Cost-efficiency - France

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PRB monitoring

▪ The 2020 actual service units (8,547K) were 61% lower than the actual service units in 2019 (21,837K).

▪ France reduced total costs in 2020 by only 7 M€2017 (-1%) compared to 2019 actual costs.

▪ DSNA spent 302 M€2017 in 2020 related to costs of investments, 6% less than planned in the 2019 draft performance plan (323 M€2017). The reduction can be attributable to a lower depreciation and cost of capital than planned.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 2,650 NA NA NA
Determined costs 2,668 1,357 1,382 1,407
Difference costs -18 NA NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 1.2% 1.3% 1.4%
Determined inflation index NA 106.3 107.7 109.3
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 AUC was lower than the planned DUC (by -2.1%, or -2.84€2017). This results from the combination of higher than planned TSUs (+1.1%) and lower than planned en route costs in real terms (by -1.1%, or -28.1 M€2017).

En route service units

The difference between actual and planned TSUs (+1.1%) falls within the ±2% dead band. Hence the resulting additional revenue is kept by the ANSPs.

En route costs by entity

Actual real en route costs for 2020-2021 are -1.1% (-28.1 M€2017) lower than planned. This result is driven by the main ANSP, DSNA (-1.0%, or -21.9 M€2017), the MET service provider (-0.2% or -0.3 M€2017) and the NSA/EUROCONTROL costs (-3.5%, or -5.8 M€2017).

En route costs for the main ANSP at charging zone level

The lower then planned en route costs in real terms for DSNA in 2020-2021 (-1.0%, or -21.9 M€2017 lower) result from:
- slightly lower staff costs (-1.3%);
- slightly higher other operating costs (+1.3%);
- lower depreciation (-5.9%), “mainly in relation with the postponement of commissioning from 2021 to 2022 and the transfer of part of the investment costs to project-related OPEX costs”;
- higher cost of capital (+5.3%), due to increases in both the asset base (+1.3%) and WACC (+0.08 p.p.);
- lower deduction for VFR exempted flights (-3.8%).

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

AUCU components (€/SU) – 2020-2021
Components of the AUCU in 2020-2021 €/SU
DUC 136.72
Inflation adjustment 0.54
Cost exempt from cost-sharing -1.11
Traffic risk sharing adjustment 0.00
Traffic adj. (costs not TRS) -0.17
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -0.42
Application of lower unit rate 0.00
Total adjustments -1.16
AUCU 135.56
AUCU vs. DUC -0.8%
Cost exempt from cost sharing by item - 2020-2021 €'000 €/SU
New and existing investments -16,077.7 -0.81
Competent authorities and qualified entities costs -231.9 -0.01
Eurocontrol costs -5,606.9 -0.28
Pension costs 0.0 0.00
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -21,916.4 -1.11

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in combined year 2020-2021 for France en route charging zone (135.73€) is -0.7% lower than the nominal DUC (136.72) which includes DUC initially charged: 61.27€; and to be charged: 75.45€. The difference between these two figures (-0.98€/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+0.54€/SU);
- the deduction of the traffic adjustment (-0.17€/SU) for the costs not subject to traffic risk sharing to be reimbursed in future years;
- the deduction of the other revenues (-0.42€/SU);
- and the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-0.93€/SU).
The share of regulatory result in the AUCU is 3.6%

Regulatory result (RR)

DSNA net gain on en route activity in the France charging zone in the combined year 2020-2021
DSNA’s net gain amounts to +35.7 M€, as a combination of a gain of +10.1 M€ arising from the cost sharing mechanism and a gain of +25.6 M€ arising from the traffic risk sharing mechanism.
DSNA 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 (+35.7 M€) and the actual RoE (+59.9 M€) amounts to +95.6 M€ (4.0% of the en route revenues). The resulting ex-post rate of return on equity is 27.7%, which is higher than the 17.1% planned in the PP.