20INTEGRATED REPORT AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED
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20 INTEGRATED 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
13
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.
2 3
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.
4 5
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
6 7
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
8 9
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.
10 11
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.
12 13
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
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 17Our 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 19Our 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 21Our 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 23Our 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 25Our 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 27Our 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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