parliament of republic of south africa portfolio committee on transport presentation of the

Parliament Of Republic Of South Africa

Portfolio Committee On Transport

Presentation Of The

South African Civil Aviation Authority

2006 - 2007

Mr. Zakes Myeza Chief Executive Officer

South African Civil Aviation Authority

21st November 2007

Purpose of the Presentation

Background

Organizational overview SACAA Legacy Key Drivers of the strategy Strategic Objectives A1 Project Key Priorities (short – medium term and Long term) Board approval and support

Progress on Strategic Objectives

Financial Review

Audit Performance

Critical Success Factors

Overview Recent Aircraft Incidents

Conclusion

OUTLINEOUTLINE

2

PURPOSE OF PRESENTATIONPURPOSE OF PRESENTATION

3

Provide a brief background of theSA Civil Aviation Authority.

Provide a brief overview of achievements realized during the past financial year.

Capture short-medium term projects and progress thereof.

Capture the long-term projects.

Provide an outline of how we plan to achieve our long-term goals.

BACKGROUNDBACKGROUND

4

Organizational overview.

SACAA Legacy.

Key Drivers of the strategy.

Strategic Objectives.

Towards A Class A1 Project.

Key Priorities (short –medium term and Long term).

ORGANIZATIONAL OVERVIEWORGANIZATIONAL OVERVIEW

5

Our Vision

“Regulatory EXCELLENCE in aviation safety and security”.

Our Mission

“The SACAA is a player in the international arena that seeks to promote and maintain safe and secure civil aviation environment in SA, by regulating and overseeing the functioning of the industry in an efficient, cost- effective, sustainable and customer friendly manner”.

SACAA LEGACYSACAA LEGACY

6

CEO appointed on 16 March 2006 and inherited the following situation:

Lack of capacity; Dysfunctional organization ICAO non-compliance.

Conflict of interest with management and unions;

Incoherent and misaligned structure;

SACAA LEGACY (Cont)SACAA LEGACY (Cont)

7

A culture of non-performance;

Low employee morale;

Poor systems and processes;

A poor view from the industry;

A serious lack of management ;

Poor customer service.

KEY DRIVERS OF THE STRATEGYKEY DRIVERS OF THE STRATEGY

8

According to the SACAA Act, the

objectives of the Authority are to:

Control & regulate civil aviation;

Oversee functioning & development

of the civil aviation industry;

Specifically, to control, regulate &

promote civil aviation safety &

security.

KEY DRIVERS OF THE STRATEGY (Cont)KEY DRIVERS OF THE STRATEGY (Cont)

9

ICAO Critical Elements determine the international requirements for the functioning of SACAA (8 critical elements);

DOT Performance Agreement defines the specific performance contract between the Government and the SACAA for a period of time (6 Key Objectives);

SACAA Board strategy is designed to meet all of these requirements (5 Strategic Themes);

STRATEGIC OBJECTIVESSTRATEGIC OBJECTIVES

10

1. Civil Aviation

Compliance

2. Aviation Industry

Functioning & Growth

3. Effective Systems & Processes

4. Growing Customer Satisfactio

n

5. Human Capital

•The Board has identified five strategic objectives based on the SACAA’s mandate.•These take into account the requirements laid down by ICAO, South African legislation and the Department of Transport

ICAO CONVENTION & STANDARDS

SA CAA ACT & AVIATION ACTS

DOT PERFORMANCE AGREEMENT

SA CAA ORGANISATIONAL STRATEGY

STRATEGIC OBJECTIVES (Cont)STRATEGIC OBJECTIVES (Cont)

11

Five (5) strategic objectives have been identified

Establish and enforce regulations in order to ensure aviation safety and security.

Oversee industry functioning and development to facilitate industry growth.

Build effective organizational systems and processes in order to ensure financial stability, good corporate governance and performance excellence.

Ensure growing customer satisfaction and exceed shareholder expectations.

Attract, develop and retain skilled human capital.

TOWARDS A CLASS A1 PROJECTTOWARDS A CLASS A1 PROJECT

12

“Towards an A1 CAA” project was launched in June 2006 as a turnaround strategy with the following 4 objectives:

To raise the bar on aviation safety and security.

To transform SACAA into a professional, efficient and effective organisation.

To deliver superior customer service.

To make SACAA an employer of choice.

KEY PRIORITIESKEY PRIORITIES

13

Short – Medium Term Plans

Meet ICAO Compliance; Address SACAA leadership challenge; Improve on Customer Service; Narrowing the skills gap and address

skills shortage; Implement a Performance Management System; Improve business processes and

support systems

KEY PRIORITIES (Cont)KEY PRIORITIES (Cont)

14

Long Term Plans

3- year Strategic Plan

Address ICAO & FAA audit findings

Change management

Financial discipline

Work Ethic

Human Capital – HR Transformation

Strategy

BOARD APPROVAL & SUPPORTBOARD APPROVAL & SUPPORT

15

A budget to support Project A1;

Recruitment of more skilled technical

personnel;

Approval of Performance Management

System and implementation.

PROGRESS ON STRATEGIC OBJECTIVESPROGRESS ON STRATEGIC OBJECTIVES

16

STRATEGIC OBJECTIVE NO 1 STRATEGIC OBJECTIVE NO 1

17

Organizational structure was re-

designed and approved to

enable SACAA to deliver more

effectively on its mandate .

New Structure on next slide.

STRATEGIC OBJECTIVE NO 1 (Cont)STRATEGIC OBJECTIVE NO 1 (Cont)

18

CEO

CAA BOARD

Executive:

AS Investigations

SAFETY BOARDCOMMITTEE

Executive:Legal & EWRM

Minister of Transport

Executive:CEO Office

CCA CompanySecretary

GM:ASO

GM:AS

Infrastructure

Executive:HR

GM:Finance

GM:

AVSEC

Executive:Aircraft

SACAA STRUCTURE : EXCO


19

Safety and security oversight was conducted in all the operational areas, namely: Air Safety Operations, Air Safety Infrastructure and Aviation Security. Need for more resources identified.

In addition the following achievements were realized:

Most of the FAA recommendations were addressed;

Introduction and implementation of New Technical Guidance Material;

Increased Technical Personnel;

NTCA Strategy Formulation;

AVMED Strategy Formulation;

Development of a Surveillance Programme;

Milestones with the Aircraft Register clean-up project;


20

The Internal Accident Review Committee met 16 times during the year. A total of 90

accident reports were approved and 154 safety recommendations were forwarded to the CCA.

The Air Safety Investigation department acquired an ECCAIRS system which is an accident / incident database. The benefits of using this system will be felt once the department has fully trained its personnel.


21

5-Year ComparisonThe table below compares accidents reported during the past 5 calendar years:

Year Total Registered Aircraft

Total accidents

% Accidents in relation to Aircraft Register

Total number of fatal accidents

Total number of fatalities

2002 7,927 169 2.13% 19 32

2003 8,403 139 1.65% 17 48

2004 8,822 149 1.68% 17 34

2005 9,314 152 1.63% 18 33

2006 9,782 174 1.78% 29 50


22

TOTAL AIRCRAFT ACCIDENTS

0

20

40

60

80

100

120

140

160

180

200

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

AC

CID

EN

TS

/FA

TA

LS

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

AIR

CR

AF

T O

N R

EG

IST

ER

Aircraft Accidents Fatal Aircraft AccidentsFatalities Aircraft on South African Register

AVIATION ACCIDENTS, FATALITIES AND REGISTER GROWTH


23

Causal factors The table below shows the main causal factors of accidents extracted from finalized aircraft accidents:

Broad Causal Factors 2000 2001 2002 2003 2004 2005 2006

Mechanical / Engine/ Power plant

24 26 29 30 44 36 25

Aircraft Operations Factors

10 7 3 1 7 4 3

Pilot / Flight Crew Factors

92 78 119 122 93 62 117

Maintenance / Servicing Factors

12 9 4 4 5 2 12

Weather Related Factors

12 3 6 6 3 6 11

Collision Related Factors

2 7 10 5 6 10 7

Total Number of Factors

152 130 171 168 158 120 175


24

0

20

40

60

80

100

120

140

2000 2002 2004 2006

Mechanical.Egine/ Powerplant

AircraftOperationsFactors

Pilot/ Flight CrewFactors

Maintenance /Servicing

Weather RelatedFactors

Collision RelatedFactors

CAUSAL FACTORS OF ACCIDENTS


25

Based on the Class A1 project plan the SACAA has registered the following milestones:

The following Operating Regulations were approved by the Minister and Gazetted on 13 July 2007:

Part 24 – Airworthiness Standards Part 94 – Operation of NTCA Part 96 – Commercial Operation of NTCA Part 48 – Aircraft Leasing Part 61 – Personnel Licensing Part 62 – National Licensing Part 185 – Fine Structure


26

Technical PersonnelAs approved by the Board in September 2006, SACAA has already filled 41 of 70

technical positions and 18 of non-technical positions, as shown in the graph below:

JOB CLASSIFICATION

DIVISION NO OF EMPLOYEES

1. Inspectors / Engineers

All areas 41

2. Non Technical appointments

All areas 18

TOTAL APPOINTMENTS 59


27

Information and DocumentManagement A state of the art technical library was established for quick dissemination of reliable information and for ICAO Compliance.

Technical Guidance New ICAO-compliant Technical Guidance Material was developed to ensure consistency in our oversight activities, mainly in the area of licensing.


28

LicensingSACAA’s PPL Examination

System was standardised to comply with global best practices.

Surveillance ObligationsA Surveillance Programme was developed in line with FAA

recommendations. Further work on this Programme is still ongoing to make it as comprehensive as required


29

Aircraft RegisterMajor work on the clean-up of the SA

Aircraft Register has been achieved but still needs further refinement.

Technical Personnel Qualifications & Training plus career ladders

The organizations has developed a new Qualifications Training Framework which is being implemented in 4 phases as follows:

Phase 1 – ASO (complete)Phase 2 - ASIPhase 3 – AVSECPhase 4 – AS Investigations

STRATEGIC OBJECTIVE NO 2STRATEGIC OBJECTIVE NO 2

30

TOTAL BEE SPENT R26,2m

TOTAL SPENT ALL SUPPLIERS R46,3m

TOTAL NUMBER OF SUPPLIERS 58

NUMBER OF BEE SUPPLIERS 34

BEE SUPPLIERS AS % OF TOTAL 58,62%

SACAA BEE TARGET 40%

ACTUAL BEE SPENT AS % OF TOTAL SPEND

56,50%

BEE PROCUREMENT – 2006/7


31

SADC INVOLVEMENT

Participated in benchmarking and information sharing exercises with the following regional CAA’s:

Uganda Botswana Tanzania

Exchange programme with Namibia (2 employees).

Participated in SADC Civil Aviation Commission. Plans to engage SADC once our house is in

order.


32

Corporate Social Investment

The SACAA Sponsorship Policy informs the expenditure of the organization’s CSI budget. The policy dictates that the bulk of our budget would be spent on promoting aviation careers amongst PDI’s.

The SACAA is a member of the Joint Aviation Awareness Programme (JAAP) and has been holding the chairpersonship role until the end of the financial year 2006/7. The projects of this forum have been directed at PDIs.


33

Corporate Social Investment cont.

During the period under review the JAAP activities benefited PDIs in the following

provinces: North West, Eastern Cape, Gauteng, Free State, KwaZulu Natal, Northern Cape.

Each year we spend a portion of the budget in supporting HIV/AIDS related projects or homes, specifically around World Aids

month in December. In the past financial year the same pattern was followed as with the previous years.


34

Skills Development

Negotiations entered into with airlines to partner in skilling and experience for

SACAA inspectors.

Secondment of junior inspectors to airlines to gain required flying experience.

SACAA has an employee development program agreement with Nationwide Airlines, Comair and SA Express.

MOU with TETA.


35

Corporate Governance

The Board consisted of five non-executive members and the CEO, Mr Zakes Myeza.

The three year term of the current Board will expire on 1 May 2008.

During the year under review, all scheduled meetings were convened by the Board and the Board Committees, namely:

The Finance and Audit Committee,The HR and Remuneration Committee,The Safety Committee


36

Financial discipline

Financial Discipline has been instilled mainly through the improvement of internal control systems.


37

Customer Satisfaction

Aviation Community hosted the SACAA during “CAA Day” which was an initiative of the industry in appreciation of the strengthening relationship growing between the authority and the industry.

The Industry Liaison Forum met for all scheduled meetings and relations have improved dramatically and the forum has been used to consult on relevant issues as well as give feedback on important SACAA business.


38

Customer Satisfaction cont.

The Industry Communiqué's via the website was introduced and the feedback from industry regarding this is very positive.

As part of Strategic Objective No. 4, the SACAA is working on a reporting system where client queries are

recorded, tracked and monitored.


39

Performance Management

System

A new Performance Management System was successfully implemented for the period up to July 2007;

The objective of this system is to encourage a culture of high performance amongst employees.


40

Make SACAA an employer of choice

An HR Transformation Strategy was developed and is being implemented with the following Key objectives:

Development of an HR Business Partner Mindset;

Human Resource Information Management System (HRIS);

Transformation and change management framework;


41

HR Governance Framework through Policies and Procedures;

Talent Management and development and partnering;

Effective Transactional Service Delivery;

Employee Relations.

FINANCIAL REVIEW 2006 - 2007FINANCIAL REVIEW 2006 - 2007

42

Key Extracts from Financial Results:

SACAA’s is reporting a deficit of R5,5m compared to a deficit of R5,3m in 2006.

The deficit is mainly attributable to: A1 Project. Labour costs which increased by 15% due to

performance bonuses and an increase in staff numbers.

Infrastructure costs at Ikhaya Lokundiza. Repairs and maintenance costs increased by 34%. Premises costs increased by 15%.

AUDIT REPORT

The independent auditors have presented an unqualified audit report.

FINANCIAL REVIEW 2006 – 2007 (Cont)FINANCIAL REVIEW 2006 – 2007 (Cont)

43

2007

R m

Restated 2006

R m

Revenue 150,7 138, 9

Other operating income 0,3 0,4

Employee benefits expenses

(105,2) (91,1)

Depreciation (6,1) (6, 2)

Other operating expenses (50,5) (53,7)

(Loss) profit from operations

(11,8) (11,8)

Investment income 5,2 6,5

(Loss) profit for the year (5,5) (5,3)

Income Statement for the year ended 31 March 2007

BALANCE SHEET – YEAR ENDED 31 Mar 2007BALANCE SHEET – YEAR ENDED 31 Mar 2007

44

ASSETS R m R m

Non-current assets 30,7 101,1

Equipment 30,7 34,2

Investments - 66,8

Current assets 114,2 36,5

Investments 69,7 -

Trade and other receivables 21,1 11,7

Bank and cash balances 23,2 24,7

TOTAL ASSETS 144,9 137,6

EQUITY AND LIABILITIES

Capital and reserves 112,7 118,7

Non-distributable reserves 53,2 53,2

Accumulated funds 59,4 65,4

Current liabilities 32,2 18,9

Trade and other payables 17,3 14,4

Provisions 14,8 4,4

TOTAL EQUITY & LIABILITIES 144,9 137,6

SACAA AUDIT PERFORMANCESACAA AUDIT PERFORMANCE

45

The SACAA participated in various local and international audits. The organizational performance in these audits was as follows:

ICAO Security Audit (August 2006) This audit was conducted on SACAA,

ACSA, SAA and Interlink Airlines. The outcome of this audit was

overwhelmingly positive and was an indication to us that we rate amongst the best in world.

ISO Audit (September 2006) The SACAA was issued with a new 3-

year Certificate of Conformance to the ISO 9001:2000 Quality Management Systems Standard.

SACAA AUDIT PERFORMANCE (Cont)SACAA AUDIT PERFORMANCE (Cont)

46

TSA (January 2007) The outcome of the US Transport Security

Administration audit was very positive confirming once again that the SACAA is on par with international standards.

ICAO Universal Safety Oversight Audit Programme (USOAP) (July 2007) The SACAA went through a 14-day audit of

which the preliminary outcome was encouraging and positive. (See next slides).

FAA IASA (July/August 2007) Consultation with FAA on the preliminary audit

report and corrective action plan scheduled for 19 and 20 December 2007.

48


PQ Compliance

0102030405060708090

100

1 2 3 4 5 6 7 8

Critical Element

% C

om

plia

nce

Series1

Preliminary results of the measurement utilizing the Critical Element Classification of Protocol Questions (PQs) found to be satisfactory provides the following graph:

Critical elements1. Primary aviation legislation.2. Specific operating regulations.3. State civil aviation system and safety oversight functions.4. Technical personnel qualification and training.5. Technical guidance, tools and the provision of safety-critical information.6. Licensing, certification, authorization and approval obligations.7. Surveillance obligations.8. Resolution of safety concerns.

49


Lack of Effective Implementation - %

0

10

20

30

40

50

60

70

80

90

100

PrimaryAviation

Legislation

SpecificOperating

Regulations

CAA Structureand SafetyOversightFunctions

TechnicalGuidanceMaterial

QualifiedTechnicalPersonnel

Licensing andCertificationObligations

ContinuedSurveillanceObligations

Resolution ofSafety Issues

Non

- com

plia

nce

Botswana

Namibia

Global: 47 (40.11%)

Italy

South Africa

Malaysia

New Zealand

Germany

COMPARISON WITH OTHER COUNTRIES

50

CRITICAL SUCCESS FACTORSCRITICAL SUCCESS FACTORS

Tariff Increases: The last tariff increases were between 1999

and 2004;

Organizational challenges have increased since the last increase;

Consultation with industry has taken place regarding the proposed review;

The Minister’s approval has been obtained;

The SACAA envisages implementation in January 2008;

This increase will enhance SACAA’s safety and security oversight of the industry.

51

CRITICAL SUCCESS FACTORS (Cont)CRITICAL SUCCESS FACTORS (Cont)

Recruitment Drive Project: Both the ICAO and FAA audits have indicated

that insufficient qualified and experienced technical personnel within SACAA may result in inadequate safety oversight;

As a result of this the SACAA has embarked on a recruitment drive to address the above challenge;

This project has already made inroads albeit skills shortages in the country and globally;

Industry expertise will be tapped into on a need basis.

52


Structural Conflicts:

CCA vs CEO Conflict or overlap between the functions of the

Commissioner of Civil Aviation and those of the Chief Executive Officer has been raised in both the ICAO and FAA safety audits.

This requires urgent attention through relevant regulatory processes.

Air Safety Investigations The independence of the Air Safety Investigations

department has been raised as an issue of concern in the ICAO audit.

53


Structural conflicts cont.

Task Team has been appointed to deal with the finalization of the

separation of roles between the SACAA and the Office of the Chief: Civil Aviation Security.

54


Customer Satisfaction:

As a service oriented organization, the SACAA has made customer satisfaction one of our strategic objectives.

We will put in place a Customer Satisfaction Index that measures our efficiency towards customers.

55

OVERVIEW OF RECENT AVIATION INCIDENTSOVERVIEW OF RECENT AVIATION INCIDENTS

3 Aircraft incidents have drawn the attention of the media and general public alike;

SAA Aircraft incident at Cape Town International Airport. Nationwide Aircraft incident also at Cape Town International Airport.Kulula aircraft incident at OR Tambo International Airport.

56

OVERVIEW OF RECENT AVIATION INCIDENTS (Cont)OVERVIEW OF RECENT AVIATION INCIDENTS (Cont)

1st IncidentSAA Airbus A340-600;Aircraft landed safely, however during maneuver on the taxiway, nose wheel veered off the runway and was stuck in the ground.Aircraft disrupted operations at the airport for 3 hours. SACAA refused the airline permission to fly the aircraft back to Johannesburg with passengers.Aircraft was returned to service only after landing gear retraction checks were performed by the airline under the direct supervision of the SACAA.

57


2nd IncidentNationwide Boeing 737-200;Engine separated from the aircraft during the take off phase at Cape Town International Airport.SACAA’s reaction was immediate with the issuance of an Emergence Airworthiness Directive (AD), calling for technical inspections of engine mounts and associated components. AD was issued as a precautionary measure, and not suggesting the outcome of the investigation.32 aircraft were affected, operated by Nationwide, Comair, SAA, Interlink, Interair & Star Air Cargo

58


Nationwide Boeing 737-200;

Inspections have been conducted by the airlines affected and no defects have been found on any of the aircraft.At least 4 similar incidents have occurred elsewhere in the world and a summary of such occurrences is given as follows;

59


Delta Flight – 7/01/2002 - USA;

Again engine separated from aircraft during the take off phase.Aircraft continued to climb and eventually landed safely.Cause of incident was bolts failing due to fatigue.

60


US AIR Flight – 5/12/1987 - USA;

At 4000 feet, aircraft engine separated from the aircraft.Passenger saw engine falling but aircraft landed safely.Cause of incident was bolts failing due to fatigue.

61


Southwest Flight – 3/01/1986 - USA;

Both engine support structure failed during the take off phase.No 2 engine eventually separated from the aircraft.Cause of incident was failed engine support structures.

62


Piedmont Flight – 20/01/1989 - USA;

Engine separated from aircraft during the take off phase.Aircraft continued to climb and eventually landed safely.Cause of incident was bolts failing due to fatigue.

63


3rd Incident Kulula Aircraft – MD 80;

Aircraft experienced engine problems in flight and pilot opted to return to OR Tambo International Airport, as a precautionary measure.Aircraft was landed safely back at OR Tambo International Airport.

64


SACAA’s View On The Incidents: SACAA believes that the incidents are

isolated and consistent with global trends.

There is a lot we can learn from other regulators pertaining to how they deal with the incidents.

SACAA technical inspectors are on high alert pertaining to their readiness to respond

decisively with any other incidents that might occur.

There is increased visibility of inspectors at both the airports and airline maintenance

and operations facilities – for oversight purposes.

65

CONCLUSIONCONCLUSION

The SACAA had many projects to manage in the past Financial Year with 5 external audits and the implementation of new systems.

All these contributed to the new and improved SACAA that is emerging and is evident even to our customers.

However, the work still continues and our walk towards excellence is far from over.

66

THANK YOUTHANK YOU

parliament of republic of south africa portfolio committee on transport presentation of the

Documents

civil aviation industry

civil aviation safety

civil aviation compliance2

functioning of sacaa

sacaa act

missionthe sacaa

functioning development

sacaa legacy6 ceo