Airservices is Australia's air navigation service provider - we provide air traffic control, aviation rescue and fire fighting and air navigation services.

Annual Report 2017-18: 03 Annual performance statement

This annual performance statement is prepared in line with paragraph 39(1)(a) of the Public Governance, Performance and Accountability Act 2013 (Cth) (PGPA Act) for the 2017–18 financial year. It accurately presents Airservices performance in accordance with section 39(2) of the Act.

Our purpose

Our purpose is to provide safe, secure, efficient and environmentally responsible air navigation and aviation rescue fire fighting services that are valued by the aviation industry.

Performance outcomes

This section provides our results and highlights major achievements in 2017–18 against five performance criteria—safety, business operations efficiency, organisational capacity, industry outcomes and financial stewardship. These align to the strategic performance outcomes in the 2017–18 Corporate Plan.

It also provides an analysis of our overall performance against our key performance indicators (KPIs) over the financial year, and demonstrates how we are fulfilling our purpose.

A table reporting on the enterprise initiatives set out in our 2017–18 Corporate Plan is also included in this section.

Performance criterion—Safety

The safety of Australia’s air navigation system is our most important consideration. We are committed to enhancing our safety performance, and we continue to improve our operations to strengthen our safety performance, and optimise advances in technology.

Results

KPI

2015–16 2016–17

2017–18

Result Result Target Result
Significant Attributable Safety Occurrences—Air Navigation Services

Any loss of separation or runway incursion where the Risk Assessment Tool score is Category A.

Source: Page 25 of the 2017–18 Corporate Plan

0

0 0

0

Significant Attributable Safety Occurrences—Aviation Rescue Fire Fighting Services

Any aircraft incident on a runway in which the response did not meet the regulated response time of three minutes.

Source: Page 25 of the 2017–18 Corporate Plan

1

0 0

0

Lost time injury frequency rate (LTIFR)

A lost time injury is an occurrence that resulted in time lost from work of one day shift or more, permanent disability or fatality. The rate measures the number of lost time injuries per million hours worked.

Source: Page 25 of the 2017–18 Corporate Plan

5.8

5.6 3.5

4.6

Analysis

We achieved the key safety target for our air navigation and aviation rescue fire fighting services.

The effective delivery of our services depends on our people. We achieved an 18 per cent improvement in our LTIFR by focusing on early reporting and intervention, and aiding staff in returning to duties. While this is a significant improvement, we did not achieve our target, and we will focus on further improvement in 2018–19.

Achievements

Optimising our use of technology helps us make Australian skies safer for our customers. During 2017–18, we:

  • delivered a satellite-based precision approach capability in Melbourne with a ground-based augmentation system, assisting the industry with fewer weather disruptions, more efficient descents, and improved airport capacity
  • established two automated dependent surveillance broadcast (ADS-B) receivers in the Browse Basin in Western Australia to increase the safety of operations supporting the local gas and oil industry
  • finalised the rollout plan for additional ADS-B receivers to improve surveillance at 11 regional airports
  • conducted a trial of satellite-based augmentation system technology, guiding aircraft using advanced satellite positioning, and demonstrating the safety and efficiency benefits of precision approaches at regional aerodromes
  • activated three additional sites on our weather camera portal to provide pilots with real-time access to information on weather conditions. The portal now monitors 17 aerodromes across the country.

Industry collaboration also plays an important role in ensuring the safety of Australia’s airspace. We:

  • worked with regional and general aviation airports to boost their emergency management and planning (see case study—Aerodrome Emergency Plans)
  • supported our neighbours, Indonesia and Papua New Guinea, in improving their internal capabilities and service resilience, to enhance air safety in the region.

Case study


Aerodrome emergency plans

Enhancing safety through collaboration

During 2017–18, we demonstrated our commitment to improving aviation safety through industry collaboration and leadership by working with regional airports to enhance their local emergency response arrangements in the absence of fire fighting services.

We identified a number of regional aerodromes, including major regional hubs and busy general aviation airports, where a dedicated aviation rescue fire fighting service is not currently provided, and reached out to assist with aviation emergency planning.

Our experienced fire fighters and officers assisted with reviewing airport emergency plans, ensuring roles and responsibilities are clear, and improving methods for testing capability and capacity. We also helped with emergency exercise design, exploring ways to test individual components of emergency plans and working with other key agencies identified in these emergency plans.

In applying our own ARFFS capability and experience, the training and expertise provided by our staff has enhanced emergency planning and response arrangements, positively contributed to our industry through strengthening relationships, and has given our highly trained staff broader opportunities to contribute to their communities.

Performance criterion—Business Operations Efficiency

Our aviation industry is dynamic—rapidly adopting new technology and innovating to provide more efficient aviation services to the public. Airservices must continue to evolve with it. During the year, we introduced technology to make our business and operations more efficient and deliver better services to our customers.

Results

KPI

2015–16 2016–17

2017–18

Result Result Target Result
Productivity

The total operating cost per instrument flight rules (IFR) flight hour ($/hour)

Source: Page 26 of the 2017–18 Corporate Plan

$405

$367 Downward trend in real terms

$325

Analysis

During 2017–18, we serviced more traffic (5 per cent growth in flight hours) while continuing to reduce our underlying operating cost base, delivering an 11 per cent increase in productivity.

Achievements

Infrastructure investment improves service quality for our customers while increasing our operational efficiency. Our major achievements for the year included:

  • consolidating the Adelaide Terminal Control Unit to Melbourne
  • installing the Integrated Tower Automation Suite (INTAS) into the Brisbane air traffic control tower
  • signing OneSKY contracts and supporting agreements that will harmonise civil and military air traffic control in Australia
  • commissioning the OneSKY equipment rooms.

During the year, we introduced smart technology and changed our work processes, including:

  • transitioning to infrastructure as a service (IAAS) to reduce information communications technology (ICT) costs while increasing quality, availability, flexibility and security (see case study—Transitioning to managed services and a secure cloud)
  • introducing an asset management framework that has significantly improved the governance and management of our investment program
  • introducing a preventative maintenance optimisation program for fire vehicle maintenance that minimises vehicle downtime and reduces operating costs by $1 million
  • trialling the use of drones to inspect our large structural assets in remote locations, reducing the health and safety risk to our people while increasing the availability of skilled maintenance staff.

Case study


Transitioning to managed services and a secure cloud

Building a sustainable organisation for the future

To support the delivery of value through service excellence and innovation, we have changed the way we provide information technology services, introducing more agility via a secure, fully managed service with redundancy.

In 2017, following a competitive procurement process, Airservices engaged ASG Group as its IAAS partner to deliver our corporate information technology services as a managed service. It provides these services via Vault Cloud, a platform certified by the Australian Signals Directorate (ASD).

In early 2018, Airservices started moving to the new model by identifying all corporate systems—including architecture, system reliances and capacity requirements—to ensure that the new service would meet our requirements. Detailed planning, testing and trial runs were undertaken over several months to ensure that people, processes and technology were ready for the transition.

The transition is largely complete, with all systems previously hosted in our Canberra offices relocated to both the Canberra Data Centre and the Vault Cloud platform. The full transition of systems to the cloud will be completed by the end of 2018.

It is the largest move to the cloud in Australian Government history and demonstrates the maturity of ASD-approved, secure, hosted cloud platforms.

The transition to this new service delivery model provides us with a number of benefits, including a reduction in our overall information technology operating costs, improved service quality and availability, increased service flexibility and enhanced information security.

Performance criterion—Organisational Capacity

Building a diverse and engaged workforce is critical to delivering the expectations set by our customers. As the industry evolves, the capability of our people is fundamental to delivering our services effectively and efficiently. During the year, we worked to ensure that we had the culture, strategy and processes in place to deliver sustainable high performance.

Results

KPI

2015–16 2016–17 2017–18
Result Result Target Result
People engagement survey—values focused

Expressed as a percentage of satisfaction and specific values-related results.

Source: Page 26 of the 2017–18 Corporate Plan

68% 74% 77% 73%
Diversity and inclusion index

Expressed as a percentage of the extent to which employees feel that the work environment is inclusive of all employees and supports diversity.

Source: Page 26 of the 2017–18 Corporate Plan

58% 68% 70% 62%

Analysis

Our people engagement result was relatively stable compared to 2016–17, but did not achieve our target. Our diversity and inclusion index fell from 2016–17.

Building a more inclusive workplace will be a key focus in 2018–19. We will achieve this with the help of our diversity action plan, which will promote inclusiveness, wellbeing and performance in the workplace.

Achievements

We are a diverse and inclusive workplace with opportunities for development and growth, and rewarding careers in the aviation industry. In 2017–18, we:

  • refreshed our corporate values to reflect the organisation that we are today and highlight what is important to our people
  • delivered the Airservices People Strategy (2017–2025), which articulates our workforce drivers, issues, risks and strategies
  • reformed our Diversity and Inclusion Council, making it a mechanism for driving enterprise initiatives to build a genuinely inclusive workforce
  • developed our leadership capability via coaching, assessment workshops and enterprise leadership forums
  • grew our Indigenous workforce (one quarter of our aviation rescue fire fighter graduates in 2018 identify as Indigenous), including members of our Indigenous trainee program.

Case study


Responding to our customers

It is imperative that our organisation and our people have the capacity and agility to understand and respond to our customers’ needs to create value for all airspace users, ensuring that our service delivery is not an operational or economic impediment to the growth of the aviation industry.

The organisational reforms Accelerate positioned us well for the future. In 2017–18, we further evolved our focus from internal efficiency to industry contribution—to what our customers value and expect, to our operating environment and the challenges and opportunities of technology and trends in aviation and air safety globally.

This was the catalyst for establishing our Customer Service Enhancement (CSE) group, which is focused on ensuring that we have a more customer-centric approach to our decision making to drive the delivery of customer benefits.

In allowing our operations to focus on continued safe and efficient delivery of our core services, CSE drives our service enhancement activities to a defined value proposition, articulating the benefits to our people and ensuring we deliver tangible benefits to our customers.

This includes the delivery of the most modern and advanced air traffic management platform in the world—the civil and military air traffic management system (CMATS). For our customers and airspace users, CMATS will offer more access to efficient routes, enabling them to spend less time in the air, saving fuel and reducing the environmental impact of air travel. For the Australian economy, the benefits of CMATS are more than $1 billion.

Performance criterion—Industry Outcomes

Our role in Australian aviation is unique. As the provider of air navigation services, we are well positioned to work effectively with industry, other government agencies and our regional neighbours, to enhance cooperation and improve aviation safety and efficiency for our nation. During the year, we engaged with our customers to understand their needs and priorities for service improvement. This included a focus on implementing initiatives to improve operational efficiency for aircraft, efficient use of airspace and minimising traffic delays.

Results

KPI

2015–16 2016–17 2017–18
Result Result Target Result
Arrival airborne delay
(high‑volume operations)
The median (and 75th percentile) excess time incurred during the arrival airborne phase of flight in reference to the estimated time of arrival for high‑volume operations. Brisbane, Melbourne, Perth and Sydney are defined as high-volume operating environments.Source: Page 26 of the 2017–18 Corporate Plan
Median
(minutes)
0.4 0.6 0.6 0.6
75th percentile
(minutes)
3.1 3.5 3.5 3.5
Industry advocacy score

Measures our customer advocacy as determined by the net promoter score.

Source: Page 26 of the 2017–18 Corporate Plan

n/a -39 -39 -36

Analysis

In 2017–18, we met our target for arrival airborne delay against a backdrop of growing traffic by working closely with industry to continuously review data and identify opportunities for improvement.

The 2018 industry advocacy survey results demonstrate a modest improvement in our weighted average score from -39 last year to -36, with our customers acknowledging our action to shift to a more customer-focused organisation.

Achievements

In 2017–18, we focused on improving the quality of engagement with our customers and industry partners to deliver the benefits of our investment. Our key achievements include:

  • finalising the commercial arrangements for providing A-CDM technology (see case study—Airport Collaborative Decision Making)
  • implementing new standard instrument arrival and departure flight procedures at three airports, improving the safety and efficiency of our operations into the aerodrome
  • developing a concept of operations for digital aerodrome services that will use technology to provide more agile and efficient service delivery options
  • finalised the implementation plan for introducing long‑range air traffic flow management (LR ATFM), which will better integrate international aircraft into our network management and increase airport efficiency.

Case study


Airport Collaborative Decision Making (A-CDM)

Harmonising air traffic management

As the aviation industry grows, we have continued to invest in technology that allows us to provide valued services to our customers. A-CDM is one such technology-based, whole-of-industry initiative where we collaborated with airports and airlines.

This state-of-the-art information-sharing platform will instantly synchronise data for air traffic controllers and operations staff at airports. This will harmonise the way airports, aircraft operators, ground-handling organisations and air traffic controllers work, and facilitate collaborative decision making.

A-CDM will provide a shared picture of aircraft movements in arrival, turnaround and departure phases. It will improve operational efficiencies and aircraft predictability, and save the aviation industry more than $52 million over the next decade.

Airservices is the world’s first air navigation service provider to lead a multi-location A-CDM implementation. We have taken a lead role in implementing the system for our customers, who requested a single solution to harmonise operations across all major airports.

Performance criterion—Financial Stewardship

We are responsible for understanding and managing our financial impact on our customers, the Australian Government and the economy. This responsibility underpins our ability to achieve our purpose. In the face of an ever-changing operating environment, we continue to focus on financial sustainability to give our customers certainty about the way we manage our business.

KPI 2015–16 2016–17 2017–18
Result Result Target Result
Net Profit After Tax

Net profit after tax

Source: Page 25 of the 2017–18 Corporate Plan

-$127.3 million $34.0 million $59.2 million $74.5 million
Return on assets (RoA)

Airservices annual earnings as a percentage of assets

Source: Page 25 of the 2017–18 Corporate Plan

-6.4% 5.6% 6.5% 8.5%

Analysis

In 2017–18, we exceeded our financial performance targets and delivered a significant return on assets.

Achievements

NPAT is $74.5 million ($15.3 million or 25.8% above target), mainly due to a combination of increased international revenue and harvesting savings from our new asset management practices earlier than planned.

RoA continues to remain strong as asset values trend downwards due to lower investment and improved profitability.

We continued to hold prices at 2015 levels in 2017–18. Our increased revenue and effective cost management strategies have allowed us to deliver on our commitment of real price decreases and improved value to our customers.

Our strong financial position enabled us to waive more than $2 million in ongoing annual charges for five not‑for-profit aeromedical operators. We also reiterated our commitment to general aviation by continuing to waive charges for low-volume general aviation operators.

Case study


Promoting a healthy aviation industry

Continuing to support our customers and the community

As Australia’s air navigation services provider, we are responsible for championing a healthy aviation industry in Australia. We take this responsibility seriously and have worked hard to improve our service offering and internal efficiency.

We are focused on delivering and sharing the benefits of being more sustainable and customer‑focused for all Australian airspace users.

In 2017–18, our continued improvements in service delivery and financial stewardship enabled us to keep our prices at 2015 levels while delivering major investments for the industry.

We also offered support to five not-for-profit aeromedical operators by waiving more than $2 million in annual charges. These operators include Angel Flight, CareFlight, LifeFlight, Little Wings and the Royal Flying Doctor Service (RFDS), which provide essential services to Australians in rural and remote communities.

The RFDS has indicated that the savings on annual navigation charges fund the equivalent of 235 patient retrieval flights or 15 extra nurses, or operating its 24‑hour telehealth service. Access to these vital services can mean the difference between life and death for people in remote parts of the country.

In addition, we continue to provide services to 3,000 low-volume general aviation operators at no cost, through our light aircraft charging option.

Report against enterprise initiatives

The following table provides an overview of our performance against the enterprise initiatives outlined in our 2017–18 Corporate Plan. As most of our initiatives are multi-year, the results key shows the status as a summary of the overall result, based on deliverables achieved in 2017–18.
Results key:
Fully met: 100 per cent of deliverables for 2017–18 were achieved
Substantially met: 50–99 per cent of deliverables for 2017–18 were achieved, with some minor exceptions
Partially met: Less than 50 per cent of deliverables for 2017–18 were achieved

 

Initiative Measurement Outcome
1.1 Future Airspace Management

Source: Page 14 of the 2017–18 Corporate Plan

1.
Integrate Adelaide Terminal Control Unit into the Melbourne Centre2.
Finalise the three-year schedule of additional locations for ADS-B3.
Lower Class E services in continental airspace across Australia4.
Trial Class E arrival airspace services at a regional airport

5.
Implement new Standard Instrument Departures (SIDs) and Standard Arrival Routes (STARs) at Hobart, Launceston, Mackay and Rockhampton

6.
Complete remote (virtual) tower concept of operations, with initial pilot location focusing on service continuity and strengthening redundancy

Partially met

Adelaide Terminal Control Unit was successfully integrated into Melbourne on 8 July 2017.

The locations for additional ADS-B sites were approved in February 2018.

A concept of operations for Class E Services was developed in 2017–18. We identified the need for a broader review of future airspace management to take into account changes to technology, airspace users, and airport infrastructure, which will progress in 2018–19.

SIDs and STARs for Rockhampton, Mackay and Hobart were commissioned in 2017. The Hobart SIDs and STARs are being reviewed due to community concern. Due to this, implementation at Launceston did not proceed in 2017–18.

The concept of operations for remote towers was completed.

2.1 Customer-centric services

Source: Page 17 of the 2017–18 Corporate Plan

1.
Install the Integrated Tower Automation System in Brisbane Tower2.
Develop a range of risk mitigation ARFFS service options3.
Initial pilot of a Unicom service at a regional aerodrome
Fully met
2.2 Airport Collaborative Decision Making (A-CDM)

Source: Page 18 of the 2017–18 Corporate Plan

1.
Developing an industry-agreed operating and governance framework for A-CDM capability2. Final investment decision3.
Finalising procurement and commercial arrangements with the successful capability supplier
Fully met
2.3 Long range air traffic flow management (LR ATFM)

Source: Page 19 of the 2017–18 Corporate Plan

1.
Identify a preferred technology partner2.
Scope the introduction of LR ATFM capability for Melbourne
Fully met
3.1 OneSKY

Source: Page 22 of the 2017–18 Corporate Plan

1. OneSKY Equipment Rooms

2.
Installation and commissioning of the new Phase 1 Voice Communication System (VCS)

3.
Begin construction of CMATS Air Traffic Services Centres (ATSC)

4.
Commencement of OneSKY integration into service delivery

Partially met

OneSKY equipment rooms were commissioned.

Installation of the Phase 1 VCS was completed at three of the four sites, with the fourth site scheduled for completion early in 2018–19. Commissioning at all sites is due to occur in 2018–19.

Following a review of requirements for the ATSCs in 2017–18, construction is due to commence in 2018–19.

The transition and integration into service delivery will commence with the commissioning of VCS capability.

3.2 People

Source: Page 23 of the 2017–18 Corporate Plan

1.
Finalisation of whole-of‑enterprise Airservices Workforce Plan 2017–20222.
Refresh of leadership development and whole‑of‑enterprise corporate training3.
Execution of end-to-end leadership succession management process4.
Finalisation of review of recruitment servicing model and processes
Fully met

 


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