Ms Poppy KhozaDirector of Civil Aviation

South African Civil Aviation Authority

Portfolio Committee on Transport

16 October 2014

1. SACAA Overview2. SACAA Business3. South Africa’s Safety Performance4. Accident and Fatality Statistics5. Industry Transformation 6. SACAA Transformation7. Revenue Sources8. Financial Sustainability 9. AG Audited Organisational Performance10. Audit Trends11. Organizational Challenges and Interventions

CONTENTS

Objects of Civil Aviation Authority Act No 13, 2009a)Control and regulate civil aviation safety and securityb)Oversee the implementation and compliance with the National Aviation Security Programc)Oversee the functioning and development of the civil aviation industry;d)Promote civil aviation safety and securitye)Develop any regulations that are required in terms of this Act; andf)Monitor and ensure compliance with this Act and the Convention

Mandate (Contemporary Translation) “Regulating the civil aviation industry to ensure security and safety by complying with International Civil Aviation Organisation (ICAO), and taking into consideration the local context.”

SACAA MANDATE

SACAA BUSINESS: Safety Oversight System

• The International Civil Aviation Organisation (ICAO) completed an ICAO Validation Mission ICVM in July 2013 based on the 2007 audit, with no Significant Safety Concerns (SSC) raised.

• At present SACAA has submitted about 50% of compliance evidence on the current ICAO Corrective Action Plan (CAP) to ICAO. More work on regulations continues.

• Please note that AIG was not audited and we await ICAO to notify us on the planned date.

SACAA BUSINESS: Security Oversight System

•Performance on ICAO 8 Critical Elements continues to gain traction.

•Validated by the June 2013 US Transport Security Administration audit, a positive outcome was achieved after Delta Airlines and South African Airways were audited.

•This position was recently validated in June 2014, with the same positive outcome.

SA’s SAFETY PERFORMANCE

Legend•South Africa •World average.

Note•AIID is yet to be audited, hence the reflected underperformance

Source: ICAO 2013 Audit Report

ACCIDENT and FATALITY STATISTICS

• General accident statistics have been on the decline since 2008, however 2013 was a concern, hence the development of the Cross Functional Accident Reduction Plan (CFARP). This amongst others have had a positive impact for the six months ending June 2014, with 19 fatalities compared to 23

the previous year.

Source: SACAA 2014 Annual Report

INDUSTRY TRANSFORMATION

Africans, Indians and Coloured’s constitute 8% excluding cabin crew. There are efforts underway to correct the situation under the guidance of the Ministry.

South African Civil Aviation Authority – Demographics by Trade

Licensing AreaSouth African

Foreign Nationals

Foreign and Local

NationalsAfrican Coloured White Indian Other Total

Student Pilot(Active Licenses 331 56 2085 79 291 2,842 596 3,438Private Pilot – Aeroplane 176 47 5495 82 146 5,946 1,331 7,277Private Pilot – Helicopter 40 7 1245 17 7 1,316 196 1,512Commercial Pilot – Aeroplane 114 23 2628 48 226 3,039 1,655 4,694Commercial Pilot – Helicopter 32 13 789 7 4 845 168 1,013Airline Transport - Aeroplane 76 33 3019 50 10 3,188 285 3,473Airline Transport – Helicopter 2 2 268 0 1 273 26 299Total Pilots 771 181 15,529 283 685 17,449 4,257 21,706 4% 1% 89% 2% 4% 100% Aircraft Maintenance Engineers 193 25 1636 36 17 1,907 182 2,089 10% 1% 86% 2% 1% 100% 1Hot Air Balloon 0 29 0 1 30 4 34Flight Engineers 0 24 0 0 24 0 24Grand Total – Excluding Cabin Crew

964 206 17,218 319 703 19,410 4,443 23,853

5% 1% 89% 2% 4% 100%

SACAA TRANSFORMATION• We are below target

due to a slow down in the recruitment of personnel pending organisational structure review

• As we fill vacancies our targets will improve

ORGANISATIONAL PERFORMANCE

2013/14

SACAA Performance Achievement 2013/14 Achieved Not achieved

15 out of a revised 16 deliverables were met Performance Notes1 Board-approved stakeholder management plan

2 100 schools planned in advance and approved by Exco

3 Support the hosting of ICAD in line with DoT approved terms of reference.

4 Draft Act amendments submitted to DoT N/A Act amendment deliverable moved to DoT

5 Independent assessment of ICAO reediness and development of 2013 Corrective Action Plan (CAP) and its implementation

6 Industry consultations on UAV regulations

7 5% quarterly variance reported according to DCA-approved MSP on recipients registered as at 31 March 2013

8 Develop promotion plan to reduce airspace infringements by 5% year on year, based on aircraft register %

9 Take enforcement action for regulatory non compliance

10 Develop and implement cross functional division plan to reduce total accidents

11 Hold a targeted Annual Safety seminar that addresses reported incidents and accidents

12 Implement BBBEE plan and achieve level 5

13 Board approved AEP structure Implemented

14 Board approved all-encompassing HR strategy with concrete timelines implemented

Only 78% of the targets were met

15 EBS tender approved by Board, Implementation plan approved by Exco

16 Board approved updated financial model

17 Implement Exco approved Divisional Operational Plans

There were 17 performance deliverables for the year ending March 2014, and a revised 15 out of 16 deliverables were achieved, translating to 94% performance

FINANCIAL PERFORMANCE

2013/14

REVENUE SOURCES

• The Passenger Safety Charge (PSC) constitutes 70% of all income.

• This is currently levied at R16.39 per departing passenger from local airports according to a set criteria

FINANCIAL SUSTAINABILITY

• Tapering growth in passenger numbers compared to the SACAA budgeted 1.8% increase

• Experienced a delay in the approval of the Passenger Safety Charge

• The above scenario has had a negative impact on organisational Revenue as at June 2014 of R15.2 million.

• The PSC has since been approved & adjusted to R16.39 with claw back from the 2012/2013 overcollection

Source: SACAA 2014 Annual Report

Pass

enge

r Num

bers

‘000

STATEMENT OF FINANCIAL PERFORMANCE

Actual March 2013

Actual March 2014

Budget March 2015

Total Revenue 407,611,800 100% 416,131,824 100% 468,727,965 100%

User Fees 65,637,223 16.1% 70,349,907 16.9% 77,736,820 16.6%

Safety Charges 294,554,007 72.3% 291,688,968 70.1% 341,060,627 72.8%

Fuel Levy 17,575,566 4.3% 19,539,690 4.7% 20,803,563 4.4%

NDoT 16,025,000 3.9% 16,900,750 4.1% 17,916,000 3.8%

Other Income 13,820,005 3.4% 17,652,509 4.2% 11,210,955 2.4%

Total Expenses 384,719,287 100% 407,083,758 100% 468,688,563 100%

Staff Related Costs 266,652,621 69.3% 299,516,372 73.6% 346,182,004 74%

Non Staff Costs 118,066,666 30.7% 107,567,386 26.4% 121,815,117 26%

Surplus 22,892,514 9,048,067 39,403

With the approved R16.39 Passenger Safety Charge (PSC) increase, SACAA is forecasting a break-even for the year ending March 2015.

STATEMENT OF FINANCIAL POSITION Actual March

2013R’000

Actual March 2014R’000

Budget March 2015R’000

Assets Non – Current Assets 41,213 49,163 121,257

Property Plant and Equipment 36,104 44,340 66,788Intangible Assets 5,109 4,823 54,469

Current Assets 228,865 221,824 127,489Trade and other Receivables 39,038 36,485 58,405Bank Balances and Cash 189,827 185,339 69,083

Total Assets 270,078 270,987 248,746

Net Assets and Liabilities

Capital and Reserves 128,465 138,323 138,368Non Distributable Reserves 54,635 55,445 55,445Accumulated Funds 73,830 82,878 82,923

Current Liabilities 141,613 132,664 110,378Trade and Other Payables 49,637 41,417 51,200Provisions 84,833 86,585 54,428Operating Lease Liabilities 7,143 4,662 4,750

Total Net Assets and Liabilities 270,078 270,987 248,746

The Statement of Financial Position highlights a decrease in cash and a corresponding increase in Property Plant & Equipment and Intangible Assets, due to the implementation of the EBS project.

AUDIT TRENDS

• Consistent decline in audit findings over the past 5 years, • 2013/14 will be the second year in a row the organisation receives the

Auditor General Clean Audit Award.

Organisational:•AG Clean Audit (award received on 8 October 2014 – 2 years in succession)•94% overall organisational performance (audited)•EBS Tender – efficiencies•Executive AppointmentsTechnical:•Upgrading of the exam system•Successful ICVM Audit•Successful TSA Audit•CFARP•US TSA & EU ACC3 - Recognition•Successful hosting of Safety Seminar•Vice Chairman of ICAO – 2nd year•MSP (95%)

ACHIEVEMENTS

Co-operation & Regional Assistance:• Partnership with Universities on Avmed• Regional Assistance (Malawi, Botswana, etc.)• Preparation of Avmed African Aerospace Medicine

Conference

Transformation:• Bursary Awards – PDIs • BBBEE Level 2 (from 4 to 2in two years)• Career Awareness (JAAP 193 HDI Schools Visited in nine

Provinces)

ACHIEVEMENTS Cont…

ORGANISATIONAL CHALLENGES Stagnation of passenger numbers – impact on revenue Establishment of the independence of the Accident and Incident investigation

Division (AIID) (International Civil Aviation Organisation - ICAO Audit) Un-manned Aerial Systems (UAS) Civil Aviation Act not Aligned to Public Finance and Management Act (PFMA) -

pending Silo Systems and manual processes Transformation of Industry

INTERVENTIONS

Diversification and maximisation of existing revenue streams AIID Memorandum of Understanding (MOU) signed with

Department of Transport, engagement on cost implications Development of Regulations in progress - March 2015 DoT to fast-track the amendment of the Act Organisational Design and Enterprise Business System (EBS)

roll-out to address silos. Development of an Industry-wide Transformation Strategy

Thank You