Air Traffic and Navigation Services Budget: briefing

Meeting report

TRANSPORT PORTFOLIO COMMITTEE
11 March 2005
AIR TRAFFIC AND NAVIGATION SERVICES BUDGET: BRIEFING

Chairperson: Mr J Cronin (ANC)

Documents handed out:
Air Traffic and Navigation Services briefing

SUMMARY
Air Traffic and Navigation Services (ATNS) assured the Committee that their organisation was financially sound, rendering service of internationally accepted quality, and making good progress with black economic empowerment. They were very active in training in conjunction with other African countries, and were well positioned for increasing involvement in air traffic control of much more of Africa and the Middle East.

MINUTES

Air Traffic and Navigation Services briefing
Mr M Mabasa (Acting Chairperson) announced that the Board, which had assumed office eighteen months previously, had proposed a strategy for the following three years, including the provision of excellent service delivery, sound financial management and accelerated transformation.

Dr J van Vollenhoven (Chief Executive Officer) presented a PowerPoint slideshow on the ATNS’ commitment to their shareholders; trends in the aviation industry; strategies and opportunities for 2005/06. He expanded on a number of acronyms used in his presentation such as: SAAATS: South African Advanced Air Traffic System; VSAT: Very Small Aperture system; ROCE: Return On Capital Employed; NAFISAT: North African VSAT system; ATC: Air Traffic Controller; ATA: Aviation Training Academy; UACC: Upper Airspace Contract; AIM: Aeronautical Information Management; ATM: Air Traffic Management.

Ms S Boomgaard (General Manager of Finances) set out their financial performance, covering the increase over time (both historical and predicted) in aircraft movement counts; tariff and other revenue; profit; revenue and expenditure per movement; capital expenditure; return on capital employed; predicted reduction in gearing ratio; and best practice benchmarking.

Dr van Vollenhoven presented human resources management priorities, especially transformation according to race and gender. He drew attention to the vastly reduced average delay in flights achieved over the previous three years.

Mr S Mtobeni (Chief Financial Officer) dealt with their training services and stressed the importance of their role in Africa in the context of NEPAD. International co-operation was assured.

Dr Van Vollenhoven announced his retirement after seven years as Chief Executive Officer.

Discussion
Mr D Schneemann (ANC) enquired whether ATNS staff were still being poached. Dr van Vollenhoven replied that air traffic controllers were much sought-after worldwide (there were 13 000 in the USA alone) and that at one stage, ATNS had employed 84 from overseas. Only four of those foreigners remained and the others had been replaced by locally trained staff. ATNS employed 220 air traffic controllers and were aiming at creating an ‘overstaff position’ of 5% to be prepared for adverse eventualities.

Mr A Ainslie (ANC) asked about co-operation with the South African Air Force; the control over small airstrips scattered over the country; whether low-cost carriers were adhering to minimum standards, and how the huge increase in ATNS tariffs of 22% had been justified.

Dr van Vollenhoven assured him that ATNS was rendering various services for the military; small airstrips were controlled by the CAA; low-cost carriers were adhering to acceptable standards; and that the substantial increase in tariffs were justified and accepted by the carriers to ensure a firm base from which ATNS could work. The tariffs constituted only 3% of an airfare ticket.

Dr van Vollenhoven explained that much of ATNS procurement was internationally sourced, which precluded direct black economic empowerment. Partnering with local firms was enforced – this was due to rise from 25% to 50% in five years’ time. At functional level, black representation was low, but they were aiming at 50% after five years. ATNS was pursuing co-operation with training schools in Angola, Nairobi and Niger and wherever else they detected synergy. At Polokwane airport, problems had arisen due to non-maintenance by the provincial authority of their ground equipment.

When recruiting for potential air traffic controllers, they focused on disadvantaged groups and areas of the country where they needed additional controllers. For information technology practitioners and auditors, they did not have to resort to much outsourcing. Their social responsibility requirements were met mainly by spending R22 million on training.

The Chairperson appreciated that ATNS was doing excellent work for Africa and NEPAD, in a competent and effective way, but cautioned that an excessive involvement could generate resistance from African countries.

Dr van Vollenhoven said that ATNS had considered bursaries at school level for maths as a first step in creating a source of suitably qualified employees. They had an agreement with the SAAF not to ‘steal’ their staff.

The meeting was adjourned.