Airways Annual Report 2019

Airways Corporation of New Zealand Limited Annual Report 2018 2019

F.17

Airways Annual Report 2018 2019

C R E A T I N G T H E A V I A T I O N E N V I R O N M E N T O F T H E

F U

Airways Corporation of New Zealand Limited Annual Report 2018 2019

T U R E

H I G H L I G H T S 2018 2019

Our performance

CON T E N T S

Chair and CEO’s review

Financial performance

Investing in the future

Performance and progress against SCI metrics

Integrating drones into our airspace

Financial statements

Airways International

EVA Key Performance Indicators

Sustainability

Additional financial information

Airways Board of Directors

Governance at Airways

Airways Corporation of New Zealand Limited Annual Report 2018 2019

CHAIR AND CEO’S REVIEW

998,783 38,014 $23.6M 99.56% 02 300,000 $2.65M FLIGHT MOVEMENTS UAV FLIGHTS GROUP NOPAT AIR TRAFFIC SERVICE AVAILABILITY NEAR COLLISIONS MINUTES OF IN-FLIGHT DELAY AVOIDED

INVESTING IN THE FUTURE

INTEGRATING DRONES INTO OUR AIRSPACE

AIRWAYS INTERNATIONAL

SUSTAINABILITY

AIRWAYS BOARD OF DIRECTORS

FINANCIALS

FINANCIAL PERFORMANCE

PERFORMANCE AND PROGRESS AGAINST SCI METRICS

FINANCIAL STATEMENTS

EVA KEY PERFORMANCE INDICATORS

ADDITIONAL FINANCIAL INFORMATION

INVESTMENT IN STAFF TRAINING

GOVERNANCE AT AIRWAYS

01 SERIOUS HARM INJURY

$8M COMMERCIAL BUSINESS NOPAT

$12M DIVIDEND TO NZ GOVERNMENT

CHA I R AND CH I EF EXECUT I VE ’ S REV I EW

DENISE CHURCH CHAIR

GRAEME SUMNER CHIEF EXECUTIVE OFFICER

Safe skies today and tomorrow

As Airways continues on its journey to create the aviation environment of the future, we reflect on a year of collaboration, evolving technologies and the sheer hard work of our people to deliver our core services and drive growth.

Airways Corporation of New Zealand Limited Annual Report 2018 2019

SAFETY I S PARAMOUNT We are committed to achieving the highest level of safety performance across our organisation and, as the aviation environment evolves, we are working to proactively identify safety enhancements and learn from events. While loss of separation events remained stable during the year, two near collision events between aircraft were recorded in controlled airspace – one in the airspace surrounding Rotorua Airport and another on the approach into Wellington International Airport. Safety improvement initiatives are underway as part of ongoing investigations following both events. The health and safety of our people is paramount and we are disappointed to report one serious harm injury involving a contractor undertaking work for Airways. A number of recommended improvements have been implemented to reduce risk and further ensure safe working practices following an investigation into the incident. We are pleased to report that the contractor has returned to work. ENGAG I NG WI TH CUSTOMERS In June 2019 Airways confirmed new prices for our air traffic management services to airlines, light aircraft and general aviation operators. Following a robust and collaborative consultation process with our key customers, we announced an increase in prices for airlines of 21.4% over three years, from July 2019 to June 2022. Prices for general aviation operators will be kept in line with inflation, increasing by an average of 2.5% each year over the three years. To the matter of pricing, Airways prices have increased by an average of 2.5% per year over the past 10 years. Throughout the price setting process we looked to achieve a sensible balance between the need to invest in New Zealand’s aviation network, while maintaining prices that are internationally competitive. Customer feedback put forward during the consultation endorsed Airways’ broad vision for creating the aviation environment of the future. This includes the introduction of future-focused services, including digital air traffic control towers and UAV (drone) traffic management.

Airways’ central focus on delivering safe and efficient air navigation services for New Zealand and beyond has been unwavering and we have enabled almost a million safe journeys through our skies during the 2019 financial year. Providing flexible, responsive and excellent service to our customers is critically important to us and this is reflected in our performance across the national network. Unplanned staff unavailability unfortunately resulted in a reduction of services for some locations during the year. Contingency procedures were required on a number of occasions for Hawke’s Bay Airport and, while these procedures enabled all flights to operate safely, we regret that there was disruption to some flights. Airways continues to work closely with our people and customers as we look to new technologies and ways of working that will improve resilience and support us to deliver more flexible, safe and sustainable services nationwide.

CHAIR AND CEO’S REVIEW

INVESTING IN THE FUTURE

INTEGRATING DRONES INTO OUR AIRSPACE

AIRWAYS INTERNATIONAL

SUSTAINABILITY

AIRWAYS BOARD OF DIRECTORS

FINANCIALS

FINANCIAL PERFORMANCE

PERFORMANCE AND PROGRESS AGAINST SCI METRICS

FINANCIAL STATEMENTS

EVA KEY PERFORMANCE INDICATORS

ADDITIONAL FINANCIAL INFORMATION

GOVERNANCE AT AIRWAYS

“ W E H A V E E N A B L E D A L M O S T A M I L L I O N S A F E J O U R N E Y S T H R O U G H O U R S K I E S D U R I N G T H E 2 0 1 9 F I N A N C I A L Y E A R . ”

Twelve submissions were received and carefully considered before our final prices were determined. CORE BUS I NESS CUSTOMER SAT I SFACT I ON Each year Airways asks airports, airlines and aviation partners (industry associations and the GA community) to take part in customer satisfaction research. The objective is to identify opportunities for Airways to add value to our customers in the coming year. This year only 45 respondents took part in the research. We thank those who took the time to take part in either an online or telephone interview with our independent research provider. Overall satisfaction from respondents was as follows: Very satisfied 47% | Neutral 47% | Dissatisfied 7% We note the decline in satisfaction from our airline partners this year, where we have had changes to pricing and departure from our normal service standard. We are strongly resolved to improve service in the coming year. We would like to thank our customers for their active participation. F I NANC I AL PERFORMANCE This year the Airways group achieved a Net Operating Profit after Tax of $23.6 million, in line with budget (refer to NOPAT reconciliation on page 28). Airways International Ltd maintained steady growth across the commercial portfolio with a NOPAT of $8 million, a 25 per cent increase on the previous year.

A I RWAYS BOARD CHANGES :

Judy Kirk was farewelled as Airways’ Board Chair in December 2018. Denise Church was appointed Board Chair in January 2019, bringing a wide range of governance and management experience. Chris Moxon stepped down as a director in October 2018. Lisa Jacobs joined the board in November 2018, followed by John Holt and Paula Jackson in January 2019.

“ D R O N E S A N D A U T O N O M O U S F L Y I N G V E H I C L E S R E M A I N T H E S I N G L E B I G G E S T G A M E C H A N G E R F O R A V I A T I O N A N D A I R WA Y S S H A R E S I N A W I D E R I N D U S T R Y V I S I O N T O S A F E L Y I N T E G R A T E T H E S E A I R C R A F T I N T O T H E E X I S T I N G A I R T R A F F I C N E T W O R K . ”

Airways Corporation of New Zealand Limited Annual Report 2018 2019

Investment in key customer relationships, continued product development and an ongoing flow of students into our training campuses has driven this result. The Middle East continues to be a focus as we further strengthen our business and relationships in this region. During the year we established a training academy in Kuwait and installed a 320-degree tower simulator in Beirut, Lebanon. In FY19 we were pleased to welcome 111 international air traffic students to our Christchurch and Palmerston North training campuses. I NVEST I NG I N THE FUTURE Through ongoing capital investment and a focus on developing technology enabled solutions, we are making headway towards our vision to create the aviation environment of the future. In August 2018 we opened two new air traffic control towers at Wellington International Airport and Nelson Airport. To celebrate the openings of both towers we held ceremonies attended by staff, our customers, key stakeholders, iwi and members of the aviation community. These two modern towers are a significant investment for Airways and will support the growing aviation needs of both locations. They are also likely to be the last two ‘bricks and mortar’ towers to open in New Zealand, as we look to digital tower technology to deliver safer and more efficient aerodrome services that are better aligned to our customers’ needs. Development of New Zealand’s first digital tower at Invercargill Airport is underway after a contract to design and build the system was awarded in February to Austrian technology company Frequentis. The Airways Board also approved a business investment case for the procurement of a contingent digital tower for Auckland International Airport. We are proud to report the completion of all ground infrastructure for the nationwide Automatic Dependent Surveillance Broadcast (ADS-B) network – a major milestone for New Southern Sky, the Government’s airspace modernisation programme. Fifteen ADS-B sites were installed throughout the regions, bringing the total number of sites to 26. The regional sites will be connected into the air traffic management platform in 2019. The network is on track to be fully operational in time for the anticipated mandate for all aircraft operating in controlled airspace to be ADS-B capable by the end of 2021. ADS-B will replace radar as New Zealand’s main aircraft tracking technology when the secondary surveillance radar system is decommissioned in 2022.

This technology uses GPS to detect and track the movement of aircraft more precisely than radar, and in areas where radar coverage is limited. The system is already detecting aircraft in areas of limited radar coverage such as the Hawke’s Bay, Gisborne and much of the South Island’s West Coast. Drones and autonomous flying vehicles remain the single biggest game changer for aviation and Airways shares in a wider industry vision to safely integrate these aircraft into the existing air traffic network. The development of a nationwide unmanned aerial vehicle traffic management (UTM) system is key to realising this vision and we have made solid progress during the year. AirShare has been established as a subsidiary of Airways. The drone user hub – originally developed in 2014 – has been relaunched as a consumer app with advanced functionality to assist drone users to fly safely. OUR PEOPLE As always, our people are at the heart of Airways’ success and we thank them for their ongoing hard work, commitment and dedication. Our people are key to growing our capabilities and continually pushing beyond the boundaries as we deliver the changes required for Airways to fulfil its vision of creating the aviation environment of the future, A number of structural changes within the Air Traffic Services and Airways International areas of the business were implemented during the year, aimed at streamlining our business processes and delivering a better service to our customers. As part of these changes we welcomed two new appointments to the Airways Executive team – Ed Overy as Chief Information Officer and Sharon Cooke as CEO of Airways International. Katie Breatnach joined Airways as Head of Legal and Company Secretary in July 2019. Development of our staff culture has also been a key focus – Airways’ Culture Development Group has made important steps this year to help make Airways a great place to work. We would also like to acknowledge the successful completion of collective agreement negotiations with the New Zealand Air Line Pilots Association and the Aviation and Marine Engineers Association - the representative unions for air traffic controllers, and engineering and technical staff.

CHAIR AND CEO’S REVIEW

INVESTING IN THE FUTURE

INTEGRATING DRONES INTO OUR AIRSPACE

AIRWAYS INTERNATIONAL

SUSTAINABILITY

AIRWAYS BOARD OF DIRECTORS

FINANCIALS

FINANCIAL PERFORMANCE

PERFORMANCE AND PROGRESS AGAINST SCI METRICS

FINANCIAL STATEMENTS

EVA KEY PERFORMANCE INDICATORS

ADDITIONAL FINANCIAL INFORMATION

GOVERNANCE AT AIRWAYS

Denise Church Graeme Sumner Airways Board Chair Airways CEO

Investing in the future

“ A D I G I T A L T O W E R F O R I N V E R C A R G I L L A I R P O R T I S T H E F I R S T S T E P I N O U R J O U R N E Y T O M O D E R N I S E T H E WA Y W E P R O V I D E A I R T R A F F I C S E R V I C E S A T A I R P O R T S , A S P A R T O F O U R F U T U R E A E R O D R O M E S E R V I C E S P R O G R A M M E . ”

Airways Corporation of New Zealand Limited Annual Report 2018 2019

SkyLine-X ATM system

Our ongoing investment in technologies and infrastructure supports the growth and evolution of New Zealand aviation through improvement in safety and resilience, creation of flexible and sustainable regional services and enhanced sustainability of Airways’ business.

CHAIR AND CEO’S REVIEW

24/7 services on one operating platform

INVESTING IN THE FUTURE

NEW A I R TRAFF I C CENTRES AND ATM SYSTEM

INTEGRATING DRONES INTO OUR AIRSPACE

The construction of two new air traffic control centres in Auckland and Christchurch is well underway and due for completion this year. These highly resilient buildings are being constructed with the capability to withstand significant seismic events and retain their operational functionality following an earthquake, severe weather event or major disaster. During the year we worked with our people on the layout of controller work positions to ensure optimum operational capability, as well as the look and feel for the new centres. Once construction is complete the buildings will be fitted out with the new SkyLine-X air traffic management (ATM) platform, ready for controllers to begin managing airspace from the new facilities at the end of 2020. Airways has partnered with global science and technology company Leidos to co-develop the $58 million SkyLine-X platform, which will integrate our domestic and oceanic ATM systems. SkyLine-X will provide controllers with additional features to

Christchurch and Auckland

AIRWAYS INTERNATIONAL

$58m investment

SUSTAINABILITY

AIRWAYS BOARD OF DIRECTORS

FINANCIALS

FINANCIAL PERFORMANCE

PERFORMANCE AND PROGRESS AGAINST SCI METRICS

FINANCIAL STATEMENTS

EVA KEY PERFORMANCE INDICATORS

ADDITIONAL FINANCIAL INFORMATION

GOVERNANCE AT AIRWAYS

increase safety and efficiency, including medium and long-term conflict alerting, time-based separation and arrival and departure management tools. In collaboration with Leidos, we have successfully completed three of the four software builds for the new platform. Some of the new technology is being introduced into our current platform and will support easier migration into the new system.   A key feature of our new ATM platform is a new $7 million IP based voice communications system, providing controllers with air-to-ground and ground- to-ground voice communications. Moving from a radio-based system to a fully digitised one, developed by Rohde and Schwarz, is critical to enabling Airways to operate across two centres in Auckland and Christchurch, as well as 19 control towers.

$7m IP based voice communications system

Airways Corporation of New Zealand Limited Annual Report 2018 2019

D I G I TAL A I R TRAFF I C CONTROL TOWERS A digital tower for Invercargill Airport is the first step in our journey to modernise the way we provide air traffic services at airports as part of our Future Aerodrome Services Programme (FASP). As a first step, Airways has been working with stakeholders to determine the future service requirements at attended aerodromes around New Zealand. Digital towers are a core component of the programme, focused on ensuring we are able to provide safe, more flexible and efficient services for our customers now and in the future. In February 2019 we awarded a contract to Austrian technology provider Frequentis to develop the digital system for Invercargill Airport. We are working in partnership to deploy the system which is due to go live in 2021 and will be operated at first by controllers based at the airfield. Planning is also underway for the installation of a digital system at Auckland International Airport. This will initially act as a back-up contingency system for the existing tower, before a full replacement is potentially implemented in the future. By replicating the view a controller would have from a conventional tower, using high definition cameras and surveillance sensors, digital tower technology offers increased safety, less disruption in poor weather and could improve regional connectivity. In the future, controllers could manage air traffic from a centralised hub away from the airfield providing services for a number of locations. Airways has been following the development of digital towers around the world since 2012 and is confident that the capability and cost of digital technologies presents significant opportunities for services in New Zealand.

QUEENSTOWN APPROACH SERV I CES Changes made to the way we deliver the approach service into Queenstown Airport have brought it in to line with our best practice services at other main international airports in Auckland, Wellington and Christchurch. The Queenstown approach service is now being delivered using surveillance technology from our Christchurch radar centre, and is the culmination of a two-year work effort by people from across our business. Previously the service was delivered using a procedural system from Queenstown Tower. Moving to this approach will allow our teams to deliver the service with a greater level of safety and will help to more efficiently manage flight increases into Queenstown as the region continues to grow. All approach services will be provided using surveillance technology once the anticipated mandate for all aircraft operating in controlled airspace to be ADS-B capable comes into effect. This is expected in 2021.

CHAIR AND CEO’S REVIEW

INVESTING IN THE FUTURE

INTEGRATING DRONES INTO OUR AIRSPACE

AIRWAYS INTERNATIONAL

SUSTAINABILITY

AIRWAYS BOARD OF DIRECTORS

FINANCIALS

FINANCIAL PERFORMANCE

“ A I R WAY S H A S B E E N WO R K I N G W I T H S T A K E H O L D E R S T O D E T E R M I N E T H E F U T U R E S E R V I C E R E Q U I R E M E N T S A T A T T E N D E D A E R O -

PERFORMANCE AND PROGRESS AGAINST SCI METRICS

FINANCIAL STATEMENTS

D R O M E S A R O U N D N E W Z E A L A N D . ”

EVA KEY PERFORMANCE INDICATORS

ADDITIONAL FINANCIAL INFORMATION

GOVERNANCE AT AIRWAYS

Integrating drones into New Zealand airspace

As commercial and recreational drone use continues to grow at a rapid pace in New Zealand, the need to safely integrate Unmanned Aerial Vehicles (UAVs) into the aviation system is critical. We’ve worked closely with the Civil Aviation Authority (CAA), the Ministry of Transport (MOT) and the Ministry of Business, Innovation and Employment (MBIE) this year to develop a joint vision for the safe integration of UAVs and autonomous flying vehicles into New Zealand airspace. Three key progress areas have been identified: the development of a UAV traffic management system (UTM), aerodrome safety, and supporting the wider development of national UAV infrastructure. Airways has taken significant steps forward in each of these areas during the year as we support the safe growth and development of the New Zealand drone sector.

Airways Corporation of New Zealand Limited Annual Report 2018 2019

CHAIR AND CEO’S REVIEW

A I RSHARE Airways is committed to doing everything we can to enhance aviation safety and ensure the safe passage of aircraft in controlled airspace as drone use increases. Central to this is AirShare, which was first launched in 2014 and became a subsidiary of Airways in December 2018. AirShare has evolved from a one- stop-shop website providing information on how to operate drones safely, to a stand-alone business with a wider purpose to develop a safe, transparent and efficient UTM system for New Zealand. The first AirShare mobile app was released in March 2019, allowing users to see where they can fly, file a flight plan and gain approvals to access controlled airspace. The app provides proximity and surveillance data for better situational awareness and sends automated text alerts for boundary infringements. The AirShare website was also refreshed, focusing on ease of use for logging flights, learning the rules, and growing the AirShare database of more than 14,000 registered drone operators. Engagement with drone operators throughout New Zealand is a key focus as AirShare works to grow awareness of the platform and create useful tools for users.

INVESTING IN THE FUTURE

INTEGRATING DRONES INTO OUR AIRSPACE

AIRWAYS INTERNATIONAL

SUSTAINABILITY

AIRWAYS BOARD OF DIRECTORS

14,000 registered drone operators

FINANCIALS

FINANCIAL PERFORMANCE

PERFORMANCE AND PROGRESS AGAINST SCI METRICS

FINANCIAL STATEMENTS

EVA KEY PERFORMANCE INDICATORS

ADDITIONAL FINANCIAL INFORMATION

GOVERNANCE AT AIRWAYS

“ O U R P R I M A R Y F O C U S I S T O E N S U R E S A F E I N T E G R A T I O N O F U A V S I N T O T H E E X I S T I N G A V I A T I O N S Y S T E M , A C R O S S B O T H C O N T R O L L E D A N D U N C O N T R O L L E D A I R S P A C E . ”

AERODROME SAFETY With an average of two unauthorised drone sightings currently reported per week in controlled airspace, it is critical that Airways has the ability to detect and track drones to prevent collisions with other aircraft – particularly in the approach areas of New Zealand’s major airports. Drone detection technology is rapidly advancing and finding the right solution is proving to be a global challenge. We are currently trialling technologies that will positively detect UAVs around airports and track their flight path. Our investigations included a trial of two drone detection systems at Auckland International Airport to analyse and gain a deeper understanding of the technology. We discovered that each technology has unique benefits and have identified that multiple systems may be needed simultaneously to validate and improve drone detection reliability.

NAT I ONAL UAV I NFRASTRUCTURE National UAV infrastructure will lay the foundation for safe and efficient beyond-visual-line-of-sight (BVLOS) operations and will ensure airspace is safe and optimised as UAV traffic increases. In early 2019 AirShare led field trials at Bethells Beach, Auckland, of technologies that could support BVLOS operations. Tests were undertaken to identify if the LTE mobile phone network and Automatic Dependent Surveillance Broadcast (ADS-B) technology could be used as a way to provide command and control capability, and greater situational awareness. The findings of these trials, undertaken in partnership with Spark, Auckland Council and drone company X-Craft, will be used to develop and promote processes and systems for safely managing UAV flights that cannot be directly observed by the operator. The findings and recommendations from AirShare’s trial will be presented back to a cross-government working group involving Airways, AirShare, CAA, MBIE and MOT.

Airways Corporation of New Zealand Limited Annual Report 2018 2019

Airways International

CHAIR AND CEO’S REVIEW

INVESTING IN THE FUTURE

INTEGRATING DRONES INTO OUR AIRSPACE

AIRWAYS INTERNATIONAL

SUSTAINABILITY

AIRWAYS BOARD OF DIRECTORS

FINANCIALS

FINANCIAL PERFORMANCE

TRA I N I NG AND S I MULAT I ON I N THE M I DDLE EAST

Airways’ innovation and expertise is being exported around the globe. Solid growth across our commercial portfolio during the year has enhanced the value of Airways and our reputation as a world-leading provider of ATC training and simulation services. A refresh of the commercial business model saw all Airways’ commercial activities aligned under the umbrella of Airways International Ltd, established in June 2018. This strategy aims to ensure our commercial products and services are well positioned to thrive as they meet the unique and complex needs of the air navigation service provider (ANSP) and aviation industry.

PERFORMANCE AND PROGRESS AGAINST SCI METRICS

The Middle East remains a key market for Airways International. During the year we further developed our business and relationships in the region through ATC training, and deployment and installation of two TotalControl ATC simulation facilities. We established an ATC training academy in Kuwait in September 2018 in partnership with the Australian College of Kuwait (ACK). Airways International installed two tower simulators and two surveillance simulators in the ACK facility before providing a one- year training programme for Kuwaiti ATC students who graduated in July this year. The Kuwait contract was a bespoke training solution incorporating Airways simulation, competency-based training and e-learning using our AirBooks interactive learning resources, and our SureSelect computer- based ATC skill simulation tests to select students for training. In Lebanon, an LCD tower simulator and two surveillance simulators were installed and commissioned for the Directorate General of Civil Aviation (DGCA), at Beirut-Rafic Hariri International Airport. This was the culmination of a 12-month project for Airways International.

FINANCIAL STATEMENTS

EVA KEY PERFORMANCE INDICATORS

ADDITIONAL FINANCIAL INFORMATION

350 NZ and international ATC students trained

GOVERNANCE AT AIRWAYS

DGCA managers and air traffic controllers undertook simulation testing and training in New Zealand in April, before the simulators were shipped to Lebanon for installation and commissioning in May. The facility will be used to train DGCA’s ATC controllers and students using simulated scenarios that mimic the real world. About 350 New Zealand and international students undertook ATC training at Airways International’s training academy during the year, at our purpose- built training facilities in Christchurch and Palmerston North, and at their own facilities. Two groups of Saudi Arabian students from the General Authority of Civil Aviation started ATC training in Palmerston North during the year. Courses are also underway in Christchurch for Emirati, Pasifika, Vietnamese and Hong Kong students. In addition to the Middle East market and New Zealand based training, instructors delivered courses offshore in Ghana, Bahrain, Vietnam and Singapore. I NTERNAT I ONAL PARTNERSH I PS Collaboration with other ANSPs and aviation service providers is a core element of Airways International’s strategy to grow and expand our reach in global markets. In March 2019 we signed a memorandum of understanding (MOU) with MITRE Corporation, agreeing to combine our expertise and shared capabilities to address aviation challenges across Asia Pacific. Our first step as part of this partnership is the development of a data analytics tool that enables better decision making for ANSPs and delivers demonstrable safety and efficiency gains for customers. Airways International also established a strategic partnership with Leidos during the year, signing an MOU committing to collaborate on the development of next generation air traffic management technologies and training and simulation solutions. The organisations’ co-development of the SkyLine-X air traffic management platform has laid the foundation for future collaboration on ATM projects around the world.

Airways Corporation of New Zealand Limited Annual Report 2018 2019

AV I AT I ON SERV I CES The Aviation Services business unit of Airways International provides equipment installation and maintenance services, upper airspace services and aviation consultancy to airport and ANSP customers in New Zealand and worldwide. In August 2018 Aviation Services commenced an airfield lighting project at RNZAF Base Ohakea. New LED taxiway and runway edge lights and Movement Area Guidance signs are being installed, and around 100km of cabling is being laid as part of this New Zealand Defence Force major upgrade which is due for completion in November. PROCEDURE AND A I RSPACE DES I GN , AND FL I GHT I NSPECT I ON Our Aeropath business completed a significant procedure design project in the Philippines during the year, developing the concept for a proposed new international airport development. It is hoped that this project, run through a consortium, will lead to further consultancy opportunities in the Philippines for Aeropath. Our procedure design, charting and flight inspection work in the South Pacific continues to cement Airways’ commitment to enhancing aviation safety and developing sustainable and efficient services that will make a difference in the region.

Airways has been working with the New Zealand Ministry of Foreign Affairs and Trade (MFAT) since 2013 on a multi-year Pacific Aeronautical Charting and Procedures (PACP) programme. The $2.4 million project to update flight procedures and aviation charts for 38 aerodromes across the Pacific, was largely completed during the year. Aeropath and Airways worked closely with MFAT to ensure new flight procedures were implemented in time to support the Pacific Islands Forum held in Tuvalu in September. The PACP programme comprised of more accurate surveying of runways and designing satellite-based approach procedures to improve the ability of aircraft to land safely, especially in poor weather. Aeropath and Airways also participated in a testbed project during the year, exploring the development of a regional satellite-based augmentation system (SBAS) to improve the

CHAIR AND CEO’S REVIEW

INVESTING IN THE FUTURE

INTEGRATING DRONES INTO OUR AIRSPACE

AIRWAYS INTERNATIONAL

SUSTAINABILITY

accuracy of GNSS approach procedures. Run in conjunction with FrontierSI Australia, the project was a major step in the possible

AIRWAYS BOARD OF DIRECTORS

implementation of an SBAS system to be operated by the Australian Government, which New Zealand may gain access to in the future. The trial commenced in October 2017 and testing was completed in July 2018.

FINANCIALS

FINANCIAL PERFORMANCE

PERFORMANCE AND PROGRESS AGAINST SCI METRICS

FINANCIAL STATEMENTS

EVA KEY PERFORMANCE INDICATORS

“ C O L L A B O R A T I O N W I T H O T H E R A N S P S A N D A V I A T I O N S E R V I C E P R O V I D E R S I S A C O R E E L E M E N T O F A I R WA Y S I N T E R N A T I O N A L ’ S S T R A T E G Y T O G R O W A N D E X P A N D O U R R E A C H I N G L O B A L M A R K E T S . ”

ADDITIONAL FINANCIAL INFORMATION

GOVERNANCE AT AIRWAYS

Sustainability

We are committed to making a positive contribution to the world we live in – achieving Airways’ strategic goals in a socially and environmentally sustainable way that works for our business, our people, and for all of New Zealand.

During the year we developed our first sustainability framework, to be fully integrated into Airways’ strategy and business plans. The framework brings together the sustainability initiatives already underway or completed at Airways and sets a direction for our future progress. It focuses on four pillars of commitment: our contribution, our team, our communities and our footprint. To ensure a firm foundation for our sustainability journey we interviewed our people, customers, and Government stakeholders to understand what they cared about and the opportunities they see for Airways to lead in achieving footprint reductions in the aviation industry. Workshops were held to review these insights against Airways’ vision and purpose and the Government’s Living Standards Framework. The sustainability framework was developed as an outcome of this work and finalised in September 2018.

Airways Corporation of New Zealand Limited Annual Report 2018 2019

OUR PERFORMANCE SO FAR This year Airways employed a dedicated sustainability advisor to manage our initiatives. Our progress to date has been focused on reducing waste and tackling carbon emissions. A focus on waste A key sustainability initiative for Airways is to design and implement waste collection that diverts material from landfill and forms a basis for a zero waste organisation. The starting point was to understand the waste we generate, our existing waste facilities and services, and identify opportunities for improvement. This investigation involved surveying each of our domestic facilities, conversations with our existing waste providers, data interrogation where available and engagement with our staff. As an initial step we are working to minimise disposable materials entering our business. One staff-led initiative completed during the year was providing reusable Keep Cups at all our premises – a key step embraced whole-heartedly by our people. We estimate that the 1,000 cups purchased have the potential to remove over 50,000 disposable takeaway cups from landfill every year. Tackling carbon emissions Airways generates greenhouse gases primarily through our fleet of vehicles, electricity use and company travel. We also have a significant influence over the carbon emissions of our airline customers through the efficient direction of aircraft. We are reducing our impact in the skies through our introduction and use of Performance Based Navigation procedures, and with our Collaborative Arrivals Manager tool which minimises delays and maximises efficiencies for airlines.

CHAIR AND CEO’S REVIEW

INVESTING IN THE FUTURE

Performance Based Navigation Performance Based Navigation (PBN) plays an integral part in Airways’ commitment to reduce the environmental footprint of the aviation industry. Identified as a number one priority for the International Civil Aviation Association (ICAO) and aviation industry, PBN is a key component of the Civil Aviation Authority’s New Southern Sky (NSS) national airspace and air navigation programme. Airways’ PBN implementation programme is delivering environmental and economic benefits through the reduction of CO 2 emissions, fuel savings and lower aircraft operating costs. With PBN procedures, aircraft follow optimised flight paths, allowing for safer, more predictable flights. Our $9 million programme of work to develop and deploy PBN procedures and technology into our airspace across 17 controlled aerodromes is nearing completion. PBN implementation projects at Napier and Gisborne will conclude in November 2020, the final two of 50 separate projects completed over seven years. During the year PBN procedures were deployed into Christchurch, Nelson and Whenuapai. In November 2018 we partnered with Christchurch Airport, the Board of Airline Representatives New Zealand (BARNZ) and New Southern Sky (NSS) to complete a PBN flight path trial. Another trial commenced in Wellington in September 2018, in conjunction with our partners Wellington Airport, BARNZ and NSS. Trials of PBN flight paths help us to gather information about their environmental and efficiency benefits, and also to fully understand impacts on local residents. PBN procedures in New Zealand airspace are estimated to provide benefits of around $3.6 million per year, including more than $1 million in fuel savings for our airline customers. The improved efficiency has also allowed our airline customers to avoid 4,800 tonnes of carbon emissions and resulted in 76,000 minutes of saved flight time.

INTEGRATING DRONES INTO OUR AIRSPACE

AIRWAYS INTERNATIONAL

SUSTAINABILITY SUSTAINABILITY

AIRWAYS BOARD OF DIRECTORS

FINANCIALS

FINANCIAL PERFORMANCE

PERFORMANCE AND PROGRESS AGAINST SCI METRICS

FINANCIAL STATEMENTS

EVA KEY PERFORMANCE INDICATORS

ADDITIONAL FINANCIAL INFORMATION

GOVERNANCE AT AIRWAYS

Annual savings through PBN

$3.6m in direct benefits $1m of fuel savings for our customers

76,000 minutes of flight time 2m passengers with reduced flight times

4,800 tonnes of CO 2

avoided

Airways Corporation of New Zealand Limited Annual Report 2018 2019

“ W E E S T I M A T E T H A T T H E 1 , 0 0 0 C U P S P U R C H A S E D H A V E T H E P O T E N T I A L T O R E M O V E O V E R 5 0 , 0 0 0 D I S P O S A B L E

Collaborative Arrivals Manager Airways’ Collaborative Arrivals Manager (CAM) is now in its 10th year of creating significant fuel and cost savings, minimising delays and maximising efficiencies across the aviation supply chain. CAM is a web-based flight scheduling manager that allows greater control over the time of arrival and enables airlines to manage their schedules flexibly and responsively. Rather than entering into delay vectoring and contributing to holding congestion, inbound flights schedule their departures to synchronise with available arrival slots. Since it was first introduced in Auckland in 2008 and subsequently rolled out to Wellington and Christchurch in 2009, CAM has achieved: X X 500,000 tonnes CO 2 avoided X X 6% fuel savings per year X X Over 300,000 minutes of inflight delay saved per year. CAM works seamlessly with PBN to achieve efficiencies across Airways’ air traffic services. We will continue to pursue opportunities to reduce the aviation industry’s greenhouse gas footprint through technological advancements and smart ATM.

CHAIR AND CEO’S REVIEW

INVESTING IN THE FUTURE

INTEGRATING DRONES INTO OUR AIRSPACE

T A K E AWA Y C U P S F R O M L A N D F I L L E V E R Y Y E A R . ”

AIRWAYS INTERNATIONAL

SUSTAINABILITY SUSTAINABILITY

AIRWAYS BOARD OF DIRECTORS

FINANCIALS

FINANCIAL PERFORMANCE

PERFORMANCE AND PROGRESS AGAINST SCI METRICS

FINANCIAL STATEMENTS

EVA KEY PERFORMANCE INDICATORS

ADDITIONAL FINANCIAL INFORMATION

GOVERNANCE AT AIRWAYS

Tō tātou poutarāwaho tikanga tokonga roa Our sustainability framework

We have a responsibility to make a positive contribution to the world we live in—for today and for tomorrow. We are committed to succeeding as a business in a socially and environmentally sustainable way that works for us, our people, our communities and for all of New Zealand.

And that’s why we are taking positive action today to shape what the aviation environment of tomorrow looks like. We all have a part to play in achieving this. Your ideas, your actions and your total commitment will ensure that our tamariki and mokopuna can continue to enjoy an exciting and sustainable world of air travel.

Our Contribution Tō tātou takoha

Our Team Tō tātou tira

We support a thriving and successful aviation industry.

Our workplace culture is one of trust, collaboration and achievement.

Aviation connects New Zealanders and our economy to the world, but is changing on all sides. Supporting value creation opportunities for our aviation partners will open possibilities for Airways and other Kiwi businesses. To positively contribute to New Zealand by: X X Helping the industry develop successful and sustainable air transport methods. X X Developing commercially successful products and services that make a positive contribution to New Zealand’s communities, economy and reputation.

Our industry and our business are constantly changing, which will affect our people in many ways.

To prioritise our culture and capability by: X X Being recognised as a great place to work, with a culture of trust, collaboration and innovation. X X Being inclusive, diverse and equitable. X X Supporting our people’s learning and development to stay at the forefront of their fields and tackle new challenges. 1. Engagement and trust levels. 2. Knowledge retention and development. 3. Diversity.

1. Efficiency of aircraft movements. 2. Aviation sector performance and development. 3. Innovation.

Airways Corporation of New Zealand Limited Annual Report 2018 2019

CHAIR AND CEO’S REVIEW

T H I S F R A M E W O R K I S H O W W E ’ L L C H A M P I O N A B E T T E R T O M O R R O W , T O G E T H E R .

INVESTING IN THE FUTURE

INTEGRATING DRONES INTO OUR AIRSPACE

AIRWAYS INTERNATIONAL

Our Communities Ō tātou hapori

Our Footprint Tō tātou tapuwae

SUSTAINABILITY

AIRWAYS BOARD OF DIRECTORS

We shape a safe and sustainable future for our aviation community, to benefit all communities. The demand on our airspace is changing. The growth in small commercial operations and drone use is broadening our community. We need new regulation and procedures to maintain safety and manage the social and environmental impacts. To work collaboratively in enabling our community of airspace users, and related infrastructure providers and operators, to find innovative solutions that: X X Reduce carbon emissions X X Mitigate noise X X Keep our airspace safe X X Develop our future leaders

We achieve zero emissions and zero waste.

FINANCIALS

FINANCIAL PERFORMANCE

Natural resources are being used up faster than they can regenerate, and vital environmental systems are being degraded faster than they can recover. This threatens our standard of living and the wellbeing of future generations.

PERFORMANCE AND PROGRESS AGAINST SCI METRICS

FINANCIAL STATEMENTS

To be a leader in environmental responsibility by: X X Smart design choices. X X Relentlessly pursuing energy and fuel efficiency. X X Offsetting greenhouse gas emissions we can’t eliminate. X X Ensuring all materials used are recovered, repurposed or recycled at the end of their service life.

EVA KEY PERFORMANCE INDICATORS

ADDITIONAL FINANCIAL INFORMATION

GOVERNANCE AT AIRWAYS

1. Safety. 2. Noise mitigation. 3. Carbon emissions from air transport.

1. Carbon emissions. 2. Operational waste. 3. Materials management.

Board of Directors

DEN I SE CHURCH CHA I R QSO

MARY- JANE DALY DEPUTY CHA I R BCOM , MBA , CM I NSTD

Denise was appointed as Chair of the Airways Board in January 2019, bringing a wide range of governance and management experience. She is a Chartered Fellow of the Institute of Directors and has been Chair of the Institute of Environmental Science and Research (ESR) since July 2015. Denise is a board member of Predator Free Wellington Ltd, trustee of the South Youth Foundation, president- elect for Rotary Club of Wellington, and a director and shareholder of Leadership Matters Limited. Denise was Chief Executive of the Ministry for the Environment from 1996 to 2001. She has previously served on the Health IT Board, the Science Board, the Boards of Karori Sanctuary Trust, Ako Aotearoa, FRST, Landcare Research, and the Wellington Zoo Trust. In 2002 Denise was appointed as a companion of the Queens Service Order.

Mary-Jane was appointed to the Airways Board in May 2014. She is a Director of Auckland Transport, Kiwi Property Group, Onepath Life (NZ) Limited and Cigna Life Insurance New Zealand Limited. Mary- Jane is also the Deputy Chair of the Earthquake Commission and Trustee of the Mark Daly Trust. Mary-Jane has a strong background in insurance and banking, having held a range of roles in New Zealand and the United Kingdom. She has led significant business units in large organisations and also has extensive financial and risk skills from a variety of contexts. As well as her management experience in the corporate sector with Fonterra and IAG, Mary- Jane has held positions at the Bank of New Zealand and National Australia Bank and Toronto-Dominion Bank in London. Mary-Jane holds a Bachelor of Commerce from Canterbury University and an MBA from City University in London.

Airways Corporation of New Zealand Limited Annual Report 2018 2019

DAR I N CUSACK Darin was appointed to the Airways Board in April 2018. He is a Director of Absolute Solutions Group Limited and brings senior leadership experience in the aviation and transport sectors spanning three decades. Most recently, Darin led the Pacific Aviation Investment Program for the World Bank across five countries and reforming the Pacific Aviation Safety Office. Bringing operational and commercial acumen, Darin provides clear strategic direction, supported by strong processes. He has held chief executive and senior executive roles across airport, air traffic, aviation security and airline organisations throughout New Zealand and Tonga and is a member of the Institute of Directors. Darin has a focus on continual improvement, strengthening relationships, and the provision of safe and secure operations. JOHN HOLT John was appointed to the Airways Board in January 2019. He is the founder of Technology and Innovations New Zealand (TAINZ) and co- founder of internet business start-ups Sonar6 (sold to US company Cornerstone in 2012) Homes.co.nz. His current directorships are with Technology and Innovations New Zealand Ltd, Anchorage Services Ltd, Crema Holdings Ltd, Technology and Innovations Ltd, TMH Property Ltd, TAINZ Ventures Ltd, Cloud Cannon Ltd, Kiwi Landing Pad Ltd, and Mobi2Go Ltd. He is also the Regional Chairperson for Bank of New Zealand and an Investment Committee Member for Return to Science. John has a Bachelor of Arts degree in Military History and a Postgraduate Diploma in Business Administration. He has had a lifelong interest in aviation and is a flying member of the Wellington Aero Club and Canterbury Aero Club. Paula Jackson was appointed to the Airways Board in January 2019. She is a Member of the Institute of Directors (MInstD) and was selected for the Mentoring for Diversity programme in 2017. Paula is a director for Quotable Value NZ Ltd, Collect Limited and Who’s on Location Ltd, where she is also Chair, and a trustee for Wellington Culinary Events Trust. She is also the director of her own consulting business Paula Jackson Consulting Limited, where she provides marketing, advisory and mentoring expertise to predominantly technology and Software as a Service (SaaS) organisations. Paula’s career spans 25 years in marketing, holding leadership and PAULA JACKSON M I NSTD

general management positions at ANZ, Telecom (Spark), Vodafone and Xero. Paula began an MBA at Otago University in 2019. L I SA JACOBS BCOM , LLB , CA , CM I NSTD Lisa Jacobs was appointed to the Airways board in November 2018. She brings a strong legal, financial and risk management focus to the role. Lisa is the Chief Executive Officer of national law firm Anthony Harper and has extensive experience in the professional firm environment and investment management sector, where she has held both senior executive and board roles. Lisa holds a Bachelor of Commerce and a Bachelor of Laws from the University of Auckland, is a Chartered Accountant, and a Chartered Member of the Institute of Directors. Bennett was appointed to the Airways Board in November 2015. He is an avid aviator and mariner who has a strong belief in technology as an enabler for change, transformation and competitive advantage. He was founder and previously the Chair of The Simpl Group of technology companies. Bennett is currently the Chair of Preno, a global software start- up offering a modern hotel management system for boutique properties, and a director of Medary Services Limited. Mark joined the Airways Board in November 2015. He has 25 years’ experience as a pilot, initially as an international military pilot and later as a domestic airline pilot instructor. He holds directorships with Quinn International Ltd. G & M International Investments Pty Ltd and Airwork Holdings Ltd. Mark was the Chief Executive of Air New Zealand subsidiary Mount Cook Airline, Managing Director and Chairman of Virgin Samoa and, most recently, Managing Director and Chief Executive of Virgin Australia New Zealand. Mark has also served as a director on a number of boards, including Virgin Australia New Zealand and the Board of Airline Representatives New Zealand Incorporated (BARNZ). BENNETT MEDARY BCOM , PMP, I I TP, M I NSTD MARK P I TT BSC , ATPL

CHAIR AND CEO’S REVIEW

INVESTING IN THE FUTURE

INTEGRATING DRONES INTO OUR AIRSPACE

AIRWAYS INTERNATIONAL

SUSTAINABILITY

AIRWAYS BOARD OF DIRECTORS

FINANCIALS

FINANCIAL PERFORMANCE

PERFORMANCE AND PROGRESS AGAINST SCI METRICS

FINANCIAL STATEMENTS

EVA KEY PERFORMANCE INDICATORS

ADDITIONAL FINANCIAL INFORMATION

GOVERNANCE AT AIRWAYS

Financial statements 2018 2019

Airways Corporation of New Zealand Limited Annual Report 2018 2019

CHAIR AND CEO’S REVIEW

INVESTING IN THE FUTURE

INTEGRATING DRONES INTO OUR AIRSPACE

AIRWAYS INTERNATIONAL

SUSTAINABILITY

AIRWAYS BOARD OF DIRECTORS

FINANCIALS

FINANCIAL PERFORMANCE

PERFORMANCE AND PROGRESS AGAINST SCI METRICS

FINANCIAL STATEMENTS

EVA KEY PERFORMANCE INDICATORS

ADDITIONAL FINANCIAL INFORMATION

GOVERNANCE AT AIRWAYS

Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76

Made with FlippingBook - Online Brochure Maker