Air Traffic and Navigation Services: Budget and Strategic Plan 2007 briefing

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16 May 2007
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Meeting Summary

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Meeting report

16 May 2007

Mr J Cronin (ANC)

Documents handed out:
Air Traffic And Navigation Services presentation

Audio Recording of the Meeting

Air Traffic and Navigation Services briefed the Committee on its strategic plan and budget. It noted a significant improvement in the way the business was running, and the re-prioritisation of infrastructure development and equipment upgrades. Transformation remained a challenge, compounded by the general worldwide scarcity of air traffic controller skills. ATNS was currently providing services to 12 airports on a contractual basis, was managing airspace of 22 million square kilometres and 10% of the world’s air space. Government did not fund ATNS and its main objective was to build long-term financial sustainability. As far as the budget was concerned, costs and income had increased systematically. ATNS was careful to operate in a controlled way and not to abuse its monopoly. It noted the categories of controllers and outlined the training schemes through the Academy. It was developing partnerships on the rest of the continent and participated in exchange of information with other countries. Priorities for the forthcoming year included upgrading of communication systems, reducing incidents, and upgrading safety management. It hoped to use new multilateration technology instead of secondary radar.

Questions were asked on the financial statements, the setting of tariffs, back up systems to cater for faults in electrically-driven systems, the causes of delays, security of equipment, the steps being taken to address vacancies, the training programmes, the medical testing, the relationship with government, and the funding and running of the training academy. Further questions were asked on ATNS's impact in Africa, global warming issues, and the safety rating level.

Air Traffic & Navigation Services (ATNS) Briefing

Mr Mike Mabasa, Chairperson, Air Traffic and Navigation Services Company Ltd (ATNS), noted that when he started his term of office there were quite a number of challenges at ATNS. He was pleased that there had been a notable progress in terms of improving the manner in which the business was run, of re prioritising, especially around infrastructure development, of updating and renewing the equipment. As ATNS operated in a highly technological environment it had to be updated with developments internationally. The biggest challenge was the issue of transformation and the Board had taken this particular role seriously. Currently the CEO was female and black and there were a number of new black executives.

Ms Wrenelle Stander, CEO, ATNS, reported that when mentioned when ATNS started in 2003, it had managed air traffic movements at 9 airports. It was currently providing services to 12 airports on a contractual basis. It managed an air space of 22 million square kilometres and 10% of the world’s air space. Further, it managed movements of 645 aircraft. The fastest airport, Oliver Tambo Airport in Johannesburg, had 56 aircraft movements per hour (Johannesburg), and by 2010 this would have risen to 64 movements per hour. ATNS had to provide safety and everything done was driven by five strategic imperatives. She mentioned that government did not fund ATNS and its main objective was to build long-term financial sustainability. It controlled aircraft at the different stages of flight and needed navigation equipment for that. It would also use communication intervention to try and reduce traffic at the airspace.

Ms Stander tabled details of the position over the past five years. In this time, the focus had been on safety, the revenue was stable and over the last 5 years there had been systematic increases in the financial position. The costs increased by 13% and salaries by 16% over the last 5 years, by reason of an increase in the numbers of staff, coupled with the fact that it was competing with other markets for skilled technical staff. She noted that the Regulator required a 22% tariff increase as there had been under recovery. It was not the intention to make a huge profit but to be adequately compensated for capital employed. Capital expenditure had increased by 18% per annum over the last five years. The availability of equipment was more or less on track.

The Chairperson asked the reason for the under recovery.

Ms Stander responded that the previous Board had decided to go lower than the consumer price index (CPI), but the Regulator then instructed that ATNS increase the tariff by 22% in line with indeces.

Mr Mabasa noted that there had been an increase in the last year, yet the presentation had touched on reducing the cost of doing business.

Ms Stander stated that ATNS was a responsible monopoly. In the 2007/08 financial year it had not increased the tariffs.

Mr S Farrow (DA) asked how the Regulator would determine the interest and tariff and whether it was related to other international norms or capex, or whether any other comparisons would be used.

Ms Stander stated that ATNS were running on a five-year plan. KPMG had been consulted to check the five-year plan, and the systems were similar to those used in the UK. Tariffs were constantly negotiated to make sure that ATNS were not abusing the monopoly system. She mentioned that the tariffs were not high; in fact could be regarded as amongst the cheapest in South Africa as they were very careful to benchmark their tariffs properly.

Ms Stander added that the business was dependant on effectively functioning communication, navigation and surveillance structures. There had been frequent cable theft, which raised concerns, as all systems operated on a triple redundancy when that happened. ATNS was currently in the process of installing an internal domestic V-SAT system. In terms of surveillance, there was a slight drop due to the upgrade in radar around the country and there was new radar at East London. ATNS had been slightly closer to their targets in terms of communication of data.

Mr G Schneeman (ANC) asked whether the percentages mentioned in the slides as targets were referring to the equipment availability as well.

Ms Stander confirmed that the figures did so, and that management had monitored this very closely.

The Chairperson asked about communication and downtime and whether this would apply to all of the airports.

Ms Stander responded that redundancy applied to all their systems in place, and there were other measures for communication and at the airports to make sure that the system could function under all conditions.

Ms Boni Dibate, Executive Manager, Service Delivery, ATNS, added that in an event that all the electrically driven systems might have gone down, there were certain other procedures in place, of which the pilots and controllers were aware, and there was then a manual system that would be put into effect.

Ms Stander added that ATNS had both a radar system and a procedural system.

Mr S Mshudulu (ANC) asked If ATNS was learning from other countries.

Ms Stander responded that in terms of innovation ATNS could learn from other people and also shared its knowledge, for instance most recently with a navigation provider from the United Kingdom. There was substantial interaction with Ghana and other African navigation systems, and ATNS was learning all the time. There had been improvement on the delays, but it must be noted that these were not always caused by ATNS and many were not air navigation related delays.

Ms Dibate expanded that the biggest cause of delays was the weather and the construction that was happening at OR Tambo Airport, and delays arose from parking and other problems caused by this. Electricity and communication availability were the other factors; if Eskom or Telkom experienced problems then this would have a knock-on impact on ATNS, who would have to re adjust systems as they occurred at that particular time. Short staffing or absenteeism could cause some delays, in terms of reshuffling, as ATNS might have to be operating with the bare minimum of staff. ATNS had to look at safety when it reduced its service availability.

Ms Stander agreed that the weather was a huge challenge, especially in Gauteng in summer, with severe thunderstorms and that it was better to be delayed than to fly. She also mentioned that the Western Cape had foggy rains in winter.

Mr Farrow raised the issue of security as was concerned about the East London scenario where some facilities were removed. He asked who was responsible for ensuring security of this equipment.

Ms Stander replied that ATNS always had limited theft problems. There was a difference between what ATNS owned and operated and equipment that the Airports Company of South Africa (ACSA) owned and operated. If copper wires are stolen then it became a problem and so the aircraft would divert somewhere else. All the staff of ATNS were security- cleared, and ATNS had biometric access to all their facilities, and all installations with radars were properly fenced and secured. There had been a unit set up within the company that was just looking at security.

Continuation of briefing
Ms Stander added that the air traffic movements had grown by 5% in the last 2 years. There was a very low percentage of delays. There had been an increase of licensed air traffic controllers, in the last year. Retention of staff had been improved. There were three main categories: Air Traffic Controller (ATC), Senior Air Traffic Controller (SATC), and Principal Air Traffic Controller (PATC). ATNS was looking at how to provide services to cope with the 2010 demands. Currently it was 7% short on its Human Capital Plan. Although the plan envisaged 274 people, 254 had been achieved, although not all were yet fully operational, and others needed retraining. On the operational side, ATNS was short by 18%; to become operationally competent personnel had to be validated. ATNS would need to increase licensed staff to match the growth in demand. ATNS was 3% short of the employment equity targets, and there was still a low number of women on the staff. In order to make the potential of 72 aircraft movements per hour into reality at O R Tambo Airport, there would have to be improvements on the ground and increases in staff.

Ms Stander noted that ATNS was very active on the Continent although there were not so many staff working on the continent as opposed to in South Africa. It would like to be regarded as a partner and was developing relations with other countries. The funding shown had emanated from third party funders. ATNS had a vision of a “Cape to Cairo” satellite network that would be able to communicate with all the aircraft control centres on the continent. It would also like to send messages to other countries, and was currently in the process of upgrading the communication methods. The number of external students from outside South Africa being trained had increased.

Ms Stander stated that the strategic imperatives for 2007/08 remained the same. ATNS had a target of reducing the number of incidents to 2.5 per 100 000 movements, and had introduced a new safety management system. She mentioned that the business was based on a risk environment and had tried to look at positive ways of trying to address the issue of incidents and treat the controllers in a better way. The executive committee met every month to discuss any potentially risky issues.

In 2007 ATNS would be launching a pilot-study aviation programme as a pilot, together with University of Pretoria. It now had a new study centre with 40 stations, and fully equipped with computers. There was a new strategic manager for HR service, so that responsibilities were more clearly set out. The international recruits and the local staff were placed on exactly the same packages. ATNS had not to date done much on HIV and AIDS but were now hoping that there would be increased focus on it. It hoped to use a new technology- multilateration- instead of secondary radar at regional airports but would need approval from African Technical Advisory Committee (ATAC) before doing so. Some communications needed to be replaced. Regional airports were growing fast and would have to be equipped and ATNS was looking at improving the service with more safety measures and more cost-effectiveness.

Ms N Khunou (ANC) mentioned that she would have preferred to have received this good report earlier so that she could have studied it. She asked about the shortage of staff and needed to know the main reasons for vacancies. She also asked clarity on the medical clearances mentioned.

Mr Schneeman also raised the issue of staff and noted that recruitment of local staff appeared to be problematic. He asked the reasons, and whether any international staff were employed on a contractual or permanent basis.

Mr M Swathe (DA) noted that ATNS had indicated that it was not getting any subsidy from government. He asked how much ATNS charged for the training courses, and whether that money was included in the budget.

Ms Stander responded that ATNS needed to employ 40 new people. Training one person could cost R500 000 and could take three to five years. ATNS, in answer to advertisements, had received 4200 applications, but of those only 1000 had the minimum requirements. These had undergone psychometric testing and only 40 were successful. Air Traffic controllers had become a scarce global profession and there was much competition because everyone was in demand. The first priority of ATNS was to try to retain existing staff and then recruit more staff on the selection criteria. If the selection was not done properly then ATNS would lose money. In order for ATNS to train new people it had to be already over-staffed as releasing local staff to train meant that its core air traffic service would not be provided. In respect of training, she confirmed that a fee was charged to non-South African students, and this would be used to subsidise the bursaries given to South African applicants. Of the 40 students who managed to pass the initial selection process about 70% would finally pass to become fully trained.

Ms Dibate assured the Committee that safety was not negotiable when it came to the service delivery at ATNS; it would rather have delays than have overworked staff who would under perform. Short-term strategies were used for the international recruitment. Many people on the programmes had the potential to become aircraft controllers. Skills were internationally scarce in this field.

Ms Jean Lubbe, Executive Manager: Training, ATNS, referred again to the ratio of 4 000 applicants to the final 40 who could go into training. This was typical of the worldwide ratios, and reflected the extremely strict selection system. The selection process was important and so was the three to five year training period.

Ms Stander responded to the question on medical requirements by explaining that all applicants had to undergo hearing, visual and colour-vision testing. Secondary Surveillance Radar (SSR) helped interpret the movements seen on the screen from the primary radar. In future ATNS was hoping to use multilateration.

A member asked about the relationship between government and ATNS.

Mr Farrow indicated that he would like to have had some indication of the costing and income of the Academy. He asked whether there were any links giving accreditation, either in Africa or internationally. He asked also how else the Academy was funded, and asked for an indication of what was happening in the organisation.

Ms Stander noted that ATNS did not receive money from government; however, it was the main shareholder of ATNS. ATNS provided rescue and safety services on behalf of government.

Ms Stander noted that the Aviation Training Academy (ATA) cost R25 million every year, of which around 51% went on staff, and 16% on facilities. The Academy had state of the art facilities. The Sector Education and Training Authorities (SETAs) were not putting any money into the aviation sector. Therefore ATNS provided air traffic control services and they provided the equipment. Regional airports were not profitable and ATNS had a presence there for purposes of the network. There was a strategic reason why it was involved in Africa and ATNS was probably amongst the best in Africa.

Ms Stander mentioned that there was a link to international air navigation service providers and ATNS was a leading provider in Africa.

Ms Lubbe said that the Academy had an impact in Africa, including the fact that it had trainers for the use of English, as this was required at a certain competency level.

Mr Mshudulu asked if there was a possibility to visit the Academy.

Mr M Moss (ANC) asked about the flaws in the education system arising from lack of capacity to give full teaching in maths and science. Students were still being advised to stick to lower grade matrics or advised not to attempt the higher grade because of the pass marks. He noted that many technikons had bridging courses and he asked what the Academy was doing to address that problem. He noted that all countries had shortages in air traffic controls and questioned if the practice of recruiting from other countries would be sustainable. Finally he requested what criteria applied for entrance.

A member asked whether ATNS had any comment on global warming, as South Africa seemed to be one of the worst culprits.

Ms Stander mentioned that there was tension in the international bodies at the moment. Environmental matters were not currently at the top of their agenda, but were elsewhere in Europe. Air navigation did not appear to be a high target area as yet, and ATNS was not experiencing any pressure.

A member asked if recruitment processes were carried out all over South Africa.

Ms Stander responded that ATNS did recruit all over South Africa and used both colour advertisements and career marketing devices in the campaigns.

The chairperson asked who the target market was in particular.

Ms Stander responded that ATNS was targeting matriculants with a C mark in mathematics, and qualified engineers had also been included in the aviation scheme. Some refresher courses were also run. The international students included people from Uruguay and Zimbabwe. The ATNS salaries were competitive. The Academy did not select people from other countries; the selection process was carried out in their countries by their sponsors.

Mr Mogale asked about the ATNS rating level in South Africa in terms of safety. He asked whether there was any indication of incidents.

Mr Stander responded that there had recently been an incident involving a new aircraft and an experienced pilot. ATNS was involved in research and rescue and the Department of Transport had assigned some roles to ATNS in this regard.

Ms Dibate stated that the small crafts were not counted since they flew under a certain height. beneath the air space.

Mr Mogale asked about employment equity and whether there had been any intervention by government.

Ms Stander said ATNS was not on target, as it was 3% below race equity targets and there were far too few women.

Mr Mshudulu asked why there was distinction made in trying to retain senior staff as opposed to other staff. :

Ms Stander said that the losses were mostly at principal air traffic controllers level.

The Chairperson noted that there were particular challenges in retention and the equipment at smaller airports. He suggested that the Department of Transport should be asked to look into some of these issues.

The meeting was adjourned.



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