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    Cost-efficiency - Estonia

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    Terminal charging zone

    Unit cost (KPI#1)

    Actual and determined data
    Total costs - nominal (M€) 2020-2021 2022 2023 2024
    Actual costs 5 NA NA NA
    Determined costs 5 2 3 3
    Difference costs 0 NA NA NA
    Inflation assumptions 2020-2021 2022 2023 2024
    Determined inflation rate NA 2.5% 2.1% 1.9%
    Determined inflation index NA 110.4 112.7 114.8
    Actual inflation rate NA NA NA NA
    Actual inflation index NA NA NA NA
    Difference inflation index (p.p.) NA NA NA NA
    Focus on unit cost

    AUC vs. DUC

    In the combined year 2020-2021, the terminal AUC was -7.2% (or -19.44€2017) lower than the planned DUC. This results from the combination of higher than planned TNSUs (+5.6%) and lower than planned terminal costs in real terms (-2.0%, or -0.1 M€2017).

    Terminal service units

    The difference between actual and planned TNSUs (+5.6%) falls outside the ±2% dead band, but does not exceed the ±10% threshold foreseen in the traffic risk sharing mechanism. The resulting gain of additional terminal revenues is therefore shared between the ATSP and the airspace users, with the ATSP (EANS) retaining an amount of +0.1 M€2017.

    Terminal costs by entity

    Actual real terminal costs are -2.0% (-0.1 M€2017) lower than planned. This is driven by the main ANSP, EANS (-2.0%, or -0.1 M€2017) and NSA (-2.3%, or -0.01 M€2017).

    Terminal costs for the main ANSP at charging zone level

    The lower than planned terminal costs in real terms for EANS (-2.0%, or -0.1 M€2017) result from:
    - lower staff costs (-5.7%);
    - lower other operating costs (-8.3%), due to implementation extensive cost-cutting measures to reduce losses. Travelling expenses, rental expenses (especially communication service rental costs) and training expenses were lower than planned and other cost items were cut where possible;
    - lower depreciation (-5.5%), due to the postponement of some investments to 2022 and further;
    - higher cost of capital (+41.9%), resulting from the approval of an additional shareholder investment in equity, leading to higher cost of capital, although the rate of return on equity remained unchanged.

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

    AUCU components (€/SU) – 2020-2021
    Components of the AUCU in 2020-2021 €/SU
    DUC 280.57
    Inflation adjustment 2.02
    Cost exempt from cost-sharing −1.49
    Traffic risk sharing adjustment −5.40
    Traffic adj. (costs not TRS) −2.82
    Finantial incentives 0.00
    Modulation of charges 0.00
    Cross-financing 0.00
    Other revenues −64.08
    Application of lower unit rate 0.00
    Total adjustments −71.77
    AUCU 208.80
    AUCU vs. DUC −25.6%
    Cost exempt from cost sharing by item - 2020-2021 €'000 €/SU
    New and existing investments 0.0 0.00
    Competent authorities and qualified entities costs −14.8 −0.77
    Eurocontrol costs 0.0 0.00
    Pension costs −13.8 −0.72
    Interest on loans 0.0 0.00
    Changes in law 0.0 0.00
    Total cost exempt from cost risk sharing −28.6 −1.49
    Focus on AUCU

    The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in combined year 2020-2021 for Estonia terminal charging zone (209.52€) is -25.3% lower than the nominal DUC (280.57€) which includes DUC initially charged: 163.51€; and to be charged: 117.07€. The difference between these two figures (-71.05€/SU) is due to:
    - the positive inflation adjustment resulting from higher than planned inflation (+2.02€/SU);
    - the deduction of the traffic risk sharing adjustments (-5.40€/SU) and the traffic adjustment (-2.82€/SU) for the costs not subject to traffic risk sharing to be reimbursed in future years;
    - the deduction of the other revenues (-64.08€/SU);
    - and the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-0.77€/SU).
    The share of regulatory result in the terminal AUCU is 12.5%.

    Regulatory result (RR)

    Focus on regulatory result

    EANS net gain on activity in the Estonia terminal charging zone in the combined year 2020-2021
    EANS’s net gain amounts to +0.2 M€ due to gains of +0.1 M€ from the cost sharing mechanism and of +0.1 M€ from the traffic risk sharing mechanism.

    EANS overall regulatory results (RR) for the terminal charging zone activity
    Ex-post, the overall RR taking into account the net gain from the terminal activity mentioned above (+0.2 M€) and the actual RoE (+0.4 M€) amounts to +0.7 M€ (14.1% of the terminal revenues). The resulting ex-post rate of return on equity is 11.3%, which is higher than the 7.3% planned in the PP.

     
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