Cost-efficiency - Bulgaria

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PRB monitoring

▪ The 2020 actual service units (1,766K) were 56% lower than the actual service units in 2019 (4,021K).

▪ Bulgaria reduced total costs in 2020 by 15 M€2017 (-14%) compared to 2019 actual costs. The reduction is mainly due to a decrease of 13 M€2017 (-18%) in staff costs, attributable to a reduction of 30% in salaries.

▪ Cost of capital in 2020 increased by 0.3 M€2017 (+3%) due to an increase of the asset base.

▪ BULATSA spent 18 M€2017 in 2020 related to cost of investments, 9% less than planned in the 2019 draft performance plan (19 M€2017). The decrease is induced by a lower asset base than planned in the 2019 draft performance plan.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 200 NA NA NA
Determined costs 205 115 126 129
Difference costs -5 NA NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 2.0% 2.0% 2.0%
Determined inflation index NA 109.6 111.8 114
Actual inflation rate NA NA NA NA
Actual inflation index NA NA NA NA
Difference inflation index (p.p.) NA NA NA NA

AUC vs. DUC

In the combined year 2020-2021, the AUC was lower than the planned DUC (-4.0% or -3.81 BGN2017 or -1.95 €2017). This results from the combination of slightly higher than planned TSUs (+0.9%) and lower than planned en route costs in real terms (-3.1%, or -11.8 MBGN2017).

En route service units

The difference between actual and planned TSUs (+0.9%) falls within of the ±2% dead band. Hence, the resulting gain of 3.3 MBGN is entirely retained by the ANSP.

En route costs by entity

Actual real en route costs for 2020-2021 are -3.1% (-11.8 MBGN2017, or -6.0 M€2017) lower than planned. This reflects the results across all the entities in the charging zone: main ANSP - BULATSA (-2.9%, or -5.3 M€2017) and the NSA/EUROCONTROL (-4.7%, or -0.7 M€2017).

En route costs for the main ANSP at charging zone level

The lower than planned en route costs in real terms for BULATSA in 2020-2021 reflects a combination of:
- lower staff costs (-3.8%), resulting from a reduction of salaries;
- lower other operating costs (-7.4%), reflecting delays and postponement of investment projects, specialised consulting services, trainings and travel;
- higher depreciation costs (+2.4%), reflecting the implementation of the investment plan; and,
- slightly higher cost of capital (+0.1%), resulting from slightly higher than planned asset base.

Actual unit cost incurred by the users (AUCU) (PI#1)

AUCU components (€/SU) – 2020-2021
Components of the AUCU in 2020-2021 €/SU
DUC 51.24
Inflation adjustment 0.33
Cost exempt from cost-sharing -0.13
Traffic risk sharing adjustment 0.00
Traffic adj. (costs not TRS) -0.06
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -0.56
Application of lower unit rate 0.00
Total adjustments -0.41
AUCU 50.83
AUCU vs. DUC -0.8%
Cost exempt from cost sharing by item - 2020-2021 €'000 €/SU
New and existing investments 170.5 0.04
Competent authorities and qualified entities costs -251.3 -0.06
Eurocontrol costs -457.9 -0.11
Pension costs 25.5 0.01
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -513.1 -0.13

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in combined year 2020-2021 (99.38BGN or 50.83€) is -0.8% lower than the nominal DUC (100.18BGN or 51.24€) which includes DUC initially charged: 57.75BGN (or 29.53€); and to be charged: 42.44BGN (or 21.70€). The difference between these two figures is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+0.65BGN or +0.33€), to be charged to the airspace users in future years.
- the deduction of the traffic adjustment (-0.11BGN or -0.06€) for the costs not subject to traffic risk sharing to be reimbursed in future years;
- the deduction of the other revenues (-1.09BGN or -0.56€);
- and the impact of adjustments resulting from the costs exempted from cost risk sharing mechanism (-0.25BGN or -0.13€).

The share of regulatory result in the AUCU is 15.6%.

Regulatory result (RR)

BULATSA net gain on en route activity in the Bulgarian charging zone in the combined year 2020-2021
BULATSA’s net gain amounts to +15.2 MBGN (+7.8 M€), as a combination of a gain of +11.9 MBGN (+6.1 M€) arising from the cost sharing mechanism and a gain of +3.3 MBGN (+1.7 M€) arising from the traffic risk sharing mechanism.
BULATSA overall regulatory results (RR) for the en route activity
Ex-post, the overall RR taking into account the net gain from the en route activity mentioned above (+15.2 MBGN or +7.8 M€) and the actual RoE (+48.1 MBGN or 24.6 M€) amounts to +63.3 MBGN or +32.4 M€ (16.8% of the en route revenues). The resulting ex-post rate of return on equity is 9.2%, which is higher than the 7.0% planned in the PP.