One-Page Brief
The story: FY2026 was an operationally record year — passenger volumes 22.4m (10.8% above budget), revenue R467.6m (+R9.2m, +2.0%). But cost overruns wiped out the upside: total expenditure R17.2m over budget, dragging operating profit R8m below budget (R44.6m vs R52.6m). Cash position remains strong (R120m closing, +R13m vs Q3 forecast). Underneath that picture sits an existential ACSA dispute (R3.5bn baggage screening procurement, 12-month termination threat) and an unresolved Letter of Authority delay at the Master of the High Court.
Headline KPIs (FY2026 Full Year)
Top 5 Things To Track in the Meeting
Meeting Agenda (74th Board of Trustees)
Click any item to expand briefing notes.
- 1Notice of Meeting and Welcome
- 2Apologies
- 3QuorumLOA delay note expected
- 4Approval of Agenda
- 5Disclosure of Interest
6 · Approval of Minutes — Board of Trustees, 27 August 2025
Last Trustees meeting was 27 Aug 2025. Quorate (5 present: King, Conradie, Fihla, Mothema, Munetsi; apology Tshetu). Major items minuted: ACSA mediation failure, R49m treasury top-up, AFS for FY ending 31 Mar 2025 approved for recommendation to Shareholder, Trustee & Director nominations (status quo), MOI review pending strategic session, ACS Trust governance opinion to be sought from BDO.
Watch for: The amendment to the June 2025 minutes (Item 6.2) records "Passenger Statistics is 18.7m versus budget 19.7m, unfavourable variance of 790,000" — but 19.7 − 18.7 = 1.0m, not 790k. The amendment introduces its own arithmetic error.
7 · Matters Arising
Aug 2025 minutes record no standalone matters arising — all rolled into substantive items. Expect same approach today.
8 · Report from the Board of Directors (incl. 8.1 Social & Ethics Update)
Q4 FY2026 Social & Ethics report submitted by Liabo Molapo (12 May 2026). Highlights: Ethics Ambassadors appointed and trained; Ethics Project Plan pending approval; Code of Conduct workshop rolled out (Nov 2025); FY2027 ethics pulse survey planned mid-year.
Recommendation in the report is simply "NOTED" — no decision required.
9 · Management Accounts for Year Ended 31 March 2026
CFO deck — see Financials tab. Marked DRAFT — pending audit finalisation.
10 · Risk Register
Agenda hyperlinks "Risk register 2023" — likely stale label. See Risk tab.
- 11General
- 12Date of Next Meeting — 27 August 2026
- 13Closure
Financial Performance — FY2026 Full Year
Revenue vs Budget vs Prior Year
P&L Snapshot (ZAR '000)
| Line | Actual | Budget | Variance | Verdict |
|---|---|---|---|---|
| Domestic Revenue | 322,937 | 314,194 | +8,743 | Favourable |
| International Revenue | 144,202 | 144,144 | +58 | On budget |
| Other Revenue | 433 | — | +433 | Unbudgeted |
| Net Service Revenue | 467,572 | 458,338 | +9,234 | +2.0% |
| Cost of Services | 396,932 | 380,154 | (16,779) | Overspend |
| Gross Margin | 70,640 | 78,184 | (7,544) | −2.0pp (15.1% vs 17.1%) |
| Overheads | 5,292 | 5,526 | +235 | Saved |
| Business Development | 1,727 | 1,559 | (168) | Small over |
| Trading Performance | 63,622 | 71,099 | (7,477) | −10.5% |
| Indirect Costs | 19,037 | 18,515 | (522) | Slight over |
| Operating Profit | 44,585 | 52,583 | (7,999) | −15.2% vs budget |
Cost Variance Drivers
| Category | Actual | Budget | Variance | Driver |
|---|---|---|---|---|
| Maintenance | 89.2 | 81.5 | (7.7) | Conveyor belt timing & X-Scann alignment |
| Consultants | 19.3 | 14.5 | (4.8) | AVSEC KPI digitalisation, HR recruitment, media |
| Legal Fees | 11.8 | 10.2 | (1.6) | ACSA impasse meetings, Directors' fees |
| Travel (OS+Hotels) | 1.7 | 0.7 | (1.0) | Exec onboarding, UK strategic event |
| Security Insurance | 15.8 | 18.3 | +2.5 | Premium renegotiation |
| Operational Costs | 23.1 | 25.3 | +2.2 | Re-allocated to maintenance |
| Bad Debts | 0.04 | 1.8 | +1.8 | Legacy write-offs accounted separately |
Balance Sheet & Liquidity (31 Mar 2026)
Debtors Ageing
ACSA Mediation & Litigation Risk
What's at Stake
| Issue | ACS Position | ACSA Position |
|---|---|---|
| Contract termination window | 5–10 year transition | 12-month termination |
| Baggage screening procurement (R3.5bn) | Mandatory consultation with airlines & ACS | Approved tariffs without disclosure to industry |
| HBS double-charging | Passengers being charged twice — needs regulatory correction | Frames ACS fee collection as "charging twice" |
| Backup screening units (4 in-country) | Awaiting ACSA approval to install | Mediator urged installation twice; ACSA non-responsive |
Mediator's view
Risk Outlook
- Litigation horizon: 5–10 years if mediation fails (acknowledged in minutes).
- Engagement strategy: Continue good-faith engagement to maintain credibility with Transport Minister.
- Legal counsel: Webber Wentzel.
Open questions for 28 May
- Any movement post-mediation? New mediator session? Ministerial intervention?
- Have the four backup units been installed? If not, why not — and what is the operational exposure?
- Has the "joint HBS double-charging report" been delivered to the mediator?
- What is the current legal spend run-rate, and what does a 5-year litigation case fund look like?
Risk Register Highlights
Pre-read addendum · Chairman's Report: Risk Committee — May 2026
Source added after the original pack review: 947_Chairman's Report_Risk May 2026.pdf, emailed by Desiree Stillies on 27 May 2026.
Meeting implication: the separate Risk Committee report is the better source for agenda item 10 than the stale "Risk register 2023" label. It says only risks beyond appetite are escalated to the Board, so the Board should ask for current status, dates, owners and mitigation evidence rather than simply noting the legacy register.
- HBS explosive-device / screening risk is outside appetite: there is still no formal go-ahead for equipment replacement; ACSA issued an ICE letter with exceptions and ACS is preparing responses to SACAA.
- CTX EDS end-of-life is urgent: Smiths gave only a further 3-month extension, ending 31 May 2026; further extensions are described as unlikely because Smiths is offloading the detection business.
- Backup units: four backup units have been secured and are waiting for SACAA approval; confirm whether the court ruling in ACS' favour is enough to proceed, and what remains blocked by ACSA/SACAA.
- Operational failure risk is already realised: the report cites longer downtimes on EDS units, with recent CPT and JNB examples, driven by obsolete/first-generation CTX EDS and spare-parts scarcity.
- Other escalated risks: cyber/terrorism, insider threats, covert-test/threat detection, and one-source revenue concentration. AI-assisted cameras and a training academy are proposed mitigations.
- Risk-register hygiene: ask management to table the current 2026 heat map and confirm what changed since the August 2025 Board minutes.
Recommended Elmar question: "Can we please reconcile the agenda's 'Risk register 2023' label with the Risk Committee's May 2026 report — and have management walk us through the current top risks, owners, due dates and movements since the last Board meeting?"
1 · Ageing Equipment & Replacement
SACAA (via ACSA) has requested extensive documentation. Management is collating remaining info, targeted submission to ACSA 2 September 2025 (date in May 2026 pack — likely stale, ask Mogau / Liabo). Installation to be completed within 45 days of approval, subject to ACSA cooperation. Peak travel season risk: ACSA may defer installations.
2 · Staff Retention (HIGH)
ACSA aggressively recruiting screeners from ACS' security service providers. Management "exploring retention strategies and assessing optimal staffing levels." No concrete retention plan or attrition % disclosed in pack — ask.
3 · Misidentification of Threat Items
Strengthened QC, uniformity across sites, increased SACAA testing (incl. explosive detection — all passed). Proposal to introduce body cams for training & quality assurance.
4 · MOI Review & Diversification
Board of Directors reviewing the MOI before diversification prospects are tabled. Business case to be developed for each diversification initiative. Deferred to strategic session. Ask: when is the strategic session?
5 · ACS Trust Governance
Trust has only one issued share, no bank account. Costs paid by ACS Pty Ltd. Since incorporation, legislation has evolved — BDO opinion to be sought on governance compliance for the Trust. Status of BDO opinion?
Social & Ethics Update (Q4 FY2026)
Period: Jan–Mar 2026. Submitted by Ms Liabo Molapo, Executive: HR, HSE & CA · Recommendation: NOTED
What Moved
- Ethics Ambassadors formally appointed across the org · all trained via The Ethics Institute · Terms of Reference adopted.
- Code of Conduct + COI Policy rolled out in a virtual workshop; policies presented at the Nov 2025 workshop.
- Ethics Project Plan developed — pending approval.
- Culture & Values: quarterly quiz participation up 60% → 72%.
Planned for FY2026/27
- Execute approved Ethics Project Plan (Ambassadors-led, HR-coordinated)
- Launch ethics awareness initiatives and leadership engagement sessions
- Mid-year ethics pulse survey to assess sentiment
- Continued alignment with governance / risk / compliance frameworks
Ethics Management Plan (EMP) — Progress Snapshot
| Focal Area | Intervention | Status |
|---|---|---|
| Leadership Commitment | Values-based leadership | Ongoing |
| Ethics Ambassadors appointed | Done (Dec 2024 target met) | |
| Promotion of ethics in everyday management | Ongoing | |
| Reinforce Code of Ethics | Ongoing | |
| Ethics Accountability | Consistent application of policies | Ongoing |
| ESG (research + bottled-water carbon-footprint proposal) | Research / proposal stage | |
| Ethics hotline review + annual COI declarations | Ongoing | |
| Talk & Awareness | Annual ethics awareness campaign | Planned (in Annual Comms Plan) |
| Annual ethics pledge | Signed pledges in place |
Discrepancies & Drafting Issues
Re-verified against the source PDF (20 pages). Each card carries the exact text or image snippet from the original document so you don't need to open the pack.
🚩 1. Meeting date conflict (28 May vs 26 May)
Agenda & email body: "Thursday, 28 May 2026 at 13:30".
CFO Financial Report cover & S&E report header: "Board to be held on 26 May 2026".
Likely the financial deck was prepared against an earlier diary slot and not updated when the meeting was rescheduled. Confirm date with Desiree.
📎 Source snippets
PDF p.1 — Agenda header
PDF p.9 — Social & Ethics report header
REPORT FOR THE MEETING OF BOARD TO BE HELD ON 26 MAY 2026 Prepared and submitted by: Ms Liabo Molapo (Executive: HR, HSE & CA) Reporting period: January to March 2026
PDF p.10–p.13 footers (S&E pages)
Board – 26 May 2026 – Report (Period: January to March 2026) CONFIDENTIAL
🚩 2. Infographic bar-chart labels contradict the dashboard (RE-VERIFIED ✔)
On the "Commercial Success Subsidized Budget Overrun" infographic (CFO deck page 3 / PDF p.17), the bar-chart labels are typos:
- FY2026 Actual Total Revenue label reads R487.6m — but the headline KPI on the SAME page reads R467.6m, and the dashboard (CFO p.2) and YTD table (CFO p.1) both confirm R467.6m. Off by R20m.
- FY2026 Actual Total Expenditure label reads R433.0m — but the dashboard says R423m. Off by R10m.
- The variance arrows printed on the same bars (+R9.3m revenue, R17.2m expenditure) only reconcile to the smaller (correct) numbers — confirming the bar labels are the typos, not the variances.
Implication: the headline panel of the page-3 infographic is fine; the bar-chart numerals are wrong. Ask Mogau to reissue the infographic before printing.
📎 Source snippet — infographic bars
PDF p.17 — bar chart at bottom-left of infographic
PDF p.16 — dashboard headline tiles (cross-reference)
Total Revenue R467.6m Budget: R458.3m Var: +R9.2m (+2.0%) Total Expenditure R423m Budget: R405.8m Var: (R17.2m) (-4.2%)
🚩 3. June 2025 minutes amendment introduces its own math error
Aug 2025 minutes §6.2 record the agreed correction as: 19.7m − 18.7m = 790,000. The arithmetic is wrong — the gap is 1.0m, not 790k.
📎 Source snippet
PDF p.3 — Aug 2025 Minutes §6.2 (amendment to June 2025 minutes)
Page 4, Item 9, Second Paragraph, First line: to the replacement of the sentence with "Passenger Statistics is 18.7m versus a budget of 19.7m, an unfavourable variance of 790,000".
🚩 4. Agenda item 10 labelled "Risk register 2023"
Agenda item 10 reads "Risk Register - Risk register 2023". Either the label is stale or the document version is. No standalone 2026 risk-register pages appear in the pack — the only risk discussion in the pack is in the Aug 2025 minutes (§16) and inside the S&E report. Confirm what's actually being tabled under item 10.
📎 Source snippet
PDF p.1 — Agenda items 9–11
9. Management Accounts for the year ended 31 March 2026 10. Risk Register - Risk register 2023 11. General
🚩 5. Operating-profit variance framed two different ways (1.9% pp vs 8.5%)
The YTD March P&L table (CFO p.1 / PDF p.15) shows Operating Profit % variance as (1.9%) — that's the margin gap in percentage-points (9.5% margin vs 11.5% budgeted = −2.0pp, rounded to −1.9). The dashboard tile on the next page (CFO p.2 / PDF p.16) shows the same R8m gap as (−8.5%) — that's a different basis (per-unit-budget). Both are arithmetically defensible but a reader will conflate them. Pick one or label each clearly.
📎 Source snippets — both renderings
PDF p.15 — YTD P&L table (right column)
PDF p.16 — Performance dashboard tile
Operating Profit / (Loss): 44,585 (actual) vs 52,583 (budget) (R7,999) variance Operating Profit %: 9.5% (actual) vs 11.5% (budget) (1.9%) variance [Dashboard:] Operating Profit R44.6m Budget: R52.6m Var: (R8m) (-8.5%)
🚩 6. Aug 2025 minutes §9 — title vs body inconsistency
Header reads "MANAGEMENT ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2025" but the body states "Revenue is R2.7m, favourable to budget. Revenue attainment to budget is 97.4%." — those two sentences are internally contradictory (97.4% attainment = under budget, not favourable). Section 10 ("Annual Financial Statements for year ended 31 March 2025") is the genuine annual item. Section 9 looks like an in-quarter management report mis-titled as a year-end view.
📎 Source snippet
PDF p.4 — Aug 2025 Minutes §9
9. MANAGEMENT ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2025 Revenue Revenue is R2.7m, favourable to budget. Revenue attainment to budget is 97.4%. The revenue split between domestic and international is 69% and 31% respectively. Operating Profit Operating profit is R7.4m or 6.8% favourable to budget…
🚩 7. CFO cover page placeholder — Reg. No. [PLACEHOLDER]
CFO Financial Report cover (PDF p.14) lists Reg. No. [PLACEHOLDER]. Same placeholder also appears in the footer of CFO p.1 (PDF p.15). Fill before distribution.
📎 Source snippet
PDF p.14 — CFO Financial Report cover
Aviation Co-ordination Services (Pty) Ltd | Reg. No. [PLACEHOLDER] | Prepared in accordance with IFRS and Companies Act No. 71 of 2008 | CONFIDENTIAL
🚩 8. Conveyor-belt accrual jumped R60.1m → R72.0m in 9 months
Aug 2025 minutes (FY2025 annual financial statements) carried the conveyor-belt accrual at R60.1m inside trade receivables. The May 2026 balance-sheet page carries it at R72.0m as an unpaid maintenance liability with "legal committee to determine course of action". Worth understanding the burn-rate and the legal position — is the dispute the reason it's unpaid, and does ACS expect to recover or write it down?
📎 Source snippets — then and now
PDF p.5 — Aug 2025 Minutes §10 Annual Financial Statements (FY2025)
Trade Receivables was R51 million, reflecting a decrease of 2.4% from prior year. Included in receivables is a R60.1 million accrual for conveyor belt costs.
PDF p.20 — May 2026 Balance Sheet Highlights
Conveyor Belt Accrual: R72.0m Unpaid maintenance liability. Legal committee to determine course of action.
🚩 9. Vunani Fund — self-contradicting one-liner
Balance-sheet narrative reads: "Fund performance in line with benchmark overall although not performing well." Those two clauses contradict each other in a single sentence. If overall it's at benchmark, what specifically isn't performing? Ask for a manager / asset-class breakdown.
📎 Source snippet
PDF p.20 — May 2026 Balance Sheet Highlights, first card
Vunani Fund Investment: R410.3m No withdrawals in FY2026. Independent actuaries appointed. Fund performance in line with benchmark overall although not performing well
🚩 10. "2 September 2025" backup-unit submission date — status not refreshed
The Aug 2025 minutes describe the ageing-equipment action as "targeted submission to ACSA by 2 September 2025". That date passed 8 months ago. Nothing in the May 2026 pack confirms whether the submission landed, whether ACSA responded, or whether the four backup units are installed yet. Worth a direct status question under item 10.
📎 Source snippet
PDF p.7 — Aug 2025 Minutes §16 Risk Register
Ageing Equipment & Equipment Replacement The SACAA via ACSA has requested extensive documentation from ACS. Management is collating the remaining requested information, with targeted submission to ACSA by 2 September 2025. Installation is expected to be completed within 45 days of receipt of approval, subject to ACSA cooperation.
📝 Re-review note (added 26 May 2026)
All 10 discrepancies re-verified against the source PDF. The infographic-typo finding (#2) was re-checked at higher resolution — the bar labels do say R487.6m and R433.0m, confirming the typo. No additional material discrepancies surfaced on this pass.
Suggested Questions to Raise
Grouped by agenda item. Pick the 4–5 with the highest leverage.
Item 6 / 7 — Matters Arising from Aug 2025
- What is the status of the Letter of Authority injunction with Webber Wentzel? Any movement at the Master's office?
- Has the BDO opinion on ACS Trust governance been received?
Item 8 — ACSA Impasse (highest priority)
- Since the failed July 2025 mediation, has ACSA re-engaged, formally or informally?
- Have the four backup screening units been installed, or are they still grounded? This is operational risk to airline schedules — directly material to AASA members.
- What is the status of the joint HBS double-charging report the mediator instructed?
- Has the Transport Minister engaged? Is there a political off-ramp?
- Have we modelled the cost of a 5-year litigation scenario, and is the war chest sized for it?
📎 Source — Aug 2025 minutes, ACSA Mediation section
PDF p.3 — Aug 2025 Minutes, ACSA Mediation & Litigation Update
At the mediation session held on 29 and 30th of July 2025, ACSA was extremely non-compromising. ACSA 1. adopted a rigid, non-negotiable approach and insisting on a 12-month termination of ACS services; 2. refused to negotiate core issues, particularly baggage screening procurement valued at R3.5 billion; 3. refused to engage on ACS' proposed transitional solutions (5 to 10 year amortisation window, orderly exit, equipment financing logic); and 4. persistently reframed the issue as ACS "holding on" rather than seeking operational continuity. ACS informed the mediator that four backup units were already in the country, awaiting ACSA's approval for installation. The mediator raised the matter twice, emphasising the importance of installing the units to protect airline operations.
Item 9 — Financials
- The R20m / R10m infographic discrepancies — confirm the headline KPI figures (R467.6m revenue, R423m expenditure) are the audited-track numbers.
- Maintenance R7.7m overspend is framed as timing (conveyor belt + X-Scann). Will it reverse in FY27 Q1, or is it structural?
- Consultants R4.8m over — what stops consultant spend from creeping into BAU?
- Vunani Fund "not performing well" line — what's the underperforming bucket and what's management doing about it? Are we considering a re-allocation?
- R72m conveyor belt accrual — is this collectable? What is the legal committee's preliminary view?
- SARS VAT objection (~R2m) — what is the probability-weighted exposure?
📎 Source — Expenditure variance commentary
PDF p.19 — Expenditure Analysis, Key Variance Commentary
Maintenance (R7.7m) Actual: R89.2m Bgt: R81.5m Timing differences on conveyor belt maintenance. X-Scann R3.6m alignment of costs in the correct period. Consultants (R4.8m) Actual: R19.3m Bgt: R14.5m Digitalisation of AVSEC KPIs, HR consultants for Recruitment and PDPs, and media strategists. Legal Fees (R1.6m) Actual: R11.8m Bgt: R10.2m Additional meetings related to ACSA impasse. Directors' fees R0.6m over budget due to same. Travel (Overseas + Hotels) (R1.0m) Actual: R1.7m Bgt: R0.7m Unbudgeted executive onboarding and strategic event attendance - UK travel.
📎 Source — Balance sheet (Vunani, Conveyor belt, SARS VAT)
PDF p.20 — Key Balance Sheet Positions
Item 10 — Risk Register
- Staff retention is rated HIGH but no metrics — what is current attrition vs benchmark, and what's the retention budget?
- Ageing-equipment action dated 2 Sep 2025 — closed, deferred, or stale?
- When is the Board strategic session? MOI review + diversification cases are waiting on it.
- Agenda item 10 reads "Risk register 2023" — is the document being tabled actually the current 2026 register?
📎 Source — Aug 2025 minutes, Risk Register section
PDF p.7 — Aug 2025 Minutes §16 Risk Register (the only risk-register content in the pack)
Ageing Equipment & Equipment Replacement … targeted submission to ACSA by 2 September 2025. Installation is expected to be completed within 45 days of receipt of approval, subject to ACSA cooperation. Staff Retention ACSA has been aggressively recruiting screeners from ACS' appointed security screening service providers. Management is exploring retention strategies and assessing optimal staffing levels. This risk classified as high.
Item 11 — General
- Date discrepancy (26 vs 28 May) — confirm the CFO/S&E packs were prepared against the correct meeting.
- Risk register "2023" hyperlink — confirm the current version is what we're approving.