INTEGRATED REPORT 2019

Transformation

Airports Company South Africa is a significant enabler of economic growth, transformation and socio-economic development.”

Socio-ECONOMIC IMPACT

Airports Company South Africa is a significant enabler of economic growth, transformation and socio-economic development.

In the year under review, we conducted an Economic Impact Study for FY2017/18, which enabled us to assess the socio-economic impact of our strategy and operations on local communities in which we operate, provincial economies and the country at large. This study reflected that we:

Generated R7.6 billion

for South Africa’s economy

SUPPORTED 30 684 JOBS

of direct employees and indirect jobs in our supply chain and induced jobs owing to wages spent by direct employees*

Supported R2.9 billion

in income for our employees and those of our local suppliers

* Notes on employment contributions:

  • Direct employment contribution, which includes the Group’s own operations i.e. people employed directly by the company;
  • Indirect employment contribution in other sectors through the Group’s supply chain expenditure;
  • Induced employment contribution in other sectors as a result of wages spent by the Group employees as well as wages spent by employees of Group’s suppliers in the wider economy.

Material matter: Transformation

Description

As part of our mandate to contribute positively to economic growth and development in South Africa, we view inclusive growth as a legislative and ethical requirement for successful business operation and growth in South Africa.

Strategic response

Our approach to transformation is to embed the upliftment of communities, development of skills and formation of empowerment partnerships into our business activities. As a state-owned enterprise, we believe our approach to value creation must certainly include a socio-economic development component which includes not only transformation within the Group at Board and employee level, but also in communities surrounding our airports – through skills development programmes, corporate social investment and preferential procurement – and in the country at large, given our national footprint.

Impact of the transformation material matter on our business

.

Strategic pillar

Run airports

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Our response to risks and opportunities in FY2018/19

  • Ongoing litigation: Engagement with suppliers and other stakeholders through roadshows to share our transformation journey and align objectives.

  • Broadening empowerment: Achieved KPI targets for B-BBEE scorecard elements.

  • Growing black business participation in the economy: Grew share of commercial revenue and operational and developmental business spend on black business equal to and above targets respectively.

Impact of our response on stakeholders in FY2018/19 and beyond

  • More local suppliers and service providers will do business with the Group.

  • Black business now comprises a larger share of our operational and developmental spend and commercial revenue.

  • Our socio-economic development programmes empower communities for a better future.

Strategic pillar

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Our desired outcome

  • Create job opportunities.

  • Promote diversity and inclusion through employment equity.

  • Grow black business’ share of operational and developmental spend and commercial revenue.

Trade-offs to achieve our desired outcome

  • Ongoing litigation has delayed the implementation of new retail and supplier contracts, and thus our transformation objectives in this space.

  • Contractual uniformity will require us to set service standards across airports for multiple service providers.

Develop airports.

  • Provide development opportunities to previously disadvantaged people: Local communities involved in airport planning process and supplier base.

  • We invested R48 million in skills development programmes in FY2018/19.

  • Upskilled members of local communities can provide services for the Group directly or indirectly.

  • Obtaining funding approval has delayed the placement of tenders into the market.

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