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Chairman's report

Chairman John Weber Chairman John Weber
The 2019-20 reporting period has been both historical and unique, a true exemplar of the notion that every great challenge brings equal opportunity.

Events such as a devastating bushfire season and the rapid spread of the COVID-19 pandemic across the globe will ensure this year is long remembered as a watershed moment for our organisation, the aviation industry and the nation we serve.

Just 12 months ago, a significant focus of the Airservices strategy was preparing for steady long-term growth in the commercial airline industry, with passenger movements expected to double by 2040.

Of course, these forecasts have now fundamentally shifted. As part of a suite of measures to manage the COVID-19 pandemic, Australia’s international borders have been closed since March 2020, and at the time of writing were expected to remain shut until at least 2021. The states and territories have also introduced various domestic border closures and restrictions on movement. For the most part, the people of Australia are staying close to home.

The resulting 58.5 per cent decrease in traffic in Quarter 4 2019-20 compared to Quarter 4 2018-19, has had an immediate and devastating impact on our airline customers. Although an eventual return to the previous growth trajectory is expected, it may take some years given reduced discretionary spending and demand for business travel.

Therefore, it is essential Airservices continues its preparations for the future, even as we manage the immediate disruption. It is clear we have a leading role to play in supporting the recovery of the commercial airline industry as well as facilitating safe and efficient growth over the longer term.

Delivery of OneSKY, Australia’s harmonised civil and military air traffic management system in partnership with Defence, remains on track. This world-leading program is expected to unlock more than $1.2 billion in economic benefits for our customers and the aviation industry over the next 20 years.

Meanwhile, the very factors that have brought such significant disruption to one part of the industry are creating opportunity elsewhere.

The COVID-19 pandemic has only amplified demand for the services that could be provided by autonomous vehicles. One such forward-looking scenario is a drone delivering food and medical supplies to a person in mandated quarantine; another is where the risk of transmission during an outbreak is high, an essential worker travels to and from their workplace via unmanned aerial taxi rather than risk mass public transport.

Our work to integrate these new entrants into Australia’s airspace continues at pace and will grow in focus over the next 12 months and beyond.

We also recognise the need to exercise exceptional financial stewardship as we work to deliver value to our customers, particularly amidst the current challenges. We have been continually improving the efficiency of our operations since 2016, culminating in our announcement on July 1 2019 of a 2 per cent reduction in airways service charges.

Early in the current reporting period we also returned a $200m capital repayment to our shareholder, the Australian Government, for the benefit of the wider Australian community.

I am privileged to present the Airservices 2019-20 Annual Report. While the challenges of the past 12 months have been undeniable, we have risen to the occasion and stand ready to support the industry during its recovery from the impacts of the COVID-19 pandemic, and on the journey to the safe, efficient and prosperous future that lies beyond.

JOHN WEBER

Chairman