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Our key performance indicators

Safety performance

We are committed to keeping our skies and our people safe as the aviation industry faces ongoing disruption and increasing complexity. In 2019-20 we continued to provide Australia’s aviation industry with world-class standards of safety.

Safety Performance

KPI Results

2017–18

2018–19

2019–20

Result

Result

Target

Result

Significant Attributable Safety Occurrences

Air Navigation Services (ANS)

Any loss of separation or runway incursion where the Risk Assessment Tool score is Category A.

0

0

0

0

Aviation Rescue Fire Fighting Services (ARFFS)

Any aircraft incident on a runway in which the response did not meet the regulated response time of three minutes.

0

0

0

0

Lost time injury frequency rate (LTIFR)

A lost time injury is an occurrence that resulted in time lost from work as one day or shift, permanent disability or fatality. The rate measures the number of lost time injuries per million hours worked.

4.6

4.0

<1.5

2.3

Source: Airservices Corporate Plan 2019–20, p29.

Analysis

For the fourth year in a row, we achieved our target of no significant attributable safety occurrences recorded for our air navigation and aviation rescue and fire fighting services.

Our LTIFR decreased by 42.5 per cent year-on-year, continuing its positive trend downwards over the past five years. Although higher than target, this was a noteworthy outcome given our substantial involvement in fire fighting operations as part of the co-ordinated national bushfire response.

Our performance against these indicators demonstrates that we continue to strive to be safe and secure.

Achievements

  • Completed testing of drone surveillance technologies at our 29 air traffic control towers as part of our work to integrate new entrants into our airspace, safely and efficiently.
  • Responded to more than 80 requests for mutual aid from state and territory fire agencies during the bushfire season, including assisting at various state incident control centres and redeploying crews and vehicles to support state and territory fire services. We also managed over 26,600 extra flights in November and December 2019 compared to the same period in 2018.
  • At the onset of the COVID-19 pandemic, we moved quickly to protect the health and safety of our workforce and the integrity of our operations. This included segregating operational staff, transitioning nearly one-third of our workforce to remote working arrangements at short notice and implementing resilience rostering.

Case study—An agile approach to managing the COVID-19 pandemic disruption

The onset of the COVID-19 pandemic in Q3 of this year, and the resulting decrease in air traffic as a result of efforts to contain the spread of the virus, has substantially disrupted the global aviation ecosystem.

The disruption to air travel, domestically and globally, resulted in Airservices revenue falling by 24 per cent in 2019–20. The initial wave of the COVID-19 pandemic in the April–June quarter resulted in an 80 per cent decrease in revenue year-on-year. Overall, traffic for 2019–20 decreased by 13.5 per cent year-on-year, with the greatest impact in Q4, when customer traffic reduced by 58.5 per cent.

Our foremost priority in response to the COVID-19 pandemic has been to protect both the continuity and integrity of our operations and the health and safety of our people. We moved quickly to adopt a suite of measures to achieve both, including restricting access to operational areas, transitioning over 1000 employees to work remotely, and moving our operational staff to flexible resilience rosters.

We have also been proactive in managing the financial impact of the COVID-19 pandemic on our organisation, reviewing our operating costs and refocusing our investment program to prioritise the delivery of OneSKY and its enabling projects. These activities yielded savings of $30m in the final quarter and are expected to deliver $100m in savings in 2020–21.

Our proactive response to the COVID-19 pandemic is positioning us to continue to do what we do best, supporting our industry and providing continued safe access to those who use our skies. We are cognisant that the path to recovery for our customers is highly uncertain, so it is essential we provide an optimal level of support as the industry faces this ambiguous recovery phase.

Industry outcomes

As the air navigation service provider responsible for 11 per cent of the global airspace, we are uniquely positioned to work with our customers, the broader industry, government and our regional neighbours to support the industry in turbulent times.

Industry Outcomes

KPI Results

2017–18

2018–19

2019–20

Result

Result

Target

Result

Arrival airborne delay (highvolume operations)*

The median (and 75th percentile) excess time incurred during the arrival airborne phase of flight in reference to the estimated time of arrival for high-volume operations. Brisbane, Melbourne, Perth and Sydney are defined as high-volume operating environments.

Median (minutes)

0.6

0.7

0.6

0.9

75th percentile (minutes)

3.5

3.8

3.3

4.3

Customer satisfaction*

≥70%

On Hold

Industry advocacy score

Prior to 2019–20 we measured our customer advocacy as determined by the net promoter score.

-36

-25

*Source: Airservices Corporate Plan 2019–20, p29

Analysis

Results for both the median and 75th percentile arrival airborne delay were higher than target, at 18 seconds and 1 minute respectively. This result reflects challenging environmental conditions at various times throughout the year, including significant weather events and smoke from the bushfires reducing visibility, leading to delays and flight diversions. Ongoing infrastructure works at major airports at times compounded delays during busy periods.

Given the intense disruption across the industry caused by the COVID-19 pandemic, we have deferred the annual customer satisfaction survey as we focus on working with our customers to ensure their needs are met during the recovery period and beyond.

Our performance against these indicators demonstrates that we continue to strive to be valued and accountable.

Achievements

  • Introduced price reduction of 2 per cent for airways service charges on 1 July 2019.
  • Supported the commissioning of two new runways at Brisbane and Sunshine Coast Airports through airspace design and other infrastructure requirements, including the completion of a new fire station at Brisbane Airport. These are critical projects to support South-East Queensland’s long-term economic growth.
  • As part of our Airspace Modernisation Program, two airspace change proposals came into effect on 21 May 2020. The changes include lowering Class E airspace nationally and approval to conduct a twelve month trial of Class E steps at Ayers Rock. These changes will help to facilitate safer access to our airspace for all users.
  • Completed contingency operation trials and the national deployment roadmap for the Digital Aerodrome Services, which will enhance service delivery and resilience and improve safety outcomes.

Case study—Support of co-ordinated bushfire response

The 2019-20 bushfire season was devastating for the Australian community. By November 2019, there were numerous fires nationwide, including two mega-fires, one of which was the largest bushfire ever recorded in Australia. These events led to the largest co-ordinated deployment of state, Commonwealth and international fire and emergency personnel in our nation’s history.

Airservices was proud to support these efforts. We committed 17 specialist fire fighting vehicles and approximately 210 frontline fire fighters, or 22 per cent of our personnel, from across Australia. Our people were embedded in multi-agency incident management teams and control centres, which were responsible for fire control and recovery in Eastern Victoria.

Our air traffic controllers kept our skies safe, managing over 26,600 extra flights in November and December 2019 compared to the same period in 2018. This was amidst the challenging environmental conditions created by the bushfire season, with thick smoke and explosive storms frequently disrupting flight operations. In addition, 500 aircraft engaged in aerial fire fighting operations across Australia, adding to the complexity of the situation.

The various state and Commonwealth agencies involved in the response praised the effectiveness and professionalism of our fire fighting teams. Most importantly, our people remained safe throughout these efforts, with no significant injuries reported.

Business operations efficiency

As the aviation industry navigates a period of intense disruption, it is more important than ever that we maintain our focus on the efficiency and effectiveness of our operations. We are accelerating our automation and digitisation to optimise safety, service delivery and cost efficiency for our customers now and into the future.

Business Operations Efficiency

KPI Results

2017–18

2018–19

2019–20

Result

Result

Target

Result

Productivity

The total operating cost per instrument flight rules (IFR) flight hour ($/hour)

$325

$332

$347

$367

Source: Airservices Corporate Plan 2019–20, p29

Analysis

Our cost per instrument flight rules (IFR) flight hour is unfavourable to target, driven by the significant reduction in air traffic from March 2020 due to the COVID-19 pandemic. The cost reductions in the last quarter of $30m (3 per cent) could not match the steep reduction in IFR flight hours of 0.4m hours (17 per cent).

Our performance prior to March 2020 was favourable to target, with an average cost of $339 per IFR hour.

Our performance against this indicator demonstrates that we continue to strive to be valued and accountable, and efficient and commercial.

2019-20 Monthly Cost per IFR Flight Hour Trend ($) 2019-20 Monthly Cost per IFR Flight Hour Trend ($)

Achievements

  • Implemented a program of rigorous cost savings in response to the financial impacts of the COVID-19 pandemic on the industry. The various initiatives saved us $30m in the final quarter of the year and will remain in place for the foreseeable future, with further measures to be introduced.
  • Completed a digital simulation prototype of our air traffic network, which will improve the overall efficiency of the flight network when operational.
  • Made significant progress in the OneSKY Program, which will enhance the efficiency of our air traffic resources and improve safety outcomes in the years to come, including:
    • completing the preliminary design review on the Civil and Military Air Traffic Management System (CMATS) platform.
    • progressing construction on the Air Traffic Service Centres (ATSCs) in Brisbane and Melbourne.

Case study—Australia's future air traffic management system-OneSKY

Despite the disruption of 2019-20, work on the OneSKY Program continued at pace–bringing Australia closer to its air traffic management system of the future.

CMATS successfully passed the Preliminary Design Review in December 2019, clearing the way for an early release at four military sites and a new Joint Software Support Facility at our Melbourne centre.

Construction on the new Air Traffic Services Centres ATSCs) required to house CMATS in Brisbane and Melbourne has progressed well, with Thales Australia granted access to the new Melbourne ATSC in July 2020. Design of the Perth ATSC has also concluded.

A new Contractor System Verification Facility was completed this financial year, for use in the development, testing, training and acceptance of CMATS.

Finally, design has commenced on a new regional tower solution with the appointment of Saab to evolve the Integrated Tower Automation Suite, which is in use at major national aerodrome towers. This solution will be leveraged to upgrade four Australian Defence Force air traffic control towers.

OneSKY remains on track to deliver an estimated $1.2 billion of economic benefits to the industry over a 20-year period.

OneSKY's estimated benefits to the industry OneSKY's estimated benefits to the industry

Organisational capability

An engaged workforce is fundamental to delivering our services to a standard of excellence and supporting the industry’s future requirements. We are committed to building a culture of care, trust and accountability for our people as we lead the aviation industry through its recovery and beyond.

Organisational Capability

KPI Results

2017–18

2018–19

2019–20

Result

Result

Target

Result

Employee engagement index

Expressed as a percentage of satisfaction.

Pulse Survey Conducted

47%

>2018–19 result

Independent Review*

73%

Inclusion index

Expressed as a percentage of the extent to which employees feel that the work environment is inclusive of all employees.

Pulse Survey Conducted

38%

>2018–19 result

Independent Review*

62%

Source: Airservices Corporate Plan 2019–20, p29

Notes:

* A thorough independent cultural review was conducted, therefore our usual internal survey was not conducted this year.

** The methodology for the KPIs was adapted from a 5-point to a 7-point scale. This change enabled a more accurate analysis to identify opportunities and improvements, and better aligned with comparative industry benchmarking.

Analysis

In May 2020, we released the report A Review of Culture at Airservices Australia, following a broad and independent review of our workplace culture undertaken by Elizabeth Broderick & Co.

The report was prepared following extensive consultation with our people over the previous nine months, including the administration of an organisation-wide survey. Our people also participated in focus groups, interviews and provided written submissions.

The review team found a number of positive elements of our culture, including our commitment to a strong safety culture, the commitment of individuals to the jobs they perform, and the contributions they make daily to aviation safety.

However, the review team also found there are distinct areas of culture that require immediate action and reform.

Given the comprehensive nature of this review, we did not conduct the regular Employee Opinion Survey this year.

Our commitment to our people ensures we are safe and secure, valued and accountable, efficient and commercial, agile and innovative.

Achievements

  • Committed to a comprehensive action plan in response to the independent review to drive the necessary reform of our culture. By the end of the reporting period a number of these actions had been achieved or substantially progressed, including:
    • establishing a Culture Reform Board to oversee the implementation of our commitments
    • launching a communications campaign to educate our people on the nature and impacts of unacceptable workplace behaviour
    • undertaking the design work on Airservices Safe Place–an independent unit designed to provide our people with a compassionate and human-centred response to negative workplace behaviours.
  • Appointed a Chief People and Culture Officer to strengthen and support our Executive team.
  • Established a dedicated Culture Program to drive longer-term cultural reform.
  • Early in the COVID-19 pandemic, we moved our operational workforce to resilience rosters and the majority of our support functions to work remotely.
  • Sustaining our focus on the health and wellbeing of our people during the COVID-19 pandemic, including conducting Weekly Wellbeing Checks of the workforce to gather data and shape the right support mechanisms for employees and their immediate families.

Case study—Our commitment to deliver a safe, diverse and inclusive workplace

In May 2020, Airservices released the report A Review of Culture at Airservices Australia, following a broad and independent review of our workplace culture undertaken by Elizabeth Broderick & Co. This report and our subsequent response have been the catalyst for significant change across our organisation.

Prior to the publication of the report, we had already undertaken a number of key steps to address unacceptable behaviours in our workplace and drive sustainable cultural reform. These included a renewed focus on culture, values and leadership; introducing a standalone Bullying, Harassment and Discrimination Policy; and the appointment of a Chief People and Culture Officer.

We have since added several development programs to strengthen the capabilities of our leadership cohort and have defined a leadership standard, against which all leaders will be assessed on a regular basis.

Our newly established Cultural Reform Board will monitor our implementation of these commitments and we are regularly engaging with our people to update them on our progress.

Financial stewardship

Our rigorous focus on financial stewardship in the current operating environment ensures our resilience and readiness to support the industry’s recovery and future growth. We are investing in infrastructure that will deliver value to our customers, while accommodating volatility safely and efficiently.

Financial Stewardship

KPI Results

2017–18

2018–19

2019–20

Result

Result

Target

Result

Net Profit After Tax (NPAT)

Net profit after tax

$74.5m

$62.4m

$55.7m

-$25.0m

Return on assets (RoA)

Airservices annual earnings as a percentage of assets

8.5%

8.2%

5.9%

-1.3%

Source: Airservices Corporate Plan 2019–20, p29

Analysis

Our financial results were deeply impacted by the measures introduced by governments in response to the COVID-19 pandemic, including domestic and international border closures, and the subsequent 91 per cent reduction in revenues from the limited air traffic operations in the final quarter.

We recorded a net loss after tax of $25.0m which represents a return on average equity of -4.0 per cent, compared to the planned target of 8.1 per cent. Return on regulated assets was also negative at -1.3 per cent compared to the planned target of 6.9 per cent. Prior to the COVID-19 pandemic, while there had been some softening of international airways activity in the first half of the year, we had anticipated making a net profit after tax of $21.8m against the target of $55.7m.

Our revenue from flight charges was $270.7m (or 24 per cent) lower than the target for the year. The Australian Government provided relief to the Australian aviation industry through this time, and we received $250m for the 2019-20 financial year which enabled us to waive $92.5m in charges for domestic aircraft operations and offset some of our revenue loss to ensure we continued to provide critical air traffic and aviation rescue and fire fighting services.

Our performance against these indicators demonstrates we continue to strive to be efficient and commercial.

Achievements

  • Despite these challenges, we took a number of steps to ensure our immediate and long-term financial sustainability, including:
    • identifying savings of $30m in the final quarter of the year
    • against these savings, recording a non-cash provision for doubtful debts of $22.3m for outstanding international debts at the end of the year.
  • Early in the reporting period, we returned a $200m capital repayment to our shareholder, the Australian Government, for the benefit of the wider Australian community and we reduced our prices by 2 per cent for the benefit of the whole aviation industry.
  • Invested $295m in new capital assets to support two new runway openings, a new fire service at Whitsunday coast, and in the delivery of Civil & Military Air Traffic Management System (CMATS)–demonstrating our commitment to supporting the recovery and long-term growth of Australian aviation, despite the current challenges.
  • Waived $3.5m in annual charges for Australia’s not-for-profit aeromedical providers, which provide vital services in regional and remote Australia.