Cost-efficiency - Czech Republic

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PRB monitoring

▪ The 2020 actual service units (1,138K) were 61% lower than the actual service units in 2019 (2,904K).

▪ The Czech Republic reduced total costs in 2020 by 21 M€2017 (-17%) compared to 2019 actual costs. The reduction is mainly due to a decrease of 16 M€2017 (-22%) in staff costs, due to suspension of non-basic wages benefits, reduction of pension contribution, managerial positions and FTEs. Cost of capital also decreased notably by 2.3 M€2017 (-25%) due to a lower asset base and WACC.

▪ ANS CR spent 28 M€2017 in 2020 related to cost of investments, 29% less than planned in the 2019 draft performance plan (39 M€2017).

▪ The decrease in cost of investments is due to a reprioritization of investments (main changes occurred in other new investments) to maintain financial stability in response to COVID-19.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 196 NA NA NA
Determined costs 203 118 126 128
Difference costs −7 NA NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 2.0% 2.0% 2.0%
Determined inflation index NA 112.8 115 117.3
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 en route AUC (2,016.56 CZK2017 or 76.64 €2017) was lower by -3.5% (-74.07 CZK2017 or -2.82 €2017) comparing to the DUC (2,090.64 CZK2017 or 79.46 €2017). This was the sole effect of the lower than planned en route costs in real terms (-3.5%, -179.2 MCZK2017 or -6.8 M€2017).

En route service units

There is no difference in the number of TSU, as the figures used in the final version of the RP3 PP for the forecasted traffic for years 2020 and 2021 were in line with actuals.

En route costs by entity

Actual en route costs are -3.5% lower than planned (-6.8 M€2017) which is mainly driven by the lower by -3.6% (or -5.8 M€2017) costs for the main ANSP (ANS Czech Republic) and for the NSA/EUROCONTROL, -4.4% (or -1.1 M€2017). Actual 2020-2021 costs for METSP were slightly above plan (+2.1%).

En route costs for the main ANSP at charging zone level

The lower than planned en route costs in real terms for ANS CR (-3.6%, or -5.8 M€2017) result from:
- lower than planned staff costs by -1.4% (or -1.3 M€2017);
- lower other operating costs by -15.9% (or -3.8 M€2017);
- lower depreciation by -0.3% (or -0.1 M€2017); and
- lower cost of capital by -3.5% (or -0.5 M€2017);
- slightly higher deduction for VFR exempted flights (+3.0%).
The lower execution of costs in 2020-2021 were the effect of measures implemented by ANS CR, and in particular: cancelation of benefits, limitation of the contribution to supplementary pension savings, reduction of basic salary and reduction in the number of staff. In the area of other operating costs the travel, maintenance and training costs were reduced.

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

AUCU components (€/SU) – 2020-2021
Components of the AUCU in 2020-2021 €/SU
DUC 84.80
Inflation adjustment 0.25
Cost exempt from cost-sharing −0.72
Traffic risk sharing adjustment 0.00
Traffic adj. (costs not TRS) 0.00
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues −0.23
Application of lower unit rate 0.00
Total adjustments −0.69
AUCU 84.11
AUCU vs. DUC −0.8%
Cost exempt from cost sharing by item - 2020-2021 €'000 €/SU
New and existing investments −610.3 −0.25
Competent authorities and qualified entities costs 11.3 0.00
Eurocontrol costs −1,188.8 −0.49
Pension costs 57.3 0.02
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing −1,730.4 −0.72

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in the combined year 2020-2021 (2,190.56 CZK or 84.11€) is -0.8% lower than the nominal DUC (2,208.42 CZK or 84.80€) which includes DUC initially charged: 1,237.66 CZK (or 47.60€); and to be charged: 970.76 CZK (or 37.20€). The difference between these two figures (-17.86 CZK/SU or -0.69€/SU) results from:
- the positive inflation adjustment (+6.41 CZK/SU or +0.25€/SU) resulting from higher than planned inflation;
- the deduction of the adjustment for costs exempt from cost-sharing (-18.33 CZK/SU or -0.72€/SU), to be reimbursed in future years; and
- the deduction of other revenues (-5.94 CZK/SU or -0.23€/SU).

The share of the regulatory result in the AUCU (before the deduction of other revenues) is 9.6%.

Regulatory result (RR)

ANS CR’s net gain on activity in the en route charging zone in the combined year 2020-2021
ANS CR’s net gain amounts to +152.1 MCZK (or +5.9 M€) and fully resulting form the gains from the cost sharing mechanism.
ANS CR’s 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 (+152.1 MCZK) and the actual RoE (+353.7 MCZK or +13.6 M€) amounts to +505.8 MCZK or +19.5 M€ (11.2% of the en route revenues). The resulting ex-post rate of return on equity is 9.9%, which is higher than the 7.0% planned in the PP.