The Government-owned Aeronautical Telecommunications Limited (AEROTEL) is now reaping much benefits from its recent diversification efforts, which has been gaining momentum.
AEROTEL, which provides technical support and maintenance for Jamaica’s communication and air navigation systems, has already secured an overseas contract in the Dutch Caribbean. This is as a result of the company leveraging Jamaica’s increasing regional reputation for high levels of expertise in aviation, particularly regarding radar and surveillance services.
Overall, AEROTEL’s revenues reflected the continuing rebound of the industry to achieve an all-time high.
For the last financial year 2022/2023, overall revenue before financial income increased substantially to $849.2 million, which is ahead of its planned outcome compared to prior year of $695.3 million.
Solid achievement in aeronautical division
Operational outcomes were solid for the aeronautical division with several key performance indicators in line with target/expectations. There were some material parts of the communications navigation and surveillance assets needing extensive renewal works due to manufacturer-related issues.
However, these were successfully undertaken and overall systems availability essentially achieved the required International Civil Aviation Organization (ICAO) mandated target level. AEROTEL expects to continue on its current trajectory of business growth, improved technical competence and service innovation and thereby continue its mission of long-term contribution to nation building via its support of the aviation and media sectors.
On the other hand, the continuing advancement of AEROTEL’s Network Operations and Control Centre has given the government owned entity enhanced remote visibility of the entire network estate and improved ability to expedite remedial action without having to travel to the location.
No change to ‘Corporate Plan’
There were no material modifications to the corporate plan and no major changes proposed in the nature and scope of activities of AEROTEL for the year under review. However, the company hinted in its 2022/2023 annual report, which was tabled in parliament last week that of the possibility of leveraging Jamaica’s growing reputation for capacity and capability in air traffic management to expand Air Traffic Safety Electronic Personnel (ATSEP) service delivery to other countries in the region.
AEROTEL’s acknowledges that its “forays into the consulting arena bore fruit in line with budget as we successfully secured and delivered an international contract in radar / surveillance systems and have other leads in the pipeline.”
The solid growth, notwithstanding, there is a concern about the current business operating model in terms of its cost recovery basis.
Wage negotiation settlements completed in respect of prior year as well as year under review, bringing deserved increases to the staff, have led to a cost base that will not enable positive operating margins going forward. In furtherance, the company will purposefully seek a rate review of the overflight communication charges, the AMHS, which have not been adjusted for more than 15 years
Expenses did increase substantially to $806.6 million in 2022/2023 coming from $692.8 million in the prior year. This was to be expected given the pay-out of two years of retro compensation settlements. It is commendable that with such extent and levels of retroactive payments, the company was able to fund these from operating cash resources achieve a full year position with a positive operating margin, albeit quite modest on this occasion.
AEROTEL general manager Howard Armstrong was appointed to the Americas Executive Board of the International Federation of Air Traffic Safety Electronics personnel (IFATSEA), which is also potentially helpful to the company’s aspirations of thought leadership in the Caribbean and Latin America.