ANNUAL REPORT

2017

Dear colleagues, partners, clients!

The year 2017 for the SJSC “Latvijas gaisa satiksme” (LGS) was very active, intense and successful. We have managed to increase the number of flights operated and are glad that our hard job has paid back and brought us success.

LGS cares for a long-term development of the company to continue provision of safe and quality air navigation services in future. This is why we continue to invest in the devel-opment of technologies and improvement of the personnel skills. I would like to mark that in 2017 we have made a significant progress within our new ATC tower project which we plan to accomplish in 2023.

At the same time, we have been able to es-sentially increase remuneration of ATCOs and other employees of LGS and have kept improving working conditions.

I want to express my gratitude to the employ-ees of LGS for this year as well as the Minis-try of Transport, our clients and partners for support. Only together we can reach success.

Sincerely Yours,

Dāvids Tauriņš, Chairman of the Board

ABOUT US

VISIONLGS aims to become the most highly estimated air navigation services’ pro-vider in the region according to the fol-lowing criteria:

• Safety and quality of the provid-ed services;

• Financial efficiency;• loyalty of employees based on

good working conditions, career possibilities and competitive re-muneration.

MISSIONLGS ensures safe aircraft traffic provid-ing air navigation services effectively and efficiently on a stable long term basis.

COMPETENCELGS optimizes air space utilization pro-viding effective and reliable air naviga-tion services according to its compe-tence and prioritizing flight safety at the highest level. High quality service provision for adequate and competitive price is the main business principle of the company.

As a provider of air navigation servic-es LGS offers its customers air traffic management (ATM), meteo (MET), aer-onautical information (AIS), communi-cation, navigation and surveillance ser-vices (CNS).

The company provides air traffic services for all general air traffic (GAT) and all mili-tary flights corresponding to GAT. Aviation search and rescue coordination center is in the competence of LGS as well.

LGS is a client oriented company oper-ating in the market economy circum-stances and supplying all the air space users within the territory of the Republic of Latvia with services of equal quality in accordance with international standards. LGS main income source is air navigation charges for the provided services. LGS is not receiving financial support from the state budget and is one of the biggest tax payers in the Republic of Latvia.

LGS is the only provider of air traffic ser-vices in Latvia. Being a company operat-ing in a civil aviation sector LGS is con-trolled by the Ministry of Transport and supervised by the Civil Aviation Agency of Latvia (LCAA).

LGS is a company providing air navigation services in the Riga Flight Information region (FIR) to all the air space users since October 21 1991.

THE COMPANY STRUCTURE

BOARD OF LGS

The only shareholder of LGS is the Ministry of Transport of the Republic of Latvia. The company is administered by the Executive Board in compliance with the legis-lative acts, statutes of the company and decisions of the shareholder. The Executive Board organizes the work of the company according to the international standards, recommendations and the International Civil Aviation Organization (ICAO) regula-tions. The company’s monitoring is provided by the Council.

DĀVIDS TAURIŅŠ, CHAIRMAN OF THE BOARD

ELMĀRS ŠVĒDE, BOARD MEMBER,

responsible for the investments and the Technical Department

ILZE ALEKSANDROVIČA, BOARD MEMBER,

in charge of the Development Department

IVETA VIRSE, BOARD MEMBER, responsible for the

Administrative Department

The structure of the LGS has been through several changes in 2017 – the Techni-cal maintenance unit of the Technical Department has been disembodied and the stuff loads have been reorganized within the department, and two units have been merged in the Development Department – Business planning and development unit and International co-operation co-ordination unit were merged into one Unit of the Strategic Planning.

DINS MERIRANDS, CHAIRMAN OF THE COUNCIL

EDMUNDS BEĻSKIS, MEMBER OF THE COUNCIL

ZINTA ZĀLĪTE-RUKMANE, MEMBER OF THE COUNCIL

COUNCIL OF THE LGS

THE COMPANY STRUCTURE

COMPANY STRUCTURE

EXECUTIVE BOARD (VA)

COUNCIL (PA)

ADVISORS TO THE BOARD, PRESS SECRETARY VP, VS

AIR TRAFFIC MANAGEMENT DEPARTMENT GSV

TECHNICAL DEPARTMENT TD

ADMINISTRATIVE DEPARTMENT AD

DEVELOPMENT DEPARTMENT ATD

QUALITY ASSURANCE DEPARTMENT KND

Safety Division (DVN)

Training Unit (MC)Finance Unit (FN)Air Traffic Control Center (GSVC)

Aerodrome Control Center (TWR)

Briefing (BRF)

Air Traffic Flow Management Division (LPVD)

Aeronautical Information Division (ANID)

Air Space Management Cell (GTIVN)

Riga Tower (TR)

ATRACC Unit (AC)

Radar Unit (RL)

Navigation Unit (RN)

Electrical Power Unit (GE)

Communication Unit (TK)

IT Unit (IT)

Meteorological Unit (MN)

Building and Transport Unit (CT)

Legal Unit (JN)

Procurement Unit (IEN)

Infrastructure Unit (SN)

Security Service (DD)

HR and Administrative Unit (PLN)

Quality and Auditing Division (KV)

Strategic Planning Unit (SPN)

Liepaja Air Navigation Unit (LANG)

AIR TRAFFIC IN 2017 AND THE FINANCIAL KEY RATIOS

268 967 flights were operated in 2017 within the Riga FIR, and that is for 21 968 flights or 8.9% more than in 2016. The number of en-route flights has in-creased for 8.5%, but number of flights to/from Riga terminal has increased for 9.9%. The number of the planned flights has been increased for 8.6%.

The main increase of the number of flights has been caused by rapid devel-opment of the national airline airBaltic and the International Airport “Riga” in-creasing the number of the passengers for 13% up to almost 6,1 million that eventually resulted in increase of the number of flights to/from Riga terminal for 9.9%. The overall economic growth and the traffic rise in the segment Rus-sia-Europe for 14.6% are also to be mentioned important in comparison with the decline in 2015 and 2016.

The most part of the income of LGS is related to the core business – air nav-igation services and this number in 2017 rose for more than 3 million EUR

reaching EUR 27 415 139 EUR that is for 13.1% more than in 2016.

The company management succeeded in balancing expenses being precise at fulfilling the plans of both European and local importance and made it possible to invest in the development of the com-pany and 5,2 million EUR were invested into the share capital of the company.

As a result, unaudited profit in the 2017 was 3 098 692 EUR after taxes.

The value of the assets was increased for 3 576 898 EUR (11.4%) by the end of the year and reached EUR 34 864 263. Com-plying the regulations of the European Union LGS has been released from div-idends’ payment into the budged for the 2017 and the next two years to allowing to invest in development of the company.

Unit rate of the LGS is of a competitive level with the neighboring countries  – terminal unit rate is 98,73 EUR and the en-route unite rate is 27,46 EUR.

TECHNICAL MODERNIZATION

There are on-going works within the projects of the Performance Based Nav-igation (PBN) implementation in Riga FIR, modernization of the Controller-pi-lot data link communication (CPDLC) system. Co-operation with the Interna-tional Airport “Riga” is continued within the project of the A-CDM.

DataLink  – implementation of digital data transmission according to the EC regulations No. 310/2015 plays a very important role in the field of commu-nications. An essential improvement of the service quality was made in 2016–2017 by modernization of the Multilat-eration System in the Riga aerodrome increasing the number of sensors and updating central processing and trans-mission stations.

A substantial investment in aviation meteorological services is the wind measurement system in 3D environ-ment for measuring the wind veloci-ty on high levels, the project that has been started on 2017.

In 2017 LGS proceeded with moderniza-tion and enhancement of the automat-ed air traffic control system (ATRACC). DIVOS 3 log voice recording system that records information from the ATCOs job stations and helps to investigate possible incidents was enhanced in 2017 as well.

Enhancement of the LGS data center and several LGS support infrastructure improvements were realized in 2017 including Babīte Transmission center warehouse construction works and ter-ritory improvement.

In 2017 LGS started a sketch design competition for the new ATC tower in Riga. The new tower shall be in operation on 2023.

INTERNATIONAL CO-OPERATION

In 2017 LGS continued to participate in different international organizations as North European Functional Airspace Block (NEFAB) and Borealis Alliance. The 2nd part of the Free Route Airspace (FRA) was held out within the Borealis Alliance by successful implementation of the FRA in the air spaces of North European countries.

Dāvids Tauriņš, CEO of LGS was elect-ed as the Chairman of the CEO Board of the NEFAB Program. In 2017 LGS

employees were delegated to carry out duties of a NEFAB Financial control and NFEAB coordinator.

Our specialists are actively and on a high professional level carrying out duties of ICAO Air Traffic Management Group East (ATMGE) CEO and Aeronau-tical Information Management group secretary and our representative was a Deputy Head of the Route Development group (RDGE).

To find out the clients’ opinion on the quality of services provided by LGS and to understand the needs of the parties involved, LGS organizes regular meet-ings with the partners – national airline “airBaltic”, colleagues from the airport “Riga”, air space users, military struc-tures, air navigation information provid-ers and air navigation data receivers to discuss the most important issues on provision of air navigation services.

In 2017 LGS implemented a Business Management System and to improve the whole quality system of the company we have started to work on structural rep-resentation of the processes to obtain a detailed information on LGS functional systems and processes and fulfillment of the goals set.

KPIs and goals of the LGS are defined by the RFP 2 for the reporting period 2015–2019.

LGS QUALITY SYSTEM

In the field of safety management dur-ing the report year the main goal of LGS was to improve the safety occurrences reporting, analysis, KPIs and safety in-dicators monitoring, support of NEFAB activities safety management and oth-er activities. LGS safety management system is based on the approved LGS air navigation services safety policy ac-cording to the requirements of ICAO and European Union.

In 2017 LGS safety management effi-ciency was assessed by the European Aviation Safety Agency (EASA) at Level C and the company’s Just Culture was

approved as well. LGS continued train-ing and improvement of the professional skills of the safety personnel.

Company provided risk identification and mitigation of the systems and changes in the procedures related to the ATC. 43 safety cases on assessment of the changes in systems were prepared.

Exchange with the safety management data related to the operative stage was implemented and successfully used within the common projects of NEFAB and FRA/NEFRA.

SAFE AIR TRAFFIC

In 2017 LGS continued to carry out per-sonnel policy anticipating an on-going growth and development of professional competencies. LGS has implemented and keeps maintaining a competitive remuneration and rewards system, safe and modern working conditions as well as social guaranties program.

HR POLICY AND WORKING ENVIRONMENT

Besides the labor regulations defined by the state and local legislation acts LGS produces a Collective Agreement to provide its employees with benefits regarding the employment and social guaranties, labor safety and public health issues.

By the end of the 2017 LGS employed 350 employees.

One of the basic guidelines of LGS personnel strategy is an educated and com-petent employee. LGS provides regular personnel training and maintenance of the professional skills in compliance with the “Eurocontrol”, ICAO, CAA, World Meteor-ological Organization (WMO) and local legislative acts and keeps ensuring regular development of the English language skills.

EDUCATED AND COMPETENT EMPLOYEES