1

PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE

12 MARCH 2003

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WORLD-CLASS AIR TRAFFIC SERVICESWORLD-CLASS AIR TRAFFIC SERVICES

ENSURE SAFE NAVIGATIONENSURE SAFE NAVIGATION

DELIVER A REAL RETURN ON INVESTMENTDELIVER A REAL RETURN ON INVESTMENT

KEY ROLE PLAYER IN AVIATION SAFETYKEY ROLE PLAYER IN AVIATION SAFETY

EMPLOYER OF DEMOGRAPHICALLY REPRESENTATIVEEMPLOYER OF DEMOGRAPHICALLY REPRESENTATIVE

WORKFORCEWORKFORCE

ACTIVE ROLE IN REGION AVIATION DEVELOPMENTACTIVE ROLE IN REGION AVIATION DEVELOPMENT

COMMITMENT TO THE COMMITMENT TO THE SHAREHOLDERSHAREHOLDER

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CREATE SUSTAINABLE/IMPROVEDCREATE SUSTAINABLE/IMPROVED RSARSA SERVICE DELIVERYSERVICE DELIVERY

-PEOPLEPEOPLE CAPACITY & TALENT MANAGEMENT CAPACITY & TALENT MANAGEMENT

-IMPLEMENTATION OF NEW SAAATS SYSTEM-IMPLEMENTATION OF NEW SAAATS SYSTEM

-STRENGTHEN CUSTOMER RELATIONSHIPS-STRENGTHEN CUSTOMER RELATIONSHIPS

MAINTAIN FINANCIAL INTEGRITY

-REGULATED VS NON-REGULATED REVENUE-REGULATED VS NON-REGULATED REVENUE

PRIORITISE STRATEGIC OPPORTUNITIESPRIORITISE STRATEGIC OPPORTUNITIES

SOUND PARTNERING STRUCTURESSOUND PARTNERING STRUCTURES

STRATEGIC OBJECTIVES STRATEGIC OBJECTIVES

4

2002/20032002/2003

AIRCRAFT MOVEMENTS : 550 000 AIRCRAFT MOVEMENTS : 550 000

TARIFF TURNOVER : R285M TARIFF TURNOVER : R285M

FULL SERVICE : 9 AIRPORTSFULL SERVICE : 9 AIRPORTS

SERVICE ON CONTRACT : 12 AIRPORTSSERVICE ON CONTRACT : 12 AIRPORTS

* * AIRCRAFT MOVEMENTS : 100 000 AIRCRAFT MOVEMENTS : 100 000

TOTAL EMPLOYEES : 600TOTAL EMPLOYEES : 600

ATS STAFF : 330ATS STAFF : 330

TOTAL AIRSPACE : 22 000 000KM2TOTAL AIRSPACE : 22 000 000KM2

KEY NUMBERSKEY NUMBERS

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FINANCIAL PERFORMANCE

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FORECAST RESULTS : 2002/03FORECAST RESULTS : 2002/03 Aircraft movements expected to increase from 432,300 to 460,000

(Growth of 6.8%)

Tariff related turnover expected to increase by 17% from R244M to R285M

Other revenue decreases by R7M due to:

- Forex loss on revaluation of dollar assets of R7M vs profit of R6M last year

- Lower income from AIS services - R1M

- Lower interest income of R1,7M vsR4M - due to capital projects down payments Partially offset by increases in :

- VSAT revenue R1.3M - higher movements

- Training revenue R6,3M (36%)

Expenditure higher than budget due to:

- Additional staff costs

- Higher insurance costs Core business profit (excl. VSAT) - expect to achieve target of R38M before tax

compared to last years R27M (40%)

Expected ROCE of 7,4% vs target of 14%

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MOVEMENT COUNTS OVER TIMEMOVEMENT COUNTS OVER TIME

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03

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INTERNATIONAL COMPARISON OF EN-ROUTE

ANS CHARGES-900nmCHARGES-900nm

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

$2,600

$2,800

$3,000

$3,200

$3,400

$3,600

ATNS ZIMBABWE IRELAND * AUSTRALIA

#

NEW

ZEALAND +

ASECNA BOTSWANA CZECK REP * NAV

CANADA

NATS (LHR)

*

COUNTRIES

B747 (395 m.t.)

B767 (185 m.t.)

A320 ( 75 m.t.)

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REVENUEREVENUE

0

50

100

150

200

250

3001

99

6/9

7

19

97

/98

19

98

/99

19

99

/00

20

00

/01

20

01

/02

20

02

/03

Tariff Revenue

Other Revenue

RM’s

10

NET PROFIT BEFORE TAXNET PROFIT BEFORE TAX

0

5

10

15

20

25

30

35

40

45

50

19

96

/97

19

97

/98

19

98

/99

19

99

/00

20

00

/01

20

01

/02

20

02

/03

RM’s

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REVENUE PER MOVEMENTREVENUE PER MOVEMENT

0

100

200

300

400

500

600

700

800

19

96

/97

19

97

/98

19

98

/99

19

99

/00

20

00

/01

20

01

/02

20

02

/03

Revenue permovementExpenditure permovement

R’s

12

INCOME STATEMENTINCOME STATEMENT

1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07Total Revenue 233 240 298 340 406 450 493 543Tariff Revenue 204 215 244 285 334 366 403 445Other Revenue 29 25 54 55 72 84 90 98

Operating costs 168 170 215 242 297 319 328 342Salaries 100 112 124 138 159 167 174 183Elec Maintenance 18 9 17 19 24 25 26 27Telecoms 13 15 18 22 25 27 28 29Other 37 34 56 63 89 100 100 103

Operating profit 65 70 83 98 109 131 165 201

Depreciation 35 42 46 52 56 67 72 80

Profit before tax 30 28 37 46 53 64 93 121Taxation 9 8 12 14 16 19 28 36Profit after tax 21 20 25 32 37 45 65 85

R’Million

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BALANCE SHEETBALANCE SHEET

1999/0 2000/1 2001/2 2002/3 2003/4 2004/5 2005/6 2006/71999/0 2000/1 2001/2 2002/3 2003/4 2004/5 2005/6 2006/7 CAPITAL EMPLOYED Shareholders Equity 310 330 355 387 424 469 534 618 Long Term Liabilities 43 59 52 191 172 146 116 83

353 389 407 578 596 615 650 701

EMPLOYMENT OF CAPITAL Fixed Assets 338 347 388 446 500 499 568 638 Net Current Assets 15 42 19 132 96 116 82 63

353 389 407 578 596 615 650 701

R’Million

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ATNS INVESTMENT IN INFRASTRUCTURE

• R365M OVER PAST 5 YEARS:

• COMMUNICATION R86M

• NAVIGATION R30M

• SURVEILLANCE R204M

• FACILITIES R45M

• FURTHER R225M IN THE NEXT 2

YEARS ATNS

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CAPITAL EXPENDITURECAPITAL EXPENDITURE

0

20

40

60

80

100

120

19

99

/00

20

00

/01

20

01

/02

19

99

/00

20

00

/01

20

01

/02

20

02

/03

20

03

/04

20

04

/05

20

05

/06

20

06

/07

R’M

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KEY RATIOSKEY RATIOS

1999/0 2000/1 2001/2 2002/3 2003/4 2004/5 2005/6 2006/71999/0 2000/1 2001/2 2002/3 2003/4 2004/5 2005/6 2006/7 Return on Capital Employed 6.94% 6.02% 7.37% 8.52% 9.22% 10.76% 13.46% 15.11% Return on Equity 6.97% 6.15% 7.33% 8.64% 9.16% 10.03% 12.92% 14.72%

Return on Turnover 7.92% 7.93% 8.20% 9.61% 10.33% 11.61% 14.12% 16.11% Gearing Ratio 0.04 0.08 0.06 0.41 0.33 0.24 0.16 0.08

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OUR PEOPLE

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-- LEADERSHIP DEVELOPMENT LEADERSHIP DEVELOPMENT

-- COMMERCIAL AWARENESS COMMERCIAL AWARENESS

- - CAREER PLANNING AND DEVELOPMENT CAREER PLANNING AND DEVELOPMENT

-- CLIENT SERVICE CULTURE CLIENT SERVICE CULTURE

-- MANAGEMENT OF DIVERSITY MANAGEMENT OF DIVERSITY

- - REPRESENTIVITY OF BLACK PEOPLE AND REPRESENTIVITY OF BLACK PEOPLE AND

WOMEN IN ALL LEVELS OF THE ORGANISATIONWOMEN IN ALL LEVELS OF THE ORGANISATION

HR PRIORITIESHR PRIORITIES

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PORTFOLIO COMMITTEE ON TRANSPORT

STAFF COMPLEMENTSTAFF COMPLEMENTRACE / GENDER GROUPINGRACE / GENDER GROUPING

NOV '96

84%

16%

WM

WF

BM

BF

APR '00

50%

19%

24%

7%

WM

WF

BM

BF

FEB '03

42%

18%

27%

13%

WM

WF

BM

BF

TARGET DEC '03

37%

17%

28%

18%

WM

WF

BM

BF

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OPERATIONAL

ENHANCEMENTS

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PROGRESS - SOUTH AFRICAPROGRESS - SOUTH AFRICA

COMPLETE

FULL SSR - COVERAGE WITH REDUNDANCY

FULL VHF - COVERAGE FROM 1500FT

RNAV ON MAIN ROUTES

CHANGED FROM 6 FIR’S TO 3

ADS/CPDLC - IN OCEANIC

RANDOM OPERATIONS

ELECTRONIC FLIGHT PLANS/NOTAMS

CENTRAL AIRSPACE MANAGEMENT UNIT - PHASE I

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PROGRESS - SOUTH AFRICAPROGRESS - SOUTH AFRICA

IN PROGRESS (2003)

• AUTOMATED SEQUENCING (TERMINAL AREAS)

• ELECTRONIC HANDOVER

• ADS/SSR INTEGRATION

• REDUCED SEPARATION - 10 MIN TO 10 MILES

• CENTRAL AIRSPACE MANAGEMENT UNIT -

PHASE II

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CLIENT BENEFIT ANALYSIS - CLIENT BENEFIT ANALYSIS - APRIL 2004 FOLLOWING APRIL 2004 FOLLOWING

INVESTMENTINVESTMENT

RM/annum

HOLDING DELAY REDUCTION

- CENTRAL AIRSPACE MANAGEMENT UNIT

- TRACK DEFINITION

- AUTOMATED SEQUENCY R 6M

REDUCED TRACK - FLEXIBLE USE OF AIRSPACE R12M

RADAR - OPTIMUM FLIGHT LEVELS R40M

OCEANIC RANDOM ROUTING R12M

RNAV ROUTES - SHORTER ROUTES R22M

FAJS CAPACITY - 20% INCREASE R 2M

TOTAL R94M

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AVIATION TRAINING

ACADEMY

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SERVICES PROVIDED

• FULL RANGE ATS TRAINING

• TECHNICAL SUPPORT TRAINING (SYSTEMS/CONCEPTS)

• AIRPORTS TRAINING

• AVIATION ENGLISH TRAINING

• CONSULTANCY SERVICES

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ROLE IN SADC

• HARMONISATION OF TRAINING STANDARDS

- ACTIVE WORK GROUP MEMBERS

- UPLIFTMENT TO POTENTIAL

- ALL ICAO BASED

• TRAINING CENTER EVALUATION

- REQUIRED STANDARDS

- CAA RECOGNITION

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INTERNATIONAL CO-OPERATION

• CO-OPERATION WITH THE FAA (ATS TRAINING)

• FORMAL AGREEMENT WITH IATA/ATDI

• TRAINAIR MEMBERSHIP

• ICAO (AVSEC BASIC AUDITORS COURSE)

• ISO 9001

• CO-OPERATION IN SADC

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EXTERNAL CLIENTBASE

• ALL 14 SADC STATES

• 16 OTHER AFRICAN STATES

• VARIOUS SECURITY COMPANIES IN SA

• PROVINCES

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ATNS IN THE REGION

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Achievements 2001-2002

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4 STRATEGIES

• COMMUNICATION NETWORK FOR

AFRICA

• INFRASTRUCTURE RENEWAL

• REGIONAL SERVICE PROVISION

- UPPER AIRSPACE CONTROL CENTRE

(UACC)

•TRAINING

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33

34

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36Progress: VSAT

Nafisat

• ATNS invited by ICAO to the workgroup meeting 4-5th February

• ATNS currently evaluating the viability of the “Cape to Cairo” network.

• Meeting scheduled for 24-26 February between ICAO, MD and GM: BD to discuss future of Nafisat and ATNS/IATA relationship

Middle East VSAT

• 2nd Taskforce meeting scheduled held 3 February 2003. Meeting went well.

• High level meeting scheduled for 10-11 March with MD, GM:BD and Mr Zerhouni, ICAO Cairo

• Site visits planned 26 Mar – 1 Apr 2003

• Anticipated completion end April 2003

Afisnet

• Interconnectivity achieved Oct 2002

• AFTN JHB - Dakar

• ATS/DS Antanorivo to Beira and Antannanorivo to Dar es Salaam

• CAFSAT testing

13 -30 Jan 03

SADC

• Current network operating well overall servicability above 90%. Fortnightly follow –up with all clients

• Finalising inclusion of Burundi and Rwanda

• Proposed new network – 3rd Taskforce meeting scheduled for February 03. Board presentation March 03

37Progress: Towards Regional Service Provision

East African UACC

• Feasibility study underway being funded by European

bank

• Kenya, Tanzania, Uganda, Rwanda and Burundi to participate

SADC UACC

• UACC Steering Committee 6 November 2003. Contract referred for the additional work referred back to ISI and USTDA. Still no reply from ISI.

• Next meeting to take place in Mozambique

• SA Hosting proposal development on hold

• Best practice study planned for 2003/2004

• Verification of UACC impact on ATNS Study postponed to 2003/2004 financial year