Air Traffic and Navigation Services (ATNS) Company

Annual General Meeting

Johannesburg, Friday, 19^th August 2005 – The Air Traffic and Navigation Services Company today held their 12^th Annual General Meeting.

The Minister of Transport, Jeff Radebe was present at the meeting chaired by the ATNS Chairperson, Mike Mabasa. 

The Company’s Financials were presented and look as follows:                                             

Herewith is a copy of the Chairman’s report as detailed in the Annual report:

The air transport industry plays a major role in the global economy and is in fact one of the fastest growing sectors in the world. All states depend on the aviation industry to maintain or stimulate economic growth and to assist in the provision of essential services to local communities.

In this light, civil aviation is clearly a significant contributor to the overall well-being and economic vitality of South Africa and indeed of the continent, particularly given this country’s role in supporting the development of a safe and efficient African aviation network.  It is therefore clearly vital to maintain a healthy civil aviation environment, which is achieved through the provision of safe, secure, efficient and environmentally-sustainable air navigation system at global, regional and national levels.

South Africa, through ATNS, has been directly involved in the development of the global air traffic management (ATM) operational environment of the future, primarily through its active role in the International Civil Aviation Organisation (ICAO), thereby positioning itself on the leading edge of service delivery innovation. This generates significant benefits for the company, the country, the continent and global aviation as a whole.

Domestically, ATNS’ achievements to date and its future plans are consistent with the National Airspace Master Plan proposed to 2010, and the National Policy on Airports and Airspace Management, currently under revision by the Department of Transport. The goal of these efforts is technologically-advanced and harmonised service provision in South Africa and the region. The Department of Transport, as ATNS’ sole shareholder, is clearly a major stakeholder and we are committed to ensuring that the ATNS strategy is fully supportive of government strategy both in terms of transport and of its ongoing contribution to African growth.

The company performed exceptionally over the past 12 months.  Despite the fact that the international airline industry experienced a challenging year, South African air traffic continued to grow, due primarily to volume generated by the two low cost domestic carriers and through continued competition on the international routes to Johannesburg and Cape Town.

Operating profit increased by 92% from R36.7 million the previous year to R70.7 million during the period under review, while net profit after tax rose by 84%, from R25.9 million to R47.9 million. As a result, our return on capital employed improved from 5.91% in the previous year to 9.45%, and exceeded the permission target of 8.05% stipulated by the Regulator.

Tariff revenue increased by 27% over the previous year, of which regulated tariff increases comprised 22%. Billable aircraft movements increased by 3.6% compared to the previous year, largely due to the significant increase in flights by low cost carriers. Tariff revenue per movement increased by 22.7% from R677 in 2003/04 to R831.

Delays in the implementation of various capital projects following the appointment and settling in of the new ATNS board resulted in savings in planned operating costs and depreciation and interest charges. The company also experienced a marked increase in external training revenue compared to the previous year.

The new R228 million South African Advanced Air Traffic System (SAAATS) was completed and successfully implemented, a major milestone project for which those responsible deserve congratulations. The balance sheet shows an increase in fixed assets of 7%, mainly due to expenditure incurred on the remainder of the SAAATS project, as well as capital expenditure incurred in respect of the radar replacement project which started during the previous year. Investments and cash on hand increased by 43.7%. Total interest-bearing borrowings increased by 5.7% as a result of new loans raised for capital projects, which were partially offset by capital repayments on existing loans. Consequently, the debt: equity ratio at year-end improved from 0.36:1 the previous year to 0.34:1.

It is clear then that the transformation of ATNS to a commercial entity, a process which began in 1993, continues apace. The focus of ATNS remains the further enhancement of service delivery, as well as ongoing risk management and the consolidation of human resource gains and employment equity.

Partnerships elsewhere in Africa and beyond continue to grow. Agreement was reached with the relevant Southern African Development Community (SADC) states that ATNS, in partnership with the International Air Transport Association (IATA), would be the service provider for the important VSAT II project. A further partnership was agreed between ATNS, IATA, ICAO and the North Eastern African states on the provision of a similar satellite communication network there. ATNS also secured a United Nations contract for an aeronautical information project in the Democratic Republic of Congo.

It is with regret that I report the resignations of Wisani Matsimbi and Peter Fandeso from the board of ATNS during the period under review. Their valuable contributions are appreciated.

The board believes that aviation has a vital part to play in the economic revival of Africa – and that ATNS will play an increasingly important role in the continent’s air traffic management environment.

I would like to extend my sincere appreciation to my fellow board members and the ATNS executive team for their efforts during the year. I also thank the outgoing CEO, Dr Johan van Vollenhoven, for the outstanding role he has played in the success of ATNS to date. I wish him well in all his future endeavors.