Additionally, we consider strategic partnerships and market penetration opportunities in the context
                                                                                                                                                       of our long-term aspirations and organisational goals.

     20                                                                                                                                                                                                                                                                                                                                                      21
Our business

               Our external environment
               Global context                                         Recurring aviation industry sustainability
                                                                                                                              COVID-19                                                 Despite various scientific and forecasting models,
                                                                      themes included the demand for skilled aviation                                                                  the real long-term impact of these events on
                                                                      professionals and tackling one of the biggest global                                                             economic growth will only emerge over time.
               Environmental risks remain among the top global                                                                With the classification of a novel strain of the
                                                                      challenges of our time: climate change.
               risks identified by the World Economic Forum, both                                                             coronavirus to that of pandemic status in March
                                                                                                                                                                                       Turning to the aviation industry specifically, the
               in terms of likelihood and potential impact. These                                                             2020, we all witnessed first-hand the far-reaching
                                                                      On the policy front, African governments have been                                                               global pandemic resulted in more than 16 000 of
               include extreme weather, natural disasters, water                                                              impacts of the COVID-19 pandemic on individuals,
                                                                      driving efforts to tackle infrastructure bottlenecks                                                             the world’s commercial aircraft being grounded,
               crises and failure of climate change mitigation                                                                families, businesses, societies and countries, as
                                                                      and improve the regulatory environment to attract                                                                given air travel restrictions and several local and
               and adaptation. The interconnectedness of these                                                                infection rates escalated around the world
                                                                      foreign direct investment and cross-border                                                                       international airports suspending all services.
               risks with human wellbeing means that they pose                                                                including in South Africa.
                                                                      strategic partnerships, along with additional
               increasing systemic challenges to communities,         opportunities brought about by the recent                                                                        As the novel coronavirus continues to cause
               corporations and governments.                                                                                  In response to this, governments globally
                                                                      ratification of the African Continental Free Trade                                                               economic and social turmoil across the globe, the
                                                                                                                              implemented national state of disaster measures
                                                                      Area Agreement. Continued implementation of                                                                      aviation industry is suffering significant hardship.
               Also high on global agendas is the impact and                                                                  to limit the spread of the virus. At ATNS, we
                                                                      the agreement should boost intra-Africa trade in                                                                 Several US carriers have announced plans to cut
               reach of digitisation and innovation as enablers                                                               have and continue to work tirelessly to ensure
                                                                      the medium to long term, which should see an                                                                     their international routes by as much as 80%
               and differentiators.                                                                                           that all of our people, customers and broader
                                                                      increase in both human travel and the movement                                                                   to 90%, over the next several months. Foreign
                                                                                                                              stakeholder base are enabled to deal with this
                                                                      of cargo.                                                                                                        carriers have been impacted even more acutely.
               On the economic front, global growth rates                                                                     escalating challenge. Our primary focus is on the
                                                                                                                                                                                       Some have announced they may have to ground
               remained sluggish, which resulted in less                                                                      health and safety of our ATNS team alongside
                                                                      Against a muted South African economic outlook,                                                                  their entire fleet, while others have announced
               disposable income and the curtailment of                                                                       the continuous and uninterrupted provision of
                                                                      sub-Saharan Africa continues to be seen as an                                                                    flight schedule cuts of between 75% and 90%.
               discretionary spend, including that which would                                                                world-class air navigation services as part of
                                                                      attractive long-term investment region, fuelled by                                                               In tandem, airlines have grounded fleets of their
               normally be allocated to leisure travel.                                                                       international essential services.
                                                                      its economic growth potential. Strong population                                                                 larger aircraft, instituted recruitment freezes and,
                                                                      growth, a long-term rise in the middle-class                                                                     in several instances, have announced stringent
               The air travel sector has always been a significant                                                            Financial markets dropped sharply as investors
                                                                      population, urbanisation trends, increasing                                                                      cost reduction and corporate restructuring plans.
               contributor to national economies and to the                                                                   reduced their risk appetite; predicting that some
                                                                      technology usage and abundant natural resources                                                                  We live in uncertain and unprecedented times.
               global GDP. In 2019, although air movements, by                                                                form of global recession is likely, given the duration
                                                                      are all key drivers for investments in sub-Saharan
               and large, increased, mounting operating costs         Africa.                                                 and extent of the impacts of the virus. In addition,
               dramatically eroded profits. Unsurprisingly, in the                                                            global oil markets have also dropped sharply
               2019 calendar year, the airline industry recorded                                                              following disagreements between Russia and
               18 bankruptcies.
                                                                      South Africa                                            Saudi Arabia on levels of supply. In isolation, the
                                                                                                                              spread of a global pandemic or the dramatic drop
                                                                      In South Africa, the subdued level of economic          in oil prices would be difficult for many parts of
               Africa                                                 growth during the period under review, together         the world to successfully respond to; but together
                                                                      with institutional failures and an unemployment         these two events are exceptionally challenging for
               While air travel increased in more competitive         rate of 29%, continued to negatively impact both        not only South Africa but even the strongest
               markets like Europe and Asia, movements across         investor confidence and consumer optimism,              amongst global economies.
               the African continent remained comparatively low,      with only limited opportunities to attract local
               with perceptions of safety and security continuing     and foreign investment. Policy certainty, electricity
               to impact Africa as a destination of choice.           supply stability and the country’s fiscal position
                                                                      remain all-important to ensure inclusive growth,
               Additionally, high taxation rates, fuel increases      which, in turn, will support job creation and reduce
               (which is already more expensive than in other         levels of unemployment and poverty.
               regions) and the lack of an integrated intra-African
               network have negatively impacted the market            Looking at the local aviation sector and given the
               dynamics for the region. To address the profit         volatile macroeconomics and bleak near-term
               decline of certain routes, airline carriers on the     growth potential, two of South Africa’s airlines have
               continent have had to consider deploying smaller       filed for business rescue with a third in provisional
               versus larger aircraft.                                liquidation.

     22                                                                                                                                                                                                                                       23
Our business

               Our business model;
               fuelling value creation
               We strive to create superior value for our customers, shareholder
               and other stakeholders, through our services, technologies and
               people. By considering the impact of our external operating
               context and our relationships, we identify both the risks and
               opportunities that can affect the delivery of our strategy. Our
               ongoing engagement with stakeholders enhances our reputation
               and improves our understanding of their needs and interests to
               position us for a sustainable future.

     24                                                                            25
Our business

               Our business model
                                                                                                                                                                                    Our strategic pillars inform our KPIs and
                                                                                                                                                                                our business processes ensure effective delivery                                                      8     Our outputs
                                Our ongoing assessment process                                      5      Our capital      Our activities
                                                                                                             inputs                                                                             External environment
                                                                                                                                                                                                                                                                                              Financial
                                                                                                                                                                                                                                                                                            sustainability

                 2                                                                                      Human capital
                                                                                                                             Regulated
                                                                                                                             Business
                                                                                                                                                                               6
                                                                                                                                                                                                                                                                                          Safe and efficient
                  We consider the                                                                                                                                              Assess impact of our                                                                                           company
                                                                                                                             Air traffic                                        materiality themes
                     risks and                                                                                              management
                   opportunities                                                                          Social and

                                                                                                                                                                                                                                            Comprehensive risk management
                                                                                                         relationship     Communication,                                                                                                                                                   Leading training
                                                                                                            capital        navigation and                                                                                                                                                 academy in Africa

                                                                   Assess our corporate plan,

                                                                                                                                               Stakeholder collaboration
                                                                    permission and strategy
                                                                                                                            surveillance
                                                                                                                           infrastructure
                                         3    We are                                                    Natural capital
                                                                                                                                                                                                                                                                                       Adaptive, innovative
                                                                                                                          Auxiliary aviation                                        Service        Sustainability      Innovation                                                          enterprise
                                            continually                                                                         services                                           Excellence                                                                                KPIs
                                           informed by
                                            our various
                                                                                                4                             (including,                                                                                                                                     and
                                                                                                                                                                                                                                                                            targets
                                                                                                                             aeronautical
                                           stakeholder                                                                       information                                         STRATEGIC            STRATEGIC        STRATEGIC                                                       Future-fit workforce
                                          engagements                                               Financial capital                                                             PILLAR 1
                                                                                                                            publications,                                                              PILLAR 2         PILLAR 3
                                                                                                                          flight procedure
                                                                                                                              design and
                                                                                                                                                                                                                                                                                      Stakeholder-centricity
                 1                                                                                      Manufactured
                                                                                                                             aeronautical
                                                                                                                                surveys)
                                                                                                          capital
                  We evaluate our
                     external                                                                                              Non-Regulated                                                                                                                                                   Transformative
                   environment                                                                                                Business                                                                                                                                                      organisation
                                                                                                                          ancillary services
                                                                                                         Intellectual
                                                                                                            capital       Aviation Training
                                                                                                                              Academy                                                                                                                                                      Environmental
                                                                                                                                                                                                                                                                                            stewardship
                                                                                                                                                                                          7         Sound governance

                       Our external environment                                                                                                                                    Our capitals inputs
                  1                                                                                                                                                        5
                       Our external environment encompasses global, regional and South African dynamics. Within                                                                    When making decisions on how to manage and expand our business and stakeholder offering,
                       the context of these regional groupings, we specifically consider global growth trends, market                                                              we carefully consider the resources and relationships that are critical to our ability to create
                       volatilities, geopolitical tensions, socioeconomic push-and-pull factors, industry challenges,                                                              value. We refer to these as the six capitals. Inputs of each are needed for the effective production
                       environmental considerations and regulatory requirements. Refer to pages 22 to 23 for details                                                               and delivery of our services; generating value for all our stakeholders. For details on how
                       on our external environment.                                                                                                                                we use the six capitals to create value and the trade-offs between these capitals, refer to
                                                                                                                                                                                   pages 87 to 127.
                       Risks and opportunities
                  2
                       The decisions we take regarding our corporate plan and strategy are impacted by both the                                                                    Materiality themes
                                                                                                                                                                           6
                       risks and opportunities that could materially impact the delivery of value to our stakeholders.                                                             Our materiality themes relate to those material matters with the potential to affect our value
                       Refer to pages 54 to 57 for details on our risk management process and top risks.                                                                           creation ability and the achievement of our strategy. We provide a more detailed discussion
                                                                                                                                                                                   on our materiality themes and the material matters which underpin them on pages 31 to 39.
                       Stakeholder engagement                                                                                                                                      These could substantially affect our ability to create value in the short, medium or long term.
                  3
                       We strive to be a trusted partner of choice. Delivering value to our stakeholders is one of
                       our core drivers. Our financial resilience and sustainability depends on the support of our                                                                 Sound governance
                                                                                                                                                                           7
                       stakeholders and it is essential for us to understand and be responsive to their needs and                                                                  As a state-owned company, we are committed to high standards of business integrity and
                       interests. For details of our stakeholder relationships, refer to pages 40 to 43.                                                                           ethics. Being accountable and responsible to all stakeholders is a priority. For details on our
                                                                                                                                                                                   governance overview, refer to pages 58 to 83.
                       Our corporate plan, permission and strategy
                  4
                       Our corporate plan, permission and strategy are prepared for 5-year cycles and set a clear                                                                  Our outputs
                                                                                                                                                                           8
                       path for us to deliver sustainable value in the short, medium and long term. Our revenue-                                                                   Our overarching objective is to create value for our customers, our workforce, our shareholder
                       generation is dominated by our regulated business, accounting for approximately 88% of our                                                                  and other stakeholders. We use financial and non-financial KPIs to measure the achievement
                       earnings. As we see a decline in our regulated business revenue-generated movements, we                                                                     of our strategic targets and outputs linked to our capitals and the SDGs over the short, medium
                       seek to expand our non-regulated business into new markets in Africa and the Middle East.                                                                   and long term. For details on the year’s performance measured against our 2020 strategy,
                       Sustainability considerations underpin our day-to-day decision-making and are embedded                                                                      refer to pages 46 to 47.
                       in our strategy and strategic pillars. Refer to pages 52 to 53 for details on our 2025 strategy.

     26                                                                                                                                                                                                                                                                                                        27
Our business

               Our business model; its outcomes and trade-offs                                                                                                             ACTIVITIES ENHANCING OUTCOMES                                       TRADE-OFFS

                                                                                                                                                                       Introduced a new vision and mission to ensure that staff     Employee morale impacted by the
               Our assets, skills and relationships place us in a strong position to deliver value-based growth. When                                                  are engaged and to encourage a renewed commitment            outbreak of the COVID-19 pandemic
               making decisions on how to manage our business, we take into account our resources and relationships                                                    to clear, common objectives                                  reduced human capital
               that are critical to our ability to create value sustainably.                                                                                           Enhanced safety performance both within ATNS and             Virtual and remote working negatively
                                                                                                                                                                       to the benefit of our broader stakeholder base               impacted workforce productivity and
                                                                                                                                                                       Conducted an employee engagement survey to identify          financial capital
               We refer to these as the six capitals and outline below our activities which enhance their outcomes. In
                                                                                                                                                                       areas to improve the organisational culture                  Social isolation measures, introduced
               so doing, we contribute towards advancing several of the UN Sustainable Development Goals (SDGs). We
                                                                                                                                                                       Supported staff with flexible and remote working             country-wide, reduced social and
               remain mindful of the trade-offs when reviewing each set of outcomes.                                                                                                                                                relationship capital
                                                                                                                                                                       arrangements during the outbreak of the COVID-19
                                                                                                                                                                       pandemic                                                     Less reliance on service providers;
                                                                                                                                                                       Conducted a range of staff training sessions and rolled      reducing the social and relationship
                                           ACTIVITIES ENHANCING OUTCOMES                                     TRADE-OFFS
                                                                                                                                                                       out wellness campaigns                                       capital; focusing on internal upskilling

                                                                                                                                                HUMAN CAPITAL
                                       Regulated business delivered stable results despite       Cost discipline constrained innovation                                Facilitated leadership development programmes
                                       weak macroeconomic environment                            projects and had a negative impact on
                                                                                                                                                                       Continued to invest in women and youth development
                                       Strong balance sheet was maintained                       intellectual capital
                                                                                                                                                                       initiatives
                                       Financial risk management by growing non-regulated        Given the outbreak of a global pandemic,                              Contributed to the following SDGs:
                                       business                                                  air travel was curtailed in South Africa
                                                                                                 and internationally and hampered our
                FINANCIAL CAPITAL

                                       Prudent cost management measures implemented
                                                                                                 ability to execute comprehensively on our
                                       Seeking to expand in markets in Africa                    financial year key performance indicators                             Linked to the following:
                                       Contributed to the following SDG:                         Intellectual capital and natural capital                              • National Development Plan 2030: Chapter 9:
                                                                                                 were negatively impacted by delays in                                   Improving Education, Training and Innovation
                                                                                                 implementing some of our infrastructure                               • Medium-Term Strategic Framework: Outcome 4:
                                       Linked to the following:                                  projects and digital initiatives, as funds                              Decent employment through inclusive economic
                                                                                                 have been conserved, anticipating a                                     growth
                                       • Medium-Term Strategic Framework: Outcome 4:             difficult 2020/2021 financial year
                                         Decent employment through inclusive economic                                                                                  • Department of Transport Strategic Priorities:
                                         growth                                                  Social and relationship capital was                                     Priority 6: Job Creation
                                                                                                 adversely affected by the decision to halt
                                       • Department of Transport Strategic Priorities:
                                                                                                 the hiring of non-critical positions
                                         Priority 6: Job Creation                                                                                                          ACTIVITIES ENHANCING OUTCOMES                                       TRADE-OFFS

                                                                                                                                                                       Advanced infrastructure enabled us to deliver safe and       Growth in manufactured capital negatively
                                                                                                                                                                       efficient air traffic services                               impacted natural capital and, in the short
                                                                                                                                                                       Invested in the acquisition of new and pioneering air        term, financial capital
                                           ACTIVITIES ENHANCING OUTCOMES                                     TRADE-OFFS                                                traffic management technology                                Restricted travel movements in the
                                                                                                                                                                       Leading communication, navigation and surveillance           last month of the financial year had an
                                       Invested in research, development and innovation          By investing in intellectual capital, we
                                                                                                                                                                       technology created advanced infrastructural value for        adverse impact on all of our capitals,
                                       partnerships to reduce our environmental impact and       reduce the stock of financial capital in
                                                                                                                                                                       our organisation and South Africa’s air traffic navigation   with the exception of natural capital
                                       develop new technologies                                  the short term
                                                                                                                                                                       sector
                                       Provided training and skills development for ATNS         In the longer term, financial capital, as
                                       staff and customer workforce                              well as manufactured, natural, human,                                 Increased contribution to job creation
                INTELLECTUAL CAPITAL

                                                                                                 and social and relationship capitals, are                             Contributed towards an efficient and integrated

                                                                                                                                                MANUFACTURED CAPITAL
                                       Continued to promote excellence in science, technology,
                                       engineering and mathematics education                     likely to be enhanced by our commitments                              transport infrastructure network for social and
                                                                                                 By further investing in our intellectual                              economic development
                                       Positively increased manufactured capital
                                                                                                 capital, we seek opportunities to support                             Positively contributed to improved environmental
                                       Contributed to the following SDGs:
                                                                                                 the environment; ultimately to the                                    sustainability interventions
                                                                                                 benefit of natural capital and social and                             Contributed towards the following SDGs:
                                                                                                 relationship capital
                                       Linked to the following:                                  The increase of greater automated
                                       • National Development Plan 2030: Chapter 9:              systems will decrease human capital,
                                                                                                 in the context of current employment                                  Linked to the following:
                                         Improving Education, Training and Innovation
                                                                                                 opportunities; but will lead to the creation                          • National Development Plan 2030: Chapter 4:
                                       • Medium-Term Strategic Framework: Outcome 5: A
                                                                                                 of new job categories                                                   Economic Infrastructure
                                         skilled and capable workforce to support an inclusive
                                         growth path                                                                                                                   • Medium-Term Strategic Framework: Outcome 4:
                                                                                                                                                                         Decent employment through inclusive economic
                                                                                                                                                                         growth; Outcome 6: An efficient, competitive and
                                                                                                                                                                         responsive economic infrastructure network
                                                                                                                                                                       • Department of Transport Strategic Priorities:
                                                                                                                                                                         Infrastructure build that stimulates economic growth
                                                                                                                                                                         and job creation

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