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W20787

AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED: TALENT


MANAGEMENT

Albert Wöcke and Hayley Pearson wrote this case solely to provide material for class discussion. The authors do not intend to illustrate
either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying
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Thomas Kgokolo, the interim chief executive officer of Air Traffic and Navigation Services SOC Limited
(ATNS), sat at his desk at the ATNS head office near O. R. Tambo International Airport in Johannesburg,
South Africa. It was October 2019, and Kgokolo was preparing for a board meeting, where he was to report
on the risks facing ATNS. Lulekwa Ngcwabe, ATNS’s human resources executive, had raised concerns
about the long-term impact of the current ATNS talent management system. Ngcwabe pointed out to
Kgokolo that there had been an increase in the number of resignations of mid-career air traffic controllers.
It took many years of training to build the highly specialized skills of air traffic controllers, and the demand
for these skills would increase in the future as ATNS introduced new technology. In addition, the
management of the service relied on experienced air traffic controllers to manage and train other air traffic
controllers. Kgokolo looked at the key performance indicators of the talent pipeline and noticed that 17 air
traffic controllers had left in the past year, and all had stated that they left for career advancement elsewhere.
Was this a problem and a future risk that he should be concerned about?

ATNS had built a highly successful talent management system over the last two decades and was able to
provide world-class service to airlines that visited South African airports. ATNS enjoyed international
accreditation, and it trained air traffic controllers for governments across Africa. ATNS graduates were
found at most international airports across the globe. In addition, ATNS was a model employer when it
came to recruiting people from rural communities in South Africa, who were generally poor and lacked
many basic facilities such as water and electricity. These communities were also wracked by poor schooling
outcomes and insufficient health infrastructure; therefore, the South African government, ATNS’s
shareholder, prioritized recruiting future talent from these areas.1

AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED

In 1993, ATNS was founded as a stand-alone entity of the Department of Transport. In 2019, ATNS
managed more than one million aircraft movements across South Africa. An aircraft movement was defined

1
For more detailed information on South Africa’s development, see United Nations Development Programme, Human
Development Report 2019, South Africa, accessed March 11, 2020, http://hdr.undp.org/en/countries/profiles/ZAF.

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as either a landing on or a takeoff from an aerodrome.2 The South African government was ATNS’s sole
shareholder through the Minister of Transport, and ATNS was expected to align its objectives with the
South African government’s objectives (see Exhibit 1). ATNS was expected to comply with not only South
African regulations but also international civil aviation regulations, technologies, and best practices,
including the operation of international satellite communication and navigation systems that operated at an
average of more than 35,000 feet above sea level.

ATNS established the Aviation Training Academy (ATA) in 1997 and upgraded its facilities and services. By
2019, it was providing air traffic, navigation, and training services for countries across Africa and services for
flights across large parts of the southern Indian Ocean and the Atlantic Ocean (see Exhibits 2 and 3). ATNS
covered approximately 10 per cent of the world’s airspace and managed traffic at 21 South African airports,
including O. R. Tambo Airport in Johannesburg and Cape Town International Airport. ATNS also provided
additional services, such as the design and verification of flight procedures as well as airspace development,
navigation plans, and cartography services. ATNS managed international satellite communication and
navigation systems in the African Indian Ocean region and provided technical and engineering support to other
countries in Africa and the Middle East. ATA was an International Air Transport Association regional training
partner and trained air traffic controllers for Ghana, Angola, Seychelles, and Nigeria, among other countries.

ATNS had four strategic objectives: to continuously improve ATNS’s safety performance, to become a
transformative organization that invested in its people, to provide efficient air traffic management solutions
and associated services to meet the needs and expectations of the ATM community, and to play a leading
role in the development of air traffic management on the continent and in selected international markets
while maintaining long-term financial stability.

ATNS had revenues of approximately US$100 million3 in 2019, with $19 million in profit after expenses.
Revenues were derived primarily from airlines billed for using ATNS’s services; additional revenue came
from airport fees and fees charged for services such as navigation information, weather information, and
training for third parties. Staff costs, which amounted to about $64 million, made up more than 70 per cent
of annual expenses.

THE AIR TRAFFIC CONTROLLER PROFESSION

More than half of ATNS’s staff consisted of air traffic controllers. Air traffic control officers (ATCOs)
were responsible for managing air traffic in the region and at airports. Their tasks included informing pilots
about nearby aircraft, weather patterns, and potential visibility hazards; authorizing and issuing instructions
for takeoff and landings; accepting and transferring control of flights to and from other control centres; and
intervening in emergencies to provide alternative flight paths or landing directions.

ATCOs required expert knowledge of the many advanced technologies and systems needed to do their jobs,
including advanced technologies and oceanic procedures, automated radar terminal systems, and other
flight control software. ATCOs had to possess extensive knowledge of safety, security, and aviation
transportation (see Exhibit 4). An ATCO required active listening and speaking skills and the ability to
exercise critical thinking, good judgment, and rapid decision-making. An ATCO at a busy airport would
have to exercise complex problem-solving multiple times during their shift.4 ATCOs needed to be able to

2
An aerodrome was any place where air traffic occurred, which included small airfields and large international airports.
3
All dollar amounts are in US dollars.
4
“Summary Report for: 53–2021.00 – Air Traffic Controllers,” O*NET OnLine, accessed August 15, 2019,
www.onetonline.org/link/summary/53-2021.00.

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do spatial scanning, movement detection, image and pattern recognition, prioritization, inductive and
deductive reasoning, and visual and verbal filtering, as well as possess good short- and long-term memory
and high levels of mathematic and probabilistic reasoning.5

The ATCO job position was generally regarded as stressful due to the complexity of the job and the need
to make quick decisions despite having extensive procedures in place. In larger airports, the workload
increased when there were more aircraft movements (landing, taking off, or flying over), and decisions had
to be made instantly. ATCOs were also exposed to stress during “critical incidents,” which occurred, for
example, when aircraft flew too close to one another. Research showed that these critical incidents caused
stress reactions in ATCOs due to the potential loss of life or serious injury that could have occurred. 6
Another factor contributing to the stressful situation was working during busy shifts, often at nighttime, and
having to continuously function at a high cognitive level throughout the shift. The stressors were largely
due to the paradox of the ATCO job requiring high levels of responsibility but also being subjected to a
high degree of external control. This stress was shown to lead to different outcomes, depending on the
personal characteristics of the individual, including anxiety, sleeping problems, and fatigue. In the worst
cases, the job could lead to burnout.

ATCOs at South Africa’s busiest airport worked six-hour shifts up to a maximum of 144 hours per month.
During a shift, an ATCO would work for an hour, followed by a break of about 30 to 60 minutes. They
would then take up a position again for another hour, followed by another break of about 30 to 60 minutes.
This sequence would be followed for the duration of the shift. Shifts were designed in this way to manage
the stress that ATCOs faced in larger airports; for example, O. R. Tambo Airport in Johannesburg would
experience 53 movements (i.e., landings and takeoffs) in an hour at peak times during the morning, midday,
and early evening. In the summer months, this was complicated by the weather and large thunderstorms.

Smaller airports would generally operate at more limited hours than the large international airports, and ATCOs
stationed at smaller airports would work eight-hour shifts, up to 160 hours per month. According to Sandile
Malinga, the chief operating officer at ATNS, shift management at the large airports was further complicated by
international regulations that required ATCOs to have eight days off in a 28-day cycle as well as a minimum of
10 hours off after each shift. ATCOs were also required to take 24 hours off following a night shift.

Stress management at ATNS consisted of an employee wellness program, provided by a highly regarded
firm that specialized in such programs, and a critical incident support structure, in which a peer support
system would kick in when a critical incident occurred. This was in accordance with international best
practice and aviation regulations.

RECRUITMENT

Following South Africa’s apartheid, the South African government required that workplaces represent the
country’s ethnic demographic and that its enterprises contribute to uplifting indigent communities. Kgokolo
proudly looked back at ATNS’s track record in developing young black7 talent—in particular, black female
5
Giovanni Costa, “Occupational Stress and Stress Prevention in Air Traffic Control” (working paper, International Labour
Office, Geneva, 1996), accessed August 15, 2019, www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/---
safework/documents/publication/wcms_250120.pdf.
6
Ibid.
7
In the South African Employment Equity Act of 1998, black referred to South African citizens who were “Africans, Coloured,
and Indians.” The Employment Equity Act required firms to implement measures, including affirmative action measures, to
redress the ethnic imbalances caused by South Africa’s history of apartheid (racial segregation). See Republic of South Africa,
Employment Equity Act 55 of 1998, Government Gazette 400, no. 19370 (October 19, 1998),
www.gov.za/documents/employment-equity-act.

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talent. When it was formed in 1993, ATNS was dominated almost exclusively by white males; however,
through managing talent and targeted recruitment, ATNS had transformed itself to largely reflect the
demographic profile of South Africa by 2019. ATNS had a staff complement of about 1,300, of which more
than 70 per cent were black and about 45 per cent were female. ATNS had exceeded its hiring targets for
black employees but was lagging slightly behind in reaching its targets for female staff. In management,
specifically, more than 90 per cent of staff were black.

ATNS recruited ATCOs through a bursary program that predominantly recruited black female candidates
from underprivileged backgrounds across South Africa (see Exhibit 5). Successful candidates were
recruited directly upon completion of high school to join ATNS. ATNS would pay all of the candidates’
training costs and salaries until they qualified as an ATCO1—the first level of ATCO.

ATNS referred to these candidates as “Bursars” because they would be awarded full bursaries (or scholarships)
by ATNS to become ATCOs. Bursars were selected based on candidates’ performance in mathematics and
English, and the outcome of aptitude and personality tests. The successful candidates then had to complete a
19-week course on aviation theory. The course had 15 assessments, and candidates had to maintain a minimum
pass rate of 70 per cent across all of the assessments. Upon completion of this course, candidates were enrolled
in an air traffic services officer (ATSO) course, which included practical on-the-job training and English
language proficiency assessments. After three to six months, the candidates would complete a further series
of courses at ATA. These courses were highly intensive and therefore restricted to no more than six participants
at a time. Upon completion of all the required courses and practical experience (a minimum of one year),
candidates were nominated for the Aerodrome Control course, which lasted 10 weeks. Following that course,
candidates had to complete another 200 hours of live interaction with aircraft and successfully pass another
practical assessment. Candidates were then medically assessed for eyesight, hearing, and blood pressure
before achieving ATSO validation. Successful bursars were offered 18-month fixed-term contracts that could
be converted to full employment contracts if they successfully qualified as ATCOs. The ATSO would then
have to complete another year of practical experience and more specialized courses before qualifying as an
ATCO1. The whole process would take about two years.

Malinga wondered if this approach to recruiting straight out of high school was causing a potential problem
for ATNS’s talent management:

We don’t recruit anybody out of university, and when they join us they are 18 or 19 years old. It is
quite possible that we are the only employer that they will ever work for. Bursars will work for us
for about 40 years[,] and they earn a good salary immediately, which increases substantially upon
qualification and then again with accumulated years of service.

THE AIR TRAFFIC CONTROLLER CAREER PATH

Promotion to an ATCO, as well as further progression, required a combination of technical training, on-
the-job training, and experience. These were all accompanied by rigorous assessments, most of which
required actually performing the task and managing the appropriate technology. An air information
management officer (AIMO)—essentially a trainee—represented the first level of an air traffic official.
Upon completion of several courses, the AIMO would be promoted to an ATSO. An ATSO was essentially
an ATCO in training; upon qualification, the ATSO would become an ATCO. There were three ATCO
levels, and progress across the levels was dependent on successfully completing the required courses and
hands-on experience at the appropriate levels.

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The higher the level, the more complex the tasks were that an ATCO had been trained to manage. The most
complex tasks were those that required advanced technology and experience. The first level of ATCO, ATCO1,
primarily managed aircraft in the near vicinity of airports. After several years, ATCO1s could decide whether to
qualify as an ATCO2 or ATCO3. ATCO2s were qualified to assist and direct aircraft through procedures rather
than surveillance. Therefore, ATCO2s were usually based at smaller airports. ATCO3s were qualified on highly
sophisticated equipment and managed aircraft over long distances. ATCO3s were expected to be able to visualize
aircraft in multi-dimensional spaces by location, speed, and time; project future positions of these aircraft; and
plan desirable routes for the aircraft. These skills were essential in the prevention of aircraft collisions and
maintaining expeditious flow of air traffic. ATCO3s were also key in search and rescues, when necessary.
Qualification as an ATCO3 could take another eight years of training and experience. This career track created
a dilemma for ATCO1s, as an ATCO1 explained:

An ATCO1 is an aerodrome controller, and one can do that as a career; however, if I want to be
promoted, I have to go learn to do something else, which is either an ATCO2 or ATCO3. As an
ATCO2, I will most probably leave Johannesburg and be based at a small aerodrome, and I would
lose out on allowances paid to ATCOs at busier aerodromes. These allowances are substantial, and
I earn more than an ATCO2 without allowances. If I wanted promotion but wanted to stay in
Johannesburg, I would have to complete the ATCO3 course and leave the tower, which I enjoy.8
The pay scale structure forces me to qualify as ATCO3, where I will have to sit at a radar screen,
even if I don’t want to.

Air traffic management was a highly technical area, and managing ATCOs required in-depth knowledge of
the function because an ATCO was highly independent but had to coordinate with others. This meant that
anybody instructing or supervising an ATCO had to have similar technical knowledge and skills but also the
ability to operate in a head office environment or managerial structure. ATNS had two senior managers for
operations (one for northern airports and another for southern airports). Each airport had a manager of air
traffic services who reported to their respective senior manager. The managers then had a pool manager, who
directed and coordinated the activities of the ATCOs in their shifts at the airports. This included managing the
rosters and shifts of the ATCOs by their particular qualifications and disciplines. Prior to appointment, airport
managers required managerial training and at least three years of serving as a pool manager. Pool managers
were qualified ATCO1s or ATCO2s (depending on the complexity of the airport) with at least three years of
experience, with supervisory training provided as soon as they were appointed (see Exhibit 6). According to
Malinga, this in itself proved to be a challenge to ATNS: “When we canvassed the ATCOs to introduce
additional performance elements that measured leadership and broader management elements, ATCOs across
the group felt uncomfortable and expressed the view that this was not what they were trained for.”

Despite this, ATNS had to fill the airport management positions. Ngcwabe said:

For every station, we need a manager, but with differing levels of experience. We need to train
them to be able to manage. We don’t promote to this level; they apply, and then we select from
applicants. Sometimes getting somebody from another station is a problem. One can go from a
complex aerodrome to a less complex aerodrome theoretically, but this doesn’t happen, as this
would entail a pay decrease. Taking a manager from a smaller aerodrome to a larger aerodrome is
also difficult, as the internal group culture at each aerodrome is different, and the ATCOs are likely
to reject a manager that does not have experience at the most complex aerodromes.

8
ATCO3s sat in an underground facility, working with longer-range and advanced technology.

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RETENTION

Retention was a continuous problem for ATNS. ATCOs with more than five years of experience were highly
sought after internationally, particularly in the Middle East. ATCO levels 1, 2, and 3 were all in demand
internationally, and ATNS benchmarked their remuneration accordingly. According to Ngcwabe,
“Internationally, our ATCOs are attractive as soon as they have five years of experience, no matter the
specialization. There is more of an uptake on ATCO3s, as they have more experience, including ATCO1 skills,
and have been an ATCO for longer.” This problem seemed to be more prevalent among white ATCOs, who were
generally more qualified and felt that they would not be passed over for promotion due to South African
affirmative action regulations. According to Kgokolo, this problem was not confined to white ATCOs though:

As you rise to the top, there are fewer career options for an ATCO. We have recruited many of
them straight from school and developed and promoted them as their technical skills and abilities
have developed. All [that] the ATCOs have been doing is managing traffic—and, at some point,
they need to manage people, and they are not adequately skilled at doing this. In addition, we have
not been good at managing the ATCOs, as we have not involved them or socialized them to a
corporate office environment; there is a clear divide between head office and ATCOs.

ATNS had dealt with retention through benchmarking ATCO salaries against those of air traffic control
services in other countries, including Australia, Canada, Germany, Finland, Ireland, the Netherlands, New
Zealand, and Spain. Additionally, salaries were increased for each year of service. ATNS also paid a
significant retention allowance when an ATCO (level 1, 2, or 3) attained five years of service. Additional
allowances were paid according to the complexity of the airport where the ATCO was stationed. These
were also effective after five years. Together, these two allowances contributed more than 15 per cent over
the ATCO’s base remuneration. The complexity of the pay scale and allowances meant that ATCOs would
sacrifice earnings if they had many years of service and then qualified as a higher-level ATCO, particularly
in a less complex airport.

The problem ATNS was dealing with was complicated by the high level of skills migration in South Africa.
South Africa faced an increasing problem of highly skilled individuals moving to Europe, Australia, and
North America. The problem was complicated by the depreciation of South African currency since 2009.
Initially, the skills migration was mainly white South Africans; however, by 2017, this had changed to
include highly skilled workers from all race groups.9 Benchmarking to international salaries and paying
retention allowances was not solving the ATNS problem. ATNS was a state-owned entity, so it did not
have alternatives, such as employee share schemes or increased variable pay, that other South African firms
used to retain staff. The highly regulated nature of the ATCO job and the fact that ATCOs worked limited
shifts made a variable pay incentive difficult to implement. In addition, ATNS could not afford to increase
salaries to match currency fluctuations.

A CLOGGED TALENT PIPELINE

Kgokolo perused the talent management key performance indicators again and noticed that ATNS had
missed its targets for training ATCO1s and ATCO2s and would be facing a shortage of ATCO3s. He
discussed this with Ngcwabe. They noticed that although turnover was low overall, the problem was mainly
at the ATCO2 and ATCO3 levels and that this could limit ATNS’s ability to roll out future technologies
and management succession. A further observation was that 12 of the 17 ATCOs that left were white but

9
Albert Wöcke and Marinus Heymann, “Impact of Demographic Variables on Voluntary Labour Turnover in South Africa,” The
International Journal of Human Resource Management 23, no. 16 (2012): 3479–3494.

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highly skilled. The higher skilled ATCO3s were disproportionalty white, and although their resignations
could open space to promote more black ATCOs, Kgokolo was concerned about the loss of skills that would
take a long time to replace. A shortage of senior ATCOs would have a secondary effect on the organization,
felt in shift patterns, workloads, and mentoring and supervision. Another potential problem was the
transition to new technologies. Air traffic services were continuously improving their technology, and
ATNS was expected to introduce these technologies as well. These new technologies would be more
satellite-based and would require additional skills to roll out, which would place additional pressure on the
talent pipeline, particularly for ATCO3s.

Kgokolo reflected on the recruitment side of the ATNS pipeline. Malinga and Ngcwabe had previously
identified the conversion of ATSOs to ATCO1s as a problem. ATNS generally recruited about 60 bursars
per year but had decided to reduce it to 20 when it was found that there was a mismatch between positions
and ATSOs. ATSO training required extensive on-the-job training, but the positions available were limited.
ATSOs had to share positions, which slowed down their progress to ATCO1. According to Malinga,

At ATCO1 level, we have attrition to overseas air traffic services, and this is complicated by a high
rate of failure of ATSOs convert[ing] to ATCO1 last year. One of the issues is that we have too
many ATSOs, and there are simply not enough positions available to gain enough hours to learn
the skills required to be promoted to ATCO1. Previously, we recruited 60 bursars per year; we are
recruiting only 20 this year.

The reduction in bursars did, however, provide an opportunity for additional revenues. Malinga suggested
that they “could fill the excess academy space with foreign paying students, which will be quite lucrative
for the academy.”

Kgokolo also noticed that many of the ATCO1s were not completing their courses for promotion to ATCO2
or ATCO3. Kgokolo mused:

Perhaps the problem is that we are transforming people’s lives too radically. Some of our young
ATCOs have not gone to university, and while they are undoubtedly bright, they have not lived in
the city and have grown up in an environment of deprivation. We have seen that the graduates from
our programs are overwhelmed by the fact that they are earning better than their parents or siblings
could ever imagine. And this at a very young age.

Kgokolo wondered if there were other reasons for the lack of ambition for promotion:

The salary scales may be working against us, too: people get salary increases simply for doing their
job. For example, an ATCO2 with 10 years’ experience was earning more than an ATCO3 with
five years of experience; similarly, there was no motivation for an ATCO1 to work toward an
ATCO2 qualification if they were satisfied with their income.

He could see that the ATNS talent pipeline was facing some challenges that required immediate action.
Should ATNS redesign its talent pipeline? If the talent pipeline required a major intervention, where should
Kgokolo focus his attention?

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EXHIBIT 1: AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED, CORPORATE STRUCTURE

Note: ATA = Aviation Training Academy; ATM = air traffic movement; ATNS = Air Traffic and Navigation Services SOC Limited; CEO
= chief executive officer; CNS = communication, navigation, and surveillance; SACAA = South African Civil Aviation Authority.
Source: Company documents.

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EXHIBIT 2: AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED, AREA OF RESPONSIBILITY

Note: Air Traffic and Navigation Services SOC Limited (ATNS) provides services to nine South African statutory airports, which
are operated by Airports Company of South Africa; 11 regional airports; and Saint Helena Airport on a contractual basis. Apart
from the provision of air traffic services within the South Africa and Flight Information Region boundaries, ATNS is mandated
through the International Civil Aviation Organization to provide these services in the oceanic area. Overall, ATNS provides air
traffic services for 22 million square kilometres of airspace, equating to approximately 10 per cent of global airspace.
Source: Company documents.

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EXHIBIT 3: AIRPORTS MANAGED BY AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED

Note: ACSA = Airports Company of South Africa; ATNS = Air Traffic and Navigation Services SOC Limited; DoT = Department
of Transport.
Source: Company documents.

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EXHIBIT 4: TASKS OF AIR TRAFFIC CONTROLLERS


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Note: ATCO1s and ATCO2s work the airports and approaches, while the en route and more advanced radar functions require ATCO3 training and knowledge. AFIS =
Aerodrome Flight Information Service; ATCO = air traffic control operator; ASMGCS = Advanced Surface Movement Guidance and Control System; DME = distance measuring
equipment; ILS = instrument landing system; VHF = very high frequency; VOR = very high frequency omni-directional range; VSAT = very small aperture terminal.
Source: Air Traffic and Navigation Services SOC Limited, Integrated Report 2019, accessed July 7, 2020,
www.atns.com/PDF/Performance/Annual%20Reports/2019/2019%20ATNS%20Integrated%20Report.pdf.
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EXHIBIT 5: AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED BURSAR PROGRAM, 2018

Profile of Bursars recruited in 2018


Ethnic Group Africans Coloured Indian White Total
Female 43 2 4 2 51
Male 7 0 0 2 9
Total Bursars recruited 60

Pictures of Bursars visiting ATNS sites and being recruited for the ATCO programme

Source: Company documents.

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EXHIBIT 6: ORGANOGRAM OF AIR TRAFFIC AND NAVIGATION SERVICES SOC LIMITED MANAGEMENT

Chief: Air Traffic


Services

Executive Secretary
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Senior Manager, Senior Manager,


Operations (North) Operations (South)

Manager of Air Traffic Manager of Air Traffic Manager of Air Traffic Manager of Air Traffic Manager of Air Traffic Manager of Air Traffic
Services OR Tambo Services Lanseria Services Bloemfontein Services Port Services King Shaka Services Cape Town
Airport Airport Airport Elizabeth Airport Airport Airport

Pool Manager Pool Manager Pool Manager Pool Manager Pool Manager Pool Manager

Officer in Charge Officer in Charge Officer in Charge Officer in Charge Officer in Charge

Note: A manager of air traffic services must have served as a pool manager or officer in charge (OIC) for at least three years. A pool manager supervised air traffic control
officers (ATCOs) and ensured that they maintained their skills and proficiencies. Their time was divided between operational and supervisory duties to maintain their
proficiencies and skills. They required qualification and at least two years of experience in on-the-job instructional training. These were typically roles for ATCO3s. An OIC
required at least two years of functional experience as well as two years of experience in on-the-job-training of other ATCOs and air traffic services officers. This was also
typically an ATCO3 role; however, in smaller airports, this was potentially filled by lower-level ATCOs under the supervision of an ATCO3.
Source: Company documents.

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