INTEGRATED ANNUAL REPORT 2011
Mission To develop and manage world-class airports for the benefit of all stakeholders Vision To be a world-leading airport business Values PRIDE Passion Living our values and pursuing our goals Results Being customer and partner focused Integrity Enabling trust and respect in all our actions Diversity Promoting our African heritage in a global context Excellence Continuously improving and innovating our business Strategy To build an efficient and customer-focused business
CONTENTS AIRPORTS COMPANY SOUTH AFRICA Mission, Vision and Values 2 Airport Statistics 5 Company Profile 6 Airport Locations 7 Operating Structure 8 Group Structure 9 Board of Directors 10 Executive Committee 12 Chairman's Review 16 Managing Director s Review 18 Strategic Positioning 20 Delivering on our Objectives 22 Business Review 24 Stakeholder Engagement 33 Our Environment 38 Integrated Risk Management 44 Corporate Governance and Compliance 47 Airport Operations 54 Human Resources 61 Corporate Social Investment 64 Financial Contents Statement of Responsibilities and Approval 67 Certificate by Company Secretary 67 Information Presented in Terms of S(55)2 of the PFMA 68 Report of the Board Audit Committee 70 Report of the Independent Auditors 71 Directors Report 72 Statement of Financial Position 75 Statement of Comprehensive Income 76 Statement of Cash Flows 77 Statement of Changes In Equity 78 Notes to the Financial Statements 79 Statistical Review 134 Administration 141 AIRPORTS COMPANY SOUTH AFRICA INTEGRATED ANNUAL REPORT 2011 3
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Airport Statistics 1. O.R. TAMBO INTERNATIONAL AIRPORT Passenger throughput 18 664 728 Total air traffic movements 212 448 Annual passenger handling capacity 28 000 000 Public parking bays 16 300 2. Cape Town INTERNATIONAL AIRPORT Passenger throughput 8 225 422 Total air traffic movements 93 628 Annual passenger handling capacity 14 000 000 Public parking bays 6 080 3. King Shaka INTERNATIONAL AIRPORT Passenger throughput 4 886 552 Total air traffic movements 54 476 Annual passenger handling capacity 7 500 000 Public parking bays 4 500 4. Port Elizabeth INTERNATIONAL AIRPORT Passenger throughput 1 416 922 Total air traffic movements 73 068 Annual passenger handling capacity 2 000 000 Public parking bays 900 5. East London Airport Passenger throughput 778 184 Total air traffic movements 38 628 Annual passenger handling capacity 1 200 000 Public parking bays 550 6. Bloemfontein INTERNATIONAL AIRPORT Passenger throughput 417 642 Total air traffic movements 18 846 Annual passenger handling capacity 600 000 Public parking bays 370 7. George Airport Passenger throughput 545 206 Total air traffic movements 33 004 Annual passenger handling capacity 900 000 Public parking bays 415 8. Upington INTERNATIONAL AIRPORT Passenger throughput 48 498 Total air traffic movements 7 176 Annual passenger handling capacity 100 000 Public parking bays 100 9. Kimberley Airport Passenger throughput 132 830 Total air traffic movements 12 456 Annual passenger handling capacity 200 000 Public parking bays 90 10. Pilanesberg INTERNATIONAL AIRPORT Passenger throughput 7 844 Total air traffic movements 4 202 Annual passenger handling capacity 40 000 Public parking bays 20 AIRPORTS COMPANY SOUTH AFRICA INTEGRATED ANNUAL REPORT 2011 5
Company Profile Airports Company South Africa Limited (ACSA) was formed in 1993 as a public company under the Companies Act of 1973, as amended, and the Airports Company Act of 1993, as amended. Although ACSA is majority owned by the South African Government, through the Department of Transport, the Company is legally and financially autonomous and operates under commercial law. ACSA has just completed its most ambitious infrastructure capacity development and improvement programme ever, prepared and brilliantly delivered against the world s and our country s expectations for a successful 2010 FIFA World Cup. An important component of this colossal task was to ensure that there was a smooth and hassle-free transfer to new infrastructure, together with its immediate and effective operation. This, in world airport terms, is undoubtedly the task that has most challenged airports around the world. In a country that is troubled by chronic unemployment, ACSA is pleased to be contributing to job creation in South Africa, achieved through infrastructure investment and the partnerships that we are developing with the private sector. As recognised by global consulting firm Mott- MacDonald, the investment by ACSA in infrastructure development has been appropriate, leading to significant socio-economic benefits. It is estimated that the three major international airports sustain about 300 000 jobs (direct and indirect) and that planned future developments, as a result of passenger and cargo growth, will result in the creation of some 150 000 new jobs over the next 10 years, provided the envisaged infrastructure development plans are realised. For the past nine years, service standards have been benchmarked through the Airports Council International s (ACI) Airport Service Quality Programme. There are currently 180 airports around the world taking part in this programme, ranging from Atlanta (the largest) to Incheon and Kuala Lumpur (the most efficient). To date, ACSA airports have won 20 achievement awards for passenger satisfaction. Formed to own and operate the nine principal South African airports, including the three main international gateways of O.R. Tambo, Cape Town and King Shaka s, ACSA added Pilanesberg to its network in 1998 under a 30-year concession with the North West Province. As well as providing worldclass, secure infrastructure for airlines to transport people and goods, ACSA extends its responsibilities to include the promotion of tourism, the facilitation of economic growth and job creation, and protection of the environment. ACSA s revenue is generated from aeronautical and non-aeronautical sources. The former is derived from government-regulated charges, or tariffs, paid by airlines and includes fees for aircraft landing, aircraft parking and a passenger service charge. Non-aeronautical income is derived from multiple sources that include retail sales, concession fees, property leases, parking fees, hotel operations, advertising and revenues from our involvement in international activities. A large international airport should be thought of as a living entity. Although it is a collection of inanimate objects such as runways, hangars, terminal buildings, car parks, roads and a host of physical structures to support the activities of an airport, in reality it is an organism that pulses with life, just like a city. An airport is not only for air travellers; O.R. Tambo International, for instance, is host to about 20 000 people who go to work there every day to provide the multiple services that tend to be taken for granted when visiting an airport. An airport is not just for flying: it is the heart of a network of transport arteries for cars, trucks, buses taxis and trains. Travellers are often accompanied by meeters and greeters, adding to the community that goes to an airport to eat, to drink, to browse in the shops, refresh and relax, and, of course, to fly! Outside South Africa, ACSA will endeavour to identify and participate in select airport management and operating concession opportunities as part of its overall growth strategy. In this regard, in February 2006, ACSA and a consortium comprising the Indian company GVK and South African listed company, Bidvest, won a concession to manage Mumbai (MIAL). ACSA considers MIAL an exciting and valuable investment. 6 AIRPORTS COMPANY SOUTH AFRICA INTEGRATED ANNUAL REPORT 2011
airport locations ZIMBABWE BOTSWANA MOZAMBIQUE NAMIBIA Pilanesberg O.R Tambo International Airport Upington Kimberley Airport Bloemfontein SOUTH AFRICA King Shaka Atlantic Ocean East London Airport Cape Town George Airport Port Elizabeth Indian Ocean International airport National airport AFGHANISTAN CHINA ACSA managed airport PAKISTAN NEPAL INDIA Mumbai International Airport AIRPORTS COMPANY SOUTH AFRICA INTEGRATED ANNUAL REPORT 2011 7
OPERATING STRUCTURE BOARD OF DIRECTORS Company Secretary Group Executive: Governance and Assurance MANAGING DIRECTOR Executive Director: Finance Group Executive: Aviation Services Group Executive: Communications and Brand Management Group Executive: Commercial Services Assistant Group Executive: Airport Planning Group Executive: Human Resources Group Executive: Operations General Manager: O.R. Tambo General Manager: Cape Town General Manager: King Shaka International and National Airports 8 AIRPORTS COMPANY SOUTH AFRICA INTEGRATED ANNUAL REPORT 2011
Group structure Airport Operations O.R. Tambo Cape Town King Shaka Port Elizabeth East London Airport Bloemfontein George Airport Upington Kimberley Airport Pilanesberg AVIATION SERVICES COMMERCIAL SERVICES SUPPORT FUNCTIONS Finance and IT Human Resources Company Secretariat Communications and Brand Management Risk Management Internal Audit Strategy Legal AIRPORTS COMPANY SOUTH AFRICA INTEGRATED ANNUAL REPORT 2011 9