Microsoft Word - Autopax Business Strategy_RAM_20192020

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Autopax$Passenger$Services$$

(SOC)$

Business$Plan$$$

2019/2020$

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Table$of$contents$

Heading$

Page$no.$

1.'

Introduction'

2.'

Background'and'Executive'Summary'

3.'

Vision.'Mission'and'Leadership'philosophy'

4.'

Legislation'

5.'

Philosophy'behind'the'business'

6.'

Historical'business'performance'and'challenges'

7.'

Historical'financial'performance'

8.'

Market'analysis,'passenger'profile'and'passenger'satisfaction'index'

9.'

Value'Proposition'

11'

10.'

Strengths,'Weaknesses,'Opportunities'and'Threats'(SWOT)'analysis'

11'

11.'

Strategy'and'business'plan'review'

12'

12.'

Business'planning'and'strategic'framework'

12'

13.'

Business'objectives'

17'

14'

Appendices'

20'

$ $

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1. INTRODUCTION$

Autopax'Passenger'Services'(SOC)'Ltd'also'known'as'Autopax'is'a'wholly-owned'subsidiary'of'

Passenger'Rail'Agency'of'South'Africa'(PRASA).'Autopax'exist'to'service'the'primary'mandate'

of'PRASA'which'is,'!"#$%&'(%)(*#)+,-./.%#)(0%.1(.1'(2'!/".3').(#4(5"/)+!#".6(4#"(-#)7(1/,-(

!/++')7'"("/%-(/)&( bus$services(0%.1%)6(.#(/)&(4"#3(.1'( 8'!,9-% *(%)(.'"3+(#4(.1'(!"%)*%!-'+(+'.(

#,.(%)(+'*.%#)(:(#4(.1'(;/.%#)/-(</)&(5"/)+!#".(=*.6(>??@(A=*.(;#B(C(#4(>??@D.'

The' company' derives' its' mandate' from' the' shareholder’s' compact.' Based' on' the'

Shareholder’s'compact,'Autopax'is'mandated'to'deliver'quality'and'safe'long'distance' bus'

passenger'services'in'South'Africa'with'a'view'to'grow'the'market'share'and'expanding'the'

business'and'thus'creating'shareholder'value.'

2. EXECUTIVE$SUMMARY$AND$BACKGROUND$

Autopax'has'ambitions'o f'assuming'leadership'in'the'long'distance'road'passenger' transpo rt'

solutions.'The'attainment'of'this'ambition'is'centred'on'the'company’s'mission'of'providing'

a' preferred,' sustainable,' high' quality,' seamless' and' affordable' road' passenger' transport'

services.' This' business' strategy' is' necessitated' by' a' number' of' business' challenges' that'

confronts'the'company'today.'In'the'process'of'crafting'a'strategic'plan'that'will'return'the'

company'to'a'financially'sustainable'level,'the'leadership'of'the'busin ess'is'confronted'with'

the'challenge'of'effectively'managing'the'current'business'whilst'creating'and'implementing'

the'future'Autopax'business'based'on'this'strategy.'

The' organisation' finds' itself' in' a' financially' and' operationally' distress' state' requirin g,'

management'and'leadership'with'aptitude'that'can'catapult'the'business'into'new'frontiers.'

The' company' is' also' confronted' by' a' business' unfavourable' organisational' culture' that'

permeates'within'its'human'capital'that'is'compounded'by'the'collapse'in'employee'morale'

and'motivation.'The'company'has'overtime'experienced'a'declin e'in'corporate'and'ethical'

culture,'leading'to'collapse'in'corporate'governance.''

Due'to'major' cash 'flow'challenges'to'sustain' th e'business,'there'is'a'high'number'of'the'bus'

fleet' that' remains' off' the' road' (parked' due' to' mechanical' breakdowns),' the' cash' flow'

constraints' has' also' contributed' hugely' to' po or' fleet' maintenance' regime' leading' to'

unreliability'of'services.''

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This'has'in'the'main'resulted'in'unacceptable'lower'levels'in'passenger'numbers,'contraction'

in'market'share'and'reduced'revenue'collection.'The'external'creditors’'book'has'increased'

to'the'level'that'threatens'the'continued'trading'of'the'company.''

The'lack'of'rob ust'Information'and'Communication'Technology'(ICT)'solutions'which'is'a'basic'

requirement'in'any'bus'operations'has'also'contributed'to'the'multifaceted'challenges'that'

confronts' the' business.' These' challenges' include,' but' not' limited' to' inadequate' fleet'

management' and' monitoring,' poor' revenue' collection' and' protection' systems' and'

inadequate'inventory'and'materials'management.'

2.1. Why$is$the$business$in$this$state?$

During' the' 2014/2015' financial' year' the' company' posted' a' profit' of' R7' 920' 829.00,'

however'in'the'following' two' years' the' company' made' losses.' It' is' projected' that' the'

company'will'post'loss'of'over'R300'000'00.00'at'the'end'of'the'2018/2019'financial'year.'

It' is' clear' that' the' challenges' that' the' company' is' currently' experiencing' today' are' a'

manifestation'of'what'happened'since'2015/2016'financial'year.'

Management'has'taken'time'to'reflect'on'the'above'and'concluded'that'the'following'are'

some'of'key'reasons'the'company'has'deteriorated'over'a'period'of'time.'

a. Lack$of$core$technical$expertise:'The'Company'has'overtime'lost'individuals'with'core'

technical'expertise,'most'of'this'positions'have'not'being'filled'or'replaced'with'right'

skills'due'to'cash'flow'chall enges'in'the'business.'The'business'also'has'a'number'of'

employees'in'management'and'at'criti cal'junior'level'functions'without'core'technical'

skills.' This' challenge' permeate' in' a' number' of' areas' in' the' b usi ness' includin g' the'

collapse' of' the' fleet' maintenance' regime' in' the' Technical' Department.' The' high'

number'of'the'fleet'breakdowns'points'directly'towards'lack'of'core'technical'skills'in'

the'business.'This'situation'has'also'been'very'prevalent'in'the'operations'planning'

environment' like' b us' scheduling' and' dispatching' which' is' at' the' core' of' any' bus'

industry'operations.'D ue' to' cash'flow'challenges,'the'company' has' not'invested'in'

people'development'to'curtailing'this'challenges.'

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b. Lack$of$management$and$leadership$skills:'The'bu sin ess'is'operating'with'very'thin'

expertise' at' management' and' leadership' level.' This' has' also' resulted' in' the'

compression'in'roles'due'to'the'fact'that' managers'are'then'required'to'execute'and'

perform'roles'at'the'lower'levels'with'little'or'capacity'to'delegate.''

c. Lack$of$effective$employee$skills$development:'The' Co mpany'has'overtime'invested'

less' and' less' in' employee' skills' development' as' well' management' &' leadership'

development' du e' to' cash ' flow' constraints.' This' impacted' a' lot' on' the' skills' in' the'

company'across' all 'levels'of'the'business.'The'company'was'previously'accredited'as'

a'fleet'repairer'by'various'Original'Equipment'Manufacturers,'this'accreditation'has'

since'been'lost.'The'issue'of'ineffective'employee'skills'development'is'also'prevalent'

in'all'spheres'of'the'business.'''

d. Performance$ management:' The' C ompan y' has' implemented' performance'

management' in' 2018/19' and' need' to' inculcate' the' culture' of' performance'

management'to'hold'people'accountable.'Service'providers'are'also'made'to'account'

on'poor'service'deliver'through'supplier'performance'management'process.'$

3. VISION,$MISSION,$VALUES$AND$LEADERSHIP$

3.1. Vision:'To'be'the'leader'in'road'passenger'transport'solutions'to'the'nation'and'SADC'

' member'states.'

3.2. Mission:' We' provide' preferred,' sustainable,' high' quality,' seamless' and' affordable'

' road'passenger'transport'services.'

3.3. Values:'Autopax'aligns'with'the'values'of'PRASA'being:'

v Fairness$and$Integrity$-$Treating'ou r'customers'and'our'colleagues'the'same'as'we'

would'like'to'be'treated.'

v Service$excellence$-'Provide'the'kind'of'service'that'ensures'that'our'customer'leaves'

with'a'smile.'

v Performance$driven$-' D evelopin g'the'ability'to'venture'into'new'breakthrough'areas'

of'opportunity'whilst'offering'quality'products'to'our'customers.'

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v Safety$-'Ensuring'our'custo mers'and'co ll eagues'enjoy'their'journey'and'arrive'safely'

and'refreshed.'

v Communication$-'Sharing'information'with'our'customers'and'coll eagues'in'an'open'

and'honest'way.'

v Teamwork$ -' Working' together' with'our' customers' to'achieve' a' common'goal' and'

recognising'each'other’s'worth.'

3.4. Leadership$

The' business' need' to' embark' on' a' development' of' leadership.$ The' job' of' managers' and'

supervisors'at'Autopax'is'to'make'it'easier'for'their'employees'to'serve'customers'—'b oth'

internal' and' external.' Leading' other'people' at' Autopax' is' no t' a' right,' it'is' a' privilege' and'

responsibility'that'must'be'continuously'earned'by'serving'and'mentoring'others'to'help'them'

grow'by'sharing'information,'providing'respectful'feedback'and'being'accountable.''

Autopax' considers' its' leadership' as' conduit' of' its' value' system' and' has' thus' adopted' an'

approach'towards'transforming'each'leader' i nto 'a'“Servant$Leader”.'The'approach'towards'

servant'leadership 'emphasizes'the'serving'of'others'as'the'leader’s'number'one'prio rity,'a'

holistic' approach' to' work,' promoting'a' sense' of' community,' and'the' sharing' of' power' in'

decision'making.''

Complementary' to' the' organizational' values' as' detailed' earlier,' the' following' additional'

characteristics'or'attributes'will'be'actively'cultivated'in'the'leadership'of'team'Autopax.'

v Listening:'A'critical'communication'tool,'necessary'for'actively'demonstrating'respect'for'

others.'

v Empathy:'The'ability'to'mentally'project'one’s'own'consciousness'into'that'of'another'

individual.'

v Healing:' The' servant' leader' recognizes' the' shared' human' desire' to' find' wholeness' in'

one’s'self,'and'support'it'in'others.'

v Awareness:' The' ability' to' practice' “%).'--%7').( #!!#".,)%+3”' in' a' quest' to' maximized'

opportunities'for'Autopax.'

v Persuasion:' The' effective' servant-leader' builds' group' consensus' through' ‘gentle' but'

persistent'persuasion”'and'does'not'only'rely'on'position'as'a'source'of'power.'

v Conceptualizatio n :'The'servant'leader'must'conceive'solutions'to'problems'that'do'not'

currently'exist'today'(Scenario'Planning).'

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v Stewardship:' Organizational' stewards,' or' ‘trustees’' are' concerned' not' onl y' for' the'

individual' followers' within' the' company,' but' also' the' organization' as' a' whole' and' its'

impact'on'and'relationship'with'all'of'society.'

v Commitment$to$the$growth$of$people:'A'demonstrated'appreciation'and'encouragement'

of'others.'The'secret'of'institution'building'is'to'be'able'to'weld'a'team'of'such'people'by'

lifting'them'up'to'grow'taller'than'they'would'otherwise'be.'

v Courageous:$ Having' uncomfortable' conversation' and' saying' what' needs' to' be' said,'

communicating'openly'when'you' don’t' have' all' the' answers' and' making' a' decision' to'

move'ahead.'

v Perseverance:$Ability'to'persevere'even'when'the'going'is'tough'and'the'team'morale'is'

low.''

v Decisiveness:$Ability'to'make'quick'decisions'in'a'difficult'or'complicated'situation .$'

4. LEGISLATIVE$MANDATE$

The'crafting'of'the'Autopax'business'plan'takes'cognisance'of'the'legislative'environment'

within'which'the'company'operates'with'specific'reference'to'the'following:'

v The'National'Land'Transport'Act'(Act'5'of'2009).'

v Legal' Succession' Act' of' South' African' Transport' Services' (SATS)' Act' of' 1989' /+(

/3')&'&.'

v National'Land'Transport'Transition 'Act'(Act'22'of'2000).'

v Public'Finance'Management'Act'(Act'1'of'1999)'

v Companies'Act'(Act'71'of'2008)'

v Labour'Relations'Act'(Act'66'of'1995)'

v Employment'Equity'Act'(Act'55'of'1998)'

v Basic'Conditions'of'Emplo yment'Act'(Act'75'of'1997)'

5. PHILOSOPHY$BEHIND$OUR$BUSINESS$$

Autopax' as' a' subsidiary' of' the' Passenger' Rail' Agency' of' South' Africa' exist' to' service' the'

primary'mandate'of'PRASA.'The'company'has'a'substantial'impact'on'the'country’s'Integrated'

Public'Transport'Network'(IPTN).' It'is'based'on'this' view'that'Autopax'has'a'direct'impact'on'

the'socio-economic'transformation'and'initiatives'of'the'country.'This'Business'Plan'begin'to'

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ensure' that' Autopax' does' not' only' regain' its' position' as' a' leader' in' lon g' d istan ce' road'

passenger'transport'(including'the'cross'border'operations'i n'key'identified'areas),'but'wil l'

effectively' and' efficiently' support' Rail' Operations' within' the' PRASA' Group.' The' Autopax'

business'strategy'is'premised'on'the'fact'that'the'turnaround'of'PRASA'Rail'Operations'can'

be' fast-tracked' through' robust' functioning' of' the' bus' operations.' The' comp any' will' also'

strengthen'its'Charter'Services'operations'i n'its'quest'to'improve'its'financial'and'operational'

performance.''''

6. HISTORICAL$BUSINESS$PERFORMANCE$AND$CHALLENGES$

The' company' only' posted' a' profit' during' the' 2014/2015' financial' year.' At' the' end' of'

2018/2019' financial' year'the' total' amoun t' of' historic' debt' accumulated'in' the' past'three'

years' will' be' ci rca' R206' 267' 459.00' and' R603' 656' 501.00' which' is' made' up' of' external'

creditors'book'and 'PRASA'debt'respectively.'The'total'number'of'buses'fully'operational'on'

road' has' been' increased' to' circa' 180' per' month' during' the' 2018/2019' financial' years' in'

contrast'to'90'buses'per'month'during'the'last'quarter'of'2017/2018'financial'year.'Based'on'

the'above,'the'company'continues'to'identify'areas'that'requires'urgent'attention'to'improve'

the'financial'and'operational'performance'of'the'business'as'per'of'this'business'plan.''

a. Decrease$ in$ fleet$ availability' –' Whilst' the' number' of' operational' fleet' has' increased'

during'the'current'financial'year,'the'number'of'operational'fleet'remains'low.'More'than'

half'of'the'total'fleet'is'parked'at'the'depot'or'with'various'service'providers'due'to 'either'

mechanical' breakdowns' or' accidents.' The' reduction' in' fleet' availability' has' direct'

detriment'effect'on'revenue,'passengers'and'customer'satisfaction.''

b. Inadequate$fleet$maintenance$re gime'–'The'current'fleet'is'over'eight'(8)'years'old'and'

60%'of'the'fleet'has'exceeded'800'000'kilometres.'Due'to'the'age'of'the'fleet'the'cost'of'

maintenance'is'very'high.'The'current'financial'state'of'the'business'makes'it'difficult'to'

provide' adequate' fleet' maintenance' regime.' The' inadequate' preventative' fleet'

maintenance'regime'has'a'negative'impact'on'the' durable'l ifespan ' of'the'fleet'as'well'

reliability'of'the'service.'

c. Reduction$in$revenue$and$passenger$number$–'Since'the'2014/2015'financial'year,'the'

company'has'been'experiencing'a'decline'in'fare'revenue'coupled'with'increase'' in'

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net'losses.'This'is'directly'attributable'to'the'reduction'experienced'in'passenger'numbers'

due'to'reduced'fleet'available'for'all'operational'requirements.'The'fact'that'the'company'

is'operating'older'fleet'creates'a'challenge'in'terms'of'competitiveness'with'passengers'

preferring'new'fleet.''

d. Unsustainable$cost$structure$–'The'Company'has'experienced'a'marked'increase'in'the'

cost'structure'of'operating'the'business.'The'increase'in'the'operational'cost'is'as'' a'

result' of' reduced' revenue' collection.' Empl oyee' costs' constituted' 42%' of' operational'

expenditure'as'at'the'end'of'2018/2019'financial'year,'this'figure'i s'expected'to'remain'

the'same'at'the'end'of'2019/2020'financial'year.'The'other'operational'costs'that'have'

increased'in'the'last'three'financial'years'include'fuel'and'general'operational'costs.'''

e. Lack$ of$ infrastructure$ –' The' Company' does' not' have' the' requisite' infrastructure' to'

adequately' run' its' operations.' This' includes' Depots,' Information' and' Communication'

technology'and'fleet'maintenance'workshops.'This'contributes'directly'to'poor'balance'

sheet,'ineffective'revenue'collection'and'protection'systems'in'the'company'as'well'as'

inability'to'effectively'manage'all'key'resources'in'the'business'including'b ut'not'limited'

to'fleet,'fuel,'passengers'and'inventory.'

7. HISTORICAL$FINANCIAL$PERFORMANCE$

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8. MARKET$ANALYSIS,$PASSENGER$PROFILE$AND$PASSENGER$SATISFACTION$INDEX$

a. Market$Share$Analysis$

According'to'the'Lufthansa' stu dy'of'2012,'Autopax'brands'had'25%'Market'share'with in 'the'

long'distance'bus'passenger'industry.'This'study'was'however,'based'on'the'fleet'strength'of'

Autopax' and' route' network.' A' follow' up' study' was' conducted' which' evaluated' Autopax'

market'share'at'23%'of'the'market'and'was'based' on' competitor' revenue' and' passenger'

numbers.'

b. Customer$profile$Analysis$

TARGET$MARKET$(Research$results:$Nov$2015)$

City$to$City$

Translux$

Primary$Target$Market$

• LSM''2-'4'

• 95%'Black'

• Females'

• Age'18'–'65'

• Urban'(travelling'to'Rural)'

• Monthly'Income'–'R2000'–'R4000'

Primary$Target$Market$

• LSM'4'–'6'

• Majority'Black'

• Majority'Age:'18'–'35'(youth)'

• Over'50%'are'single'

• Monthly'Income'R2000'–'R10'000'

Reasons$for$Travel$

• Going'Home'

• Vacation'

• Trade$

Reasons$for$Travel$

• Going'Home'

• Vacation$

Why$City$to$City$

• Price''

• Routes'(travel'to'rural'areas)'

• They'believe'its'value'for'money$

Why$Translux$

• Luxury'and'Comfort'

• Speed'of'travel'

• Suitable'Route$

c. Industry$analysis$$

• 38'million'citizens'live'in'households'with'no'access'to'cars'

• 80%'of'adults'do'not'have'a'driver’s'license'

• 7'million'workers'and'learners'use'public'transport'

• 13.7'million'people'used'public'transport'at'least'once'a'week'while'7'million'use'a'car'

AE#,"*'F(;G5E(> ?H ID(

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d. Competitor$analysis$

Translux$

City$to$City$

Direct$Competitors$

• Greyhound'

• Inter'cape'

Direct$Competitors$

• City'liner'

• Eldo'Coaches'

• APM'

Indirect$Competitors$

• Low'cost'airlines$

Indirect$Competitors$

• Minibus'Taxi’s'

• Shosholoza'Meyl'Trains$

e. Key$Research$insights$on$Long$Distance$bus$passenger:$Choice$of$transport$mode$

• Cost'of'transport'-'Price'

• Speed'(number'of'“unproductive”'hours'spent)'

• Reliability'of'service'(including'departure'and'arrival'time)'

• Frequency'of'services'

• Safety'of'passengers'

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9. VALUE$PROPOSITION$

10. STRENGTHS,$WEAKNESSES,$$OPPORTUNITIES$AND$THREATS$(SWOT)$ANALYSIS$

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11. STRATEGY$AND$BUSINESS$PLAN$REVIEW$

The'strategy'and'business'plan'review'is'about'the'following'milestones:'

v The'strategy'and'business'plan'review'focuses'on'major'financial 'and 'operation al'

turnaround'of'the'business.'

v It'is'aimed'at'ensuring'that'Autopax'becomes'a'financial ly'viab le'entity,'capabl e'of'

delivering'on'PRASA’s'primary'mandate'as'per'the'Legal'Succession'Act.'

v It'is'also'aimed'at'repositioning'Autopax'to 'effectively'and'effi cientl y'supp ort'PRASA'Rail'

operations.'

v It'is'focused'on'investing'in'new'capacity'and 'resources'that'will 'meet'passenger'

demands'in'a'medium'to'long'term'horizon.'

v Reviewing'and'addressing'the'company’s'weak'balance'sheet.'

12. BUSINESS$PLANNING$AND$STRATEGIC$FRAMEWORK$

The'2019/2020'business'plan'will'ensure'that'whilst'it'support'the'company’s'core'strategic'

direction,'plan'also'begin'to'explore'its'strategic'growth'trajectory.'To'this'end'the'co mpany'

has'identified'possible'growth'opportunities'in'the'intercity'business,'Cross'Board'operations'

as' well' Charter.' The' company' will' improve' synergies' with' Rail' O perations' as' part' of' its'

strategic'growth'plans.'This'approach'wil l'require'the'company'to'review'its'fleet'capacity'to'

meet' the' anticipated' demand.' Measures' are' afoot' to' implement' this' growth' trajectory'

focusing'on'the'radical'fleet'recovery'plan.'''''

a. Planned$fleet$operations$(Bus$allocation)$

Growth$area$

Current$Allocation$

New$Allocation$

Intercity'Scheduled'services'

178'

260'

Charter'services'

33'

Cross'Boarder'services'

50'

4.$

Rail'Operations'

72'

Total$operational$fleet$

180$

415*$

*This'figure'is'inclusive'of'10%'(41)'Technical'spare'capacity.'

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b. The$strategy$–$Growth$focused$

The'company’s'growth'trajectory'strategy'in'about'the'increase'in'the'number'of'operational'

buses'and'will'pivot'around'the'following:'

v Organic$growth$in$Intercity$and$Cross$ Border$ operations'–'The'company'has'identified'a'

number'of'routes'that'present'a'growth'opportunity'for'the'business.'To'this'end,'the'

company' will' be' lodging' applications' with' the' relevant' authorities' with' the' aim' of'

increasing'the'number'of'intercity'services.''

v PRASA$Rail$operations'–'During'the'2014/2015'financial'year,'the'company'was'able'to'

effectively'and'efficiently'support'rail'operations'leading'into'inter-company'revenue'of'

over'R65'000'000.00.'The'Autopax' strategy'and'business'plan'are'aimed'at'returning'the'

company'to'this'position.'This'plan'will'assi st'PRASA'Rail'operations'during'occupations'

and'emergencies.'

v Cross$Border$operations'–'The'company'is'currently'operating'two'daily'services'between'

Gauteng' and' Maputo.' The' co mpany' has' recently' acquired' fourteen' (14)' permits' to'

operate'between' Gauteng'and'Zambia'(Lusaka).'The' company'is'also'in'the'process'of'

acquiring' addition al' cross' operating' permits' focusing' at' Swaziland,' Lesotho,' Namibia,'

Botswana'and'Zimbabwe.''

v Charter$services'–'The'charter'market'remains'a'huge'opp ortuni ty'for'Autopax'towards'

the'realisation'of'the'growth'trajectory'strategy.'The'company'has'in'the'last'two'financial'

years'failed'to'convert'a'number'of'charter'opportunities.'With'the'increase'in'the'number'

of'operational'buses,'the'company'will'be'in'a'position'to'fully'explore'this'market.''''

v Feeder$services$for$Metror ail'–'T he'co mpany'i s'exp lorin g'pl ans'with'Metrorail'with'the'

aim'of'ensuring'that'it'is'in'a'position'to'provide'Metrorail'with'feeder'services'as'per'the'

Legal'Succession'Act.'

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c. The$Strategic$framework$

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d. Key$strategic$levers$

Strategic$

levers$

Strategic$

intent$

Focus$areas$

Outcomes$

Financial$

management,$

viability$and$

sustainability$

Financial'

viability'and'

sustainability'

Route'

optimisation'

Improve'route'profitability'and'

performance'

Cost'

optimisation'

Implement'asset'management'

strategy'

Reduction'in'the'cost'of'doing'

business'

Establish'optimal'funding'model'

(OPEX'and'CAPEX)'

Revenue'

Optimisation'

Achieve'fare'revenue'targets.'

Strengthen'revenue'inspection'

capacity'

Achieve'solvency'and'liquidity'ratios'

Effective$and$

Efficient$

Operations$

Operational'

exellence'and'

increased'

reliability'

Asset'

optimisation$'

Operate'roadworthy'fleet'

Reduction'in'breakdowns'

Reduction'in'maintenance'costs'

Revenue'

Optimisation'

Operating'clean'buses'

On'time'departures'

Enable'people'and'processes'with'

Information'and'Communication'

Technology'

Achieve'accredited'status'as'a'

preferred'repair'and'maintenance'

centre'

Documented'Standard'Operating'

Procedures'

Contribute'to'

socio-

economic'

policies'of'

Government'

Cost'

optimisation'

Black'economic'empowerment'

Improve'mobility'of'citizens'

Promote'enterprise'development'

Employment'creation'(Internship'and'

Leanership)'

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Supply'Chain'

optimisation'

Cost'

optimisation'

Implement'Strategic'sourcing'

Corporate'

Governance'

Control'

optimisation'

Eradication'of'irregular'expenditure'

Eradication'of'fruitless'and'wasteful'

expenditure'

Enhanced'ethical'culture'

Compliance'to'policies,'procedures'

and'legislation'

Clean'audit'

Excellent$

Customer$

service$

High'levels'of'

Customer'

centricity'

Customer'

centricity'

Improved'customer'satisfaction'

index'

Agile'and'customer'focused'

employees'

Passenger'growth'

Professionalization'of'service'offering'

Rebuild'brand'trust'and'loyalty'

Performance$

excellence$

Capacitation'

of'employees'

Performance'

management'

Employee'training'and'development'

Embedded'performance'contracting,'

assessment'and'reward'regime'

Enabling'a'performance'culture'

Fit'for'purpose'organisational'

structure'supported'by'proper'job'

grading'and'salary'structure'regime'

Leadership'and'management'

development'programmes'

Implement'business'based'Change'

management'initiatives'

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13. BUSINESS$OBJECTIVES$$

a. Route$optimization$

The' company' continues' to' review' the' current' routes' and' the' schedule' with' a' view' of'

identifying'profitable'and'non-profitable'routes.'This'process'has'culminated'in'the'reduction'

of'certain'routes'with'a'view'to'curtail'the'cost'of'doing'business.'The'process'will'ensure'that'

profitable'routes'will'are'in'a'position'to'generate'a'minimum'of'75%'seat'utilisation'on'each'

service'off-peak'and'95%'seat'utilisation'during'peak.'All'identified'non-profitable'routes'will'

be'terminated'with'after'due'monitoring.''

It'is'management’s'considered'view'that'the'implementation'of'the'Route'Optimisation'will'

lead'the'company'to'realise'the'desired'financial$management,$viability$and$sustainability.''

b. Revenue$optimisation$

The'company'is'embarking'o n'a'radical'organic'growth'strategy' th rough'market'penetration'

and'market'development.'The'main'aim'of'pursuing'this'radical'growth'strategy'will'be'to'

ensure' that' the' company' increases' its' market' share' through' improved' and' reliable' bus'

service.'The'market'penetration'strategy'will'have'a'high'success'rate'given'the'passenger'

loyalty' towards' both' Brand' Translux' and' City-to-City.' On' the' other' hand' the' market'

development' growth' strategy' will' be' realised' through' strengthening' and' resourcing' the'

Autopax'Charter'Services,'complete'support'of'Rail 'Operations'and'Cross'Border'Services.'The'

Revenue' optimisation' will' fo cus' on' Revenue' generation,' Revenue' collection' and' Revenue'

protection.'

It'is'management’s'considered'view'that'the'implementation'of'the'Revenue'optimisation'will'

lead'the'company'to'realise'the'desired'financial$management,$viability$and$sustainability.''

c. Asset$optimisation$$$

Through'the'process'of'defining'what'will'make'Autopax'work,'the'business'plan'and'strategy'

has'determined'the'criticality'of'Autopax'operating'the'optimum'complement'of'fleet.'The'

company' will' immediately' embark' on' a' process' of' identifying' and' utilising' just' the' righ t'

optimum'fleet'level.'The'process'will'be'support'by'a'robust'fleet'maintenance'regime'that'

will' ensure' that' all' operational' vehicles' remain' on' the' road' all' the' times.' Based' on' this'

position' Autopax' will' also' ensure' that' there' is' adequate' fleet' to' support' Rail' Operations,'

strengthen'Charter'services'and'pursue'the'Cross'Boarder'market.''

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The'implementation'of'the'asset' o pti misatio n'process'will'ensure'that'the'company'realises'

the'desired'effective$and$efficient$operations.'

d. Cost$optimisation$

Management' h as'engaged'in'a'robust'and'detailed'process'of'understanding'the'company’s'

revenue'generation'potential'and'the'cost'of'doing'the'business.'This'process'was'intended'

to' ensure' that' the' company’s' cost' structure' is' proportionate' to' th e' revenue' generation.'

Other' measures' that' will' be' imp lemented' to' realise' this' objective' will' include' total'

moratorium'on'all'external'permanent'appointments,'unless'approved'by'the'Chief'Executive'

Officer.'Through'this'process'the'company'will'also'review'the'impact'of'inter-company'costs'

on'the'financial'management,'viability'and'sustainability'of'Autopax.'The'fact'that'Autopax'

does'not'own'the'infrastructure'that'it'uses'to'operate'its'core' bu sin ess' po ses' a' ch all enge'to '

the'balance'sheet'of'the'company.'

The'implementation'of'this'objective'will'ensure'that'the'company'realises'the'strategic'l ever'

of' financial$ management,$ viability$ and$ sustainability' as' well' as' effective$ and$ efficient$

operations.$$

e. Control$optimisation$

Based' on' the' harsh' reviews' by' the' Auditor-General' South' Africa' an d' internal' Risk'

Management,' the' Business' plan' will' also' focus' on' reviewing' an d' improving' the' control'

environment.'This'process'will'focus'on'review'of'all'business'processes,'policies'and'standard'

operating'procedures'to'ensure'that'the'control'environment'is'strengthened.''

Autopax'like'many'o f'its'competitors'in'the'industry'is'operating'in'a'highly'technologically'

advanced' industry.' To' this' end,' the' business' plan' will' also' focus' on' implementing' the'

Information'and'Communication'Technology'that'supports'the'day-to-day'operations'of'the'

business.'The'company'will'also'ensure'that'i n'the'near'future'it'explores'the'opportunities'

offered'by'the'world'of'Internet'of'Things'(IoT)'for'improving'efficacies'in'the'operations'of'

the'business'in clud in g'implementing'measures'that'will'differentiates'the'company'from'its'

competitors'in'the'eyes'of'the'passenger.'The'objective'of'optimising'the'co ntrol'environment'

will'also'require'entrenching'the'culture' of'consequence'management'in'line'with'the' Board'

approved'Performance'Management'policy.''

This' objective' will' ensure' that' the' business' realises' the' strategic' lever' o f' effective$ and$

efficient$operations'and'performance$excellence.'

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f. Supply$Chain$optimisation$

Due' to' the'nature' of' its'operations,' Autopax' requires'a' strengthened' and'fully' functional'

procurement'capability.' This'will'be'supported'by' a'business'focused'and'aligned' demand'

management'framework.'The'recently'board'approved'Supply'Chain'Management'policy'will'

implemented' swiftl y' supported' by' line' management' capacity' building' programmes.' The'

company'will'place'most'emphasise'on'strategic'sourcing'and'supplier'development'focusing'

on'Women,'Youth'enterprises'and'Cooperatives.''

This'objective'will'ensure'that'Autopax'realises'the'strategic'lever'of'effective$and$efficient$

operations.$

g. Performance$management$

Instilling'a 'p e rfo r m a n c e' management'based'culture'in'the'business'is'at'the'centre'of'the'company’s'

quest'towards'performance'excellence.'The'Board'has'approved'the'company’s''policy'on'

Performance'Management.'All'employees'on'Management'levels'will'be'contracted'on'performance'

management.'The'company'will'also'ensure'consequence'management'in'the'business'to'entrench'

the'perform an ce'b ase d'cu lture.'

This'objective'will'ensure'that'Autopax'realises'the'strategic'lever'of'Performance$excellence.$

h. Customer$centricity$

Autopax' acknowl edges' that' it' is' operating' within' a' highly' competitive' environment.' The'

business' plan' will' ensure' that' the' company' realise' its' full' potential' through' passenger'

confidence'in'the'two'brands.''The'company'will'also'focus'on'reclaiming'its'apex'position'as'

a'dominant'player'in'the'industry.'This'objective'will'be'realised'through'on-time'departure'

management,'effective'en-route'monitoring'with'consequence'management.'The'company'

will'ensure'improved'quality'of'service'through'focused'customer'service'and'provision'of'

passenger' friendly' clean' fleet.' The' communication' between' the' Operations' and' Sales'

departments'will'be'strengthened'to'ensure'that'passenger'experience'is'improved.'This'will'

led'to'increase'in'market'share'and'improved'customer'satisfaction'index.'

This' objective' will' ensure' that' Autopax' realises' the' strategic' lever' of' excellent$ customer$

service.$ It' is' management’s' considered' view' that' the' implementation' of' the' customer'

centricity'will'lead'the'company'to'realise'the'desired'Excellent'Customer'Service.'

'''

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14. Appendices$

14.1. 2019/2020'Predetermined'Objectives'

14.2. 2019/2020'Annual'Performance'Plan'(APP).'

14.3. Business'plan'Risk'register''

14.4. 2019/2020'Budget'

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15.1.$ 2019/2020$Predetermined$Objectives$

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Business'Plan'2019/2020''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''Page'22'of'43'

Business'Plan'2019/2020''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''Page'20'of'21'

15.2.' 2019/2020'Annual'Performance'Plan'(APP).! !

Fa re%reven ue R441%579%851%

Increa s e%revenue%to%R%761%480%558%by%

Ma rch%2020

R%186%572%673 R%186%442%503 R%198%957%108 R%189%528%274

Fa re%reven ue -Luggage R1%336%020%

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Liquidity(ratio Improve%Liquidi ty%ratio 0.22

Improve%liquidi ty%ratio%to%0.47%%by%March%

2020

Increase liquidity ratio to 0.28 Increase liquidity ratio to 0.34 Increase liquidity ratio to 0.4 Increase liquidity ratio to 0.47

Solvency(ratio Improve%Sol vency%rati o 0.30

Improve%solvency%rati o%to %0.7%%by%March%

2020

Increase solvency ratio to 0.4 Increase solvency ratio to 0.5 Increase solvency ratio to 0.6 Increase solvency ratio to 0.70

Fi nancial(Viability(

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