Cost-efficiency - Lithuania
PRB monitoring
▪ Lithuania faced the smallest decrease in traffic across Member States. The 2020 actual service units (333K) were 46% lower than the actual service units in 2019 (621K).
▪ In 2020 Lithuania reduced total costs by 3.2 M€2017 (-14%) compared to 2019 actual costs. Staff costs were the main driver of the decrease with a reduction of 2.5 M€2017 (-17%), due to the suspension of hiring for non-critical positions and cutting of variable salary.
▪ SE Oro Navigacija spent 3.8 M€2017 in 2020 related to costs of investments, 43% less than planned in the 2019 draft performance plan (6.7 M€2017).
▪ SE Oro Navigacija postponed and stopped some of its investments due to COVID-19 crisis. Moreover, the NSA reported that the new AFTN system and voice communication system were bought at competitive prices decreasing its actual costs.
En route charging zone
Unit cost (KPI#1)
| Actual and determined data |
| Total costs - nominal (M€) |
2020-2021 |
2022 |
2023 |
2024 |
| Actual costs |
41 |
NA |
NA |
NA |
| Determined costs |
40 |
22 |
25 |
26 |
| Difference costs |
1 |
NA |
NA |
NA |
| Inflation assumptions |
2020-2021 |
2022 |
2023 |
2024 |
| Determined inflation rate |
NA |
17.9% |
8.5% |
3.0% |
| Determined inflation index |
NA |
130.6 |
141.7 |
146 |
| 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
The AUC for the combined year 2020-2021 (49.75 €2017) turned out close to the planned DUC (lower by -1.5%, or -0.76 €2017). This results from the higher actual vs. forecast TSUs (+2.4%) and higher actual vs. determined costs (+0.8% or +0.3 M€2017).
En route service units
The difference between actual and planned TSUs (+2.4%) falls between the +2% dead band-band and the +10% threshold, which resulting in the additional gains shared between the ANSP and the airspace users.
En route costs by entity
Actual real en route costs for 2020-2021 are +0.8% (+0.3 M€2017) higher than planned. This result is driven by the main ANSP - Oro navigacija (+0.6%, or +0.2 M€2017), METSP (+8.0% or +0.1 M€2017) and the NSA/EUROCONTROL costs (+1.4%, or + 0.05 M€2017). The costs for other ANSP (LGS for provision of services at NINTA-ADAXA) are -5.7% lower than planned.
En route costs for the main ANSP at charging zone level
Overall, the en route costs in real terms for Oro navigacija in 2020-2021 were slightly higher than determined (+0.6% or +0.2 M€). This results from:
- higher staff costs (+0.9%) resulting from the newly recruited staff in second half of 2021;
- higher other operating costs (+2.2%) and higher depreciation costs (+1.3%) resulting from the unexpected increase of overflights and in consequence bigger share of costs attributed to en route activities;
- higher cost of capital (+6.9%) due to the difference in allocation of costs resulting from additional overflights and increase in the average assets base;
- the negative exceptional costs representing the result of the asset base recalculation, which were not foreseen in the PP.
Actual unit cost incurred by the users (AUCU) (PI#1)
| AUCU components (€/SU) – 2020-2021 |
| Components of the AUCU in 2020-2021 |
€/SU |
| DUC |
53.32 |
| Inflation adjustment |
0.26 |
| Cost exempt from cost-sharing |
0.14 |
| Traffic risk sharing adjustment |
−0.11 |
| Traffic adj. (costs not TRS) |
−0.14 |
| Finantial incentives |
0.00 |
| Modulation of charges |
0.00 |
| Cross-financing |
0.00 |
| Other revenues |
−0.97 |
| Application of lower unit rate |
0.00 |
| Total adjustments |
−0.82 |
| AUCU |
52.50 |
| AUCU vs. DUC |
−1.5% |
| Cost exempt from cost sharing by item - 2020-2021 |
€'000 |
€/SU |
| New and existing investments |
115.6 |
0.15 |
| Competent authorities and qualified entities costs |
−1.3 |
0.00 |
| Eurocontrol costs |
49.3 |
0.06 |
| Pension costs |
−55.8 |
−0.07 |
| Interest on loans |
0.0 |
0.00 |
| Changes in law |
0.0 |
0.00 |
| Total cost exempt from cost risk sharing |
107.8 |
0.14 |
The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in the combined year 2020-2021 (52.59€) is -1.4% lower than the nominal DUC (53.32€) which includes DUC initially charged: 41.85€; and to be charged: 11.47€. The difference between these two figures (-0.74€/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+0.26€/SU);
- the impact of adjustments resulting from the costs exempt from cost-sharing mechanism (+0.23€/SU);
- the deduction of the traffic risk sharing adjustments (-0.11€/SU);
- the deduction of the traffic adjustment (-0.14€/SU) for the costs not subject to traffic risk sharing to be reimbursed to the airspace users in future years; and
- the deduction of the other revenues (-0.97€/SU) to be reimbursed to the airspace users in future years, representing the government grants received by NSA to cover part of EUROCONTROL’s contribution.
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 4.1%.
Oro navigacija net gain on en route activity in the Lithuanian charging zone in the combined year 2020-2021
Oro navigacija’s net gain amounts to +0.7 M€, as a combination of a loss of -0.1 M€ arising from the cost sharing mechanism and a gain of +0.7 M€ arising from the traffic risk sharing mechanism.
Oro navigacija 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 (+0.7 M€) and the actual RoE (+1.1 M€) amounts to +1.7 M€ (4.8% of the en route revenues). The resulting ex-post rate of return on equity is 2.3% which is lower than the 3.0% planned in the PP.