CORPORATE PLAN 2016/17 – 2018/19 ATNS AIR TRAFFIC AND NAVIGATION SERVICES Air Traffic and Navigation Services CORPORATE PLAN 2016/17 – 2018/19 1 OFFICIAL SIGN-OFF It is hereby certified that the ATNS Corporate Plan 2016/17 – 2018/19: Was developed by the management of ATNS under the guidance of ATNS Board; Takes into account all the relevant policies, legislation and other mandates for which the ATNS is responsible; Accurately reflects the strategic outcome-oriented goals and objectives which ATNS will endeavour to achieve over the period 2016/17 – 2018/19 in line with Department of Transport outcomes. _________________________ _______________________ Thabani Mthiyane Date Chief Executive Officer Air Traffic and Navigation Services CORPORATE PLAN 2016/17 – 2018/19 2 Table of Contents EXECUTIVE SUMMARY ............................................................................................. 4 1. ATNS BACKGROUND ........................................................................................ 7 2. ATNS BUSINESS OVERVIEW ............................................................................. 8 3. OPERATING PRINCIPLE .................................................................................... 9 4. ATNS STRATEGY ............................................................................................ 25 5. ATNS CORE PROGRAMMES ............................................................................ 31 6. NATIONAL AND CONTINENTAL OUTCOMES .................................................... 40 7. KEY PERFORMANCE INDICATORS .................................................................. 47 8. ORGANISATIONAL STRUCTURE ..................................................................... 56 9. GOVERNANCE STRUCTURE ........................................................................... 58 10. ATNS FINANCIAL RESOURCES ....................................................................... 74 11. ATNS FINANCIAL PLAN ................................................................................... 76 12. CAPEX PLAN AND ATM OPERATIONS ............................................................. 85 13. ATNS BORROWING PLAN ............................................................................... 92 14. DIVIDEND PLAN .............................................................................................. 94 15. INVESTMENT POLICY ..................................................................................... 95 16. ASSET AND LIABILITY MANAGEMENT ............................................................. 97 17. HEDGING POLICY ......................................................................................... 100 18. RISK MANAGEMENT ..................................................................................... 101 19. SAFETY MANAGEMENT SYSTEM .................................................................. 112 20. FRAUD PREVENTION PLAN ........................................................................... 119 21. MATERIALITY AND SIGNIFICANCE FRAMEWORK .......................................... 127 22. HUMAN CAPITAL PLAN ................................................................................. 132 23. EMPLOYMENT EQUITY PLAN ........................................................................ 136 24. COMMERCIAL SERVICES PLAN..................................................................... 139 25. INFORMATION TECHNOLOGY PLAN .............................................................. 150 26. CORPORATE SUSTAINABILITY PLAN ............................................................ 154 27. REFERENCE ................................................................................................. 165 Air Traffic and Navigation Services CORPORATE PLAN 2016/17 – 2018/19 3 EXECUTIVE SUMMARY ATNS faces exciting opportunities as well as critical challenges in dealing with external market forces and the operating environment. In the local operating environment, ATNS is embarking on year 2 of its new Economic Regulatory chapter. After having successfully having engaged the users and aviation Industry as part of the permission application process, the new permission was due to commence in April, 2015. It is eagerly anticipated that the Shareholder, Department of Transport and the Regulating Committee will provide the clearance to formally commence the new chapter. Furthermore, ATNS continues to implement the Strategy adopted and approved in January 2015 by the Board of Directors. The organization is conscious of the global economic factors which require us to continue striving for efficiency in operations and provide value to our stakeholders, especially the airlines. The 2016/17 – 2018/19 Corporate Plan prioritizes the activities according to the ATNS mandate. In this plan, further considerations to external environment factors, stakeholder concerns and expectations guide our deliberations in strategic choices. The ATNS chosen strategy is the expansion of our products and services into the African continent through the non-regulated business. The higher purpose of this strategy is to improve air traffic safety in Africa. Currently the non-regulated business is already contributing 10% to ATNS overall revenue and the intention is to grow this percentage over time. ATNS’s regional aspirations are also guided by the Africa Agenda 2063 which seeks to mobilize continental programmes to achieve social and economic transformation of the Continent. All economies in the world value a quality air transport sector as a contributor to economic prosperity. ATNS unequivocally strives to respond to the radical economic transformation in the South African society. In this Corporate Plan, ATNS reflects on these governmental outcomes under the Strategy section. ATNS is supported by various policies and/or plans that ensure effective governance and management of the organization. The corporate plan includes detailed projected and consolidated income statements, balance and sheet cash flow statement of the organization for the next three years. Air Traffic and Navigation Services CORPORATE PLAN 2016/17 – 2018/19 4 ATNS values the support and direction of the Shareholder, the Minister of Transport and the entire Department of Transport. ATNS is committed to aligning all its activities and programmes to the governmental outcomes, the Shareholder’s departmental outcomes, and the National Development Plan (NDP) through the Departmental Key Performance Indicators. ATNS is committed to sound corporate governance practices, which are continuously reviewed to ensure leading practice standards are maintained, as are applicable to a State-Owned Company, and as recommended by the King Code of Governance for South Africa (2009) (King III). As a Schedule 2 public entity reporting to the Department of Transport, ATNS is complying fully with the statutory requirements to prepare and present a corporate plan annually. This 2016/17 – 2018/19 Corporate Plan aims to: Provide the Shareholding Minister with the current and future plans of the Company, as required by Section 7 of the ATNS Company Act (Act 45 of 1993), Comply with the requirements of Section 52 of the Public Finance Management Act(PFMA) (Act 1 of 1999), Comply with Treasury Regulation 29, and Comply with good reporting standards and good corporate governance. The document framework is structured to support understanding of the ATNS strategy, from formulation to the expected future direction of the entity for the period 2016/17– 2018/19. The contents of this document are ordered as follows: Section A provides details of the ATNS business overview, as well as the legislative and regulatory framework within which ATNS operates. Section B describes the ATNS Strategy and what it aims to achieve in the next three financial years. Section C provides the supporting framework, which includes plans and policies supporting the management of ATNS. Air Traffic and Navigation Services CORPORATE PLAN 2016/17 – 2018/19 5 SECTION A ATNS BACKGROUND ATNS BUSINESS OVERVIEW OPERATING PRINCIPLES Air Traffic and Navigation Services CORPORATE PLAN 2016/17 – 2018/19 6 1. ATNS BACKGROUND The Air Traffic and Navigation Service Company Limited was established in 1993 in terms of the ATNS Company Act (Act 45 of 1993), to provide air traffic management solutions and associated services on behalf of the state, in accordance with ICAO Standards and Recommended Practices and the South African Civil Aviation Regulations and Technical Standards. ATNS is an air navigation services provider (ANSP) and is governed by the nation’s legislative and administrative framework. ATNS is also a commercialized ANSP operating on the “User Pays” principle that relies on current revenues and debt funding for its operational and capital expenditure requirements. THE PURPOSE OF ATNS The principal purpose of ATNS is to plan and operate safe and efficient services in the airspace for which the state is responsible through the following: Airspace infrastructure provision Development of human capital ( ATC and Engineering Technicians) Partnerships and collaboration with other stakeholders The economic regulation regime is specified in Section 11 of the ATNS Company Act. ATNS cannot levy an air traffic service charge unless it is in possession of a valid written permission. The permission is issued by the Regulating Committee, which is required to balance the interests of the company with the interest of its clients, including promoting the safe, efficient, economic and