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5 questions: Acting Acsa CEO on transformation, governance and key business challenges

Dec 30 2018 15:21
Carin Smith

Airports Company South Africa (Acsa) facilitates the air travel of about 41 million passengers a year in and out of the nine airports it operates in SA.

In June this year, Parliament heard that, over the past three years, four board members quit Acsa, and two indicated they resigned over what they deemed to be a lack of corporate governance at the entity

At the time, Minister of Transport Blade Nzimande issued a statement indicating that he was giving his "full attention" to restore good corporate governance and financial prudence at Acsa.

At the end of November, the board of Acsa appointed Bongiwe Mbomvu as acting CEO, with the mandate "to ensure stability and effective ongoing operations of the company".

Mbomvu spoke to Fin24 about how she sees her task ahead at Acsa.

Fin24: Tell us about transformation at Acsa

Bongiwe Mbomvu (BM): As a state-owned company, we are proud of our ability to deliver on dual objectives: to be a profitable business and to contribute tangibly to transformation and socio-economic development.

We have made a profit for all but one of the past 25 years and have never required state support or guarantees for our loans. In the last financial year, we reported a profit of R800m even though the tariffs we charge had been reduced by 35.5%.

In terms of transformation, we know we can do more, but we are still proud of how far we have come.

In the last financial year, we reported that our black employees represent 93.3% of our staff complement. Black-owned businesses now share 61% of our operational and development spend, and 59% of our commercial revenue.

Fin24: What are the current challenges for Acsa and how do you plan to deal with these?

BM: Our priority always is providing a safe and secure environment for passengers and airlines. This is a constant business challenge.

Airport operations are complex. We manage volumes, variability, variety and visibility in a live environment where precision and predictability of service are the basis of our existence.

Coordination and collaboration are critical because around the world only a fraction of the employees work directly for the airport.

At OR Tambo International Airport, for example, about 38 000 people are employed in and around the airport. But of these only about 1 400 are directly employed by us.

Ensuring that operations on both [the] land side and air side are coordinated, requires precise synchronisation that is built on mutual understanding of each person's role.

Our key business challenge is to continue expanding the non-aeronautical part of our revenue. This non-aeronautical revenue comes from activities such as retail, car hire, property management and consulting services provided outside of South Africa.

Growth in non-aeronautical revenue in the short-term limits the impact of reduced regulated tariffs for aircraft landing, aircraft parking and passenger service charges.

In the longer term, the better we are at growing non-regulated sources of revenue, the lower will be our requests for increases in tariffs.

And then, over the next few years, we will invest R21bn in new and upgraded infrastructure at our airports. As always, the business challenge will be to ensure that the work is delivered on time and on budget.

Fin24: What opportunities do you see for Acsa?

BM: The long-term opportunity in SA is to be part of the growth of air travel. Domestic travel is increasingly affordable, and we find every peak holiday season that a large proportion of passengers are first-time flyers. Our role is to ensure that we have the infrastructure that can support growth over decades.

Outside of SA, we see opportunities in selling our technical services offering to airports in African countries and beyond. We recently celebrated the official opening of Terminal 3 at Ghana's Kotoka International Airport where we provided a range of project management and operational readiness services.

Beyond the Ghana project, we have secured engagements in Zambia and Liberia. Our Business Development team is active in several African markets and we anticipate more good news in 2019.

Fin24: What is your motto in life and how do you handle a challenge?

BM: We must do things in the right way and for the right reasons.

Every challenge raises the opportunity to take the path of least resistance. But for me, handling a challenge means that one must take the issue head-on and deal with it with determination to do the right thing for the right reasons.

Fin24: What is your message to South Africans?

BM: We have a long way to go, but looking at how far we've come should give all of us confidence that we can overcome our nation's challenges.

Let us not focus too much on our mistakes - learn from them. The future is what we need to worry about as we have an opportunity to make it better.

acsa  |  airlines  |  aviation
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