GROUP OVERVIEW

Airports Company South Africa SOC Ltd (the Group) owns and operates South Africa’s nine principal airports, including three international gateways; O.R. Tambo, Cape Town and King Shaka International Airports. We also participate in equity investments abroad and provide technical advisory and consultancy services to airports.

The South African Government is a 74.6% majority shareholder in our Company. We align ourselves with the nation’s aspirations of transformation, sustainable growth and value creation. While providing world-class secure infrastructure for airlines to transport people and goods, we recognise that we have a key role in the national development plan; in facilitating economic growth, job creation and accelerating transformation towards inclusive economic participation.

Our revenue is generated from aeronautical, nonaeronautical and non-core sources. Aeronautical revenue is derived from government-regulated charges or tariffs paid by airlines. This includes fees for aircraft landing, aircraft parking and passenger service charges. Non-aeronautical income is derived from multiple sources that include retail sales, concession fees, property leases, parking fees, hotel operations and advertising. Non-core revenue is derived from equity investments abroad and technical advisory and consultancy services to airports.

While the impact of the COVID-19 pandemic on the aviation industry globally has been devastating and the path to recovery will be long, we are confident the foundation of a solid balance sheet, a strong reputation and enduring competitive advantages will stand us in good stead.

Vision

To be the most sought-after partner in the world for the provision of airport management solutions by 2030.

Mission

To acquire, develop and manage world-class airports and related businesses for the benefit of all our stakeholders and the socio-economic development of South Africa.

Values

We define our values through the acronym PRIDE: Passion – Results – Integrity – Diversity – Excellence.

Value proposition

Connecting people to people, places, dreams and opportunities.

OUR MANDATE

In line with the Airports Company Act, No. 44 of 1993, as amended, the Company is mandated to undertake the acquisition, establishment, development, provision, maintenance, management, operation and control of any airport, any part of any airport, or any facility or service at any airport normally related to an airport function.

OUR SHAREHOLDING

Airports Company South Africa is a State-owned company, and schedule 2 public entity in terms of the PFMA that is legally autonomous and operates within the ambit of the Companies Act. Our diverse shareholders include the South African Government, through the Department of Transport (DoT), as our major shareholder, the Public Investment Corporation (PIC), five empowerment investors and a staff share incentive scheme. 

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  • South African Government

    is our primary shareholder.

  • Public Investment Corporation

    The PIC shareholding is held through ADR International Airports SA (Pty) Ltd, a wholly owned subsidiary of PIC.

  • Staff share incentive scheme

    – Litigation is being finalised

  • Empowerment investors:

    • 1.2% G10 Investments (Pty) Ltd
    • 1.4% Oppressed ASCA Minority 1
    • 0.4% Pybus Thirty FourInvestment (Pty) Ltd
    • 0.8% Telle Investments (Pty) Ltd
    • 0.4% Upfront Investments 64 (Pty) Ltd

OUR GEOGRAPHICAL FOOTPRINT

In South Africa, our footprint includes airpor ts in nine key business and tourism hubs across the countr y. Our global presence cha nged during the year, with the sale of our shares in Mumbai International Airport Private Limited concluded on 5 Februa ry 2021. T h e sale of our stake of the Guarulhos International Airport in São Paulo, Brazil, is still under consideration.

Our sister air port agreements with Munich Airport Group, Germany and the Airpor ts of Thailand remain active.

OUR JOURNEY THROUGH THE COVID 19 PANDEMIC

The impact on air travel

Read here for further details on the external environment. The aviation industry has been one of the sectors most affected by the pandemic as it triggered a complete market collapse at the start of the pandemic. Although there has been a gradual recovery in the market, it is tenuous and uncertain, a situation that will continue until wide-scale global vaccination has been achieved. The collapse in air travel demand has been driven largely by public policy as governments worldwide implemented travel bans and border closures as part of containment measures to curtail the spread of the virus. Air travel, by its nature, involves people from the four corners of the earth coming together in close proximity and with multiple touch points. These factors not only represent inherent risks, but severely impact potential passenger’s sentiment towards air travel.

Ensuring the health and safety of our stakeholders

Read here for further details on our safety.

As the COVID-19 pandemic unfolded, our airport operations faced an unprecedented situation, fraught with immense and multi-faceted challenges. Our first priority was to apply stringent measures to protect all our staff and airport users. Once we started operating again, we had to adapt our procedures to meet new regulations and an unfamiliar, constantly changing operational landscape. We implemented rigorous health and safety protocols at all our airports to detect, manage and prevent the spread of COVID-19. Our airports all comply with South African and international regulations and protocols. Each airport is registered on the Airport Council International (ACI) Airport Health Accreditation Programme. We work closely with our airport stakeholder s to ensure they comply with our health and safet y requirements.

Recovering and sustaining our business

Read here for further details on our strategy.

Our Board, executive and senior management have shown fortitude and agilit y in addressing the financial and oper ational hurdles that we faced following a total dislocation of our market. Our business came to a complete halt, a situation previously unimaginable. Following the three months of hard lockdown, new challenges continue to emerge and traffic remains a fraction of normal levels as a result of the firs t, second wave and the emerging third wave of infection.

By the end of the first quar ter of the financial year, the full extent of the COVID-19 impac t on our industry began to emerge. It was apparent that we would not be able to meet the commitment s set out in the three-year corporate plan, which was submit ted to the DoT in February 2020 and later tabled in Parliament. The resultant drop in traf fic through our airpor ts severely impacted our aeronautical revenue, threatening our liquidity and long-ter m financial sustainability.

Critical to our achievements during the year wa s the assessment of the status quo and the development of our Recover and Sustain Strateg y that was shared with the Board, the Minister of Transport, the Portfolio Committee on Transport and rating agencies as well as investors and lenders.  A revised financial plan, based on the assumptions of the internationally predicted medium-term

 reduction in air passenger traffic underpins our Recover and Sustain Strategy. Our responses include substantial cuts in operational expenditure and limiting capital expenditure through rescheduling capital programmes initiated in response to pre -COVID -19 predicted traffic increases.

Financial stability

Read here for further details on our financial plans.

We adopted a scenario planning approach to inform responses to firstly address the liquidity crisis then financial sustainability over the long term. To alleviate short-term liquidity pressures, the Company increased our short term banking facilities, effectively managed our working capital and introduced operational expenditure and capital expenditure cuts.

Stakeholder engagement

Read here for a full stakeholder analysis.

Our key stakeholders have always been inseparable from our business. As an airport company we operate within a complex ecosystem. From an operational perspective, our airports are a central junction through which passengers, airlines, the government (represented by the Port Authority), retailers and other service providers all interact and connect. The pandemic is the greatest disruption the aviation industry has ever experienced, resulting in the collapse of direct and indirect aviation-related markets.

As COVID-19 impacted the global economy and our industry in particular, our partnerships with our stakeholders have evolved in a very positive manner. These vital relationships have been cemented and energised as we navigated the unchartered territory that has characterised the past year.

Guided by the stakeholder-inclusive approach demonstrated by our leadership, we have gone to great lengths to support our stakeholders by understanding the challenges and reaching agreements that reflect our belief that we are in this together. In turn, we acknowledge their support as we reviewed and reprioritised our strategy. We have a strong track record of integrating the needs of our stakeholders into our decision-making processes and strive to get their buyin to our strategy. The effective implementation of our stakeholder engagement plan has been a central focus in our engagements this year.