Cost-efficiency - Luxembourg

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PRB monitoring

▪ The 2020 actual service units (1,081K) were 57% lower than the actual service units in 2019 (2,538K).

▪ Belgium-Luxembourg increased all cost categories in 2020, with 2020 actual costs being 19 M€2017 (+10%) higher compared to 2019 actuals. Belgium and Luxembourg are one of the few Member States that increased costs and did not achieve the cost-efficiency targets in 2019.

▪ The increase in costs is attributable to four main reasons: (i) a change in allocation method of the approach costs, (ii) increased cost of capital due to higher net current assets (+48 M€2017, +323%), (iii) increased MUAC costs, and (iv) increased Eurocontrol costs.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 432 NA NA NA
Determined costs 442 250 262 252
Difference costs -10 NA NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 7.8% 4.7% 2.1%
Determined inflation index NA 115.6 123.9 126.5
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 was -3.0% (or -5.76€2017) lower than the planned DUC. This results from the combination of slightly higher than planned TSUs (+0.3%) and lower than planned en-route costs in real terms (-2.8%, or -11.9 M€2017).

En route service units

The difference between actual and planned TSUs (+0.3%) falls within the ±2% dead band. Hence the resulting additional en-route revenue is kept by the ANSPs.

En route costs by entity

Actual real en route costs are -2.8% (-11.9 M€2017) lower than planned. This is driven by the main ANSP, Skeyes (-3.8%, or -9.4 M€2017), the other ANSPs (MUAC and ANA Luxembourg, -1.0%, or -1.4 M€2017 together) and the NSA/EUROCONTROL costs (-2.7%, or -1.0 M€2017).

En route costs for the main ANSP at charging zone level

The lower than planned en route costs in real terms for Skeyes (-3.8%, or -9.4 M€2017) result from:
- lower staff costs (-1.8%);
- lower other operating costs (-13.5%);
- slightly lower depreciation (-1.4%); and
- lower cost of capital (-2.7%).
The additional information to the reporting tables does not provide qualitative information explaining the reasons underlying the differences between the determined and actual costs.

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

AUCU components (€/SU) – 2020-2021
Components of the AUCU in 2020-2021 €/SU
DUC 197.24
Inflation adjustment 1.26
Cost exempt from cost-sharing -0.98
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 -1.99
Application of lower unit rate 0.00
Total adjustments -1.77
AUCU 195.47
AUCU vs. DUC -0.9%
Cost exempt from cost sharing by item - 2020-2021 €'000 €/SU
New and existing investments -487.9 -0.22
Competent authorities and qualified entities costs -118.0 -0.05
Eurocontrol costs -1,590.0 -0.71
Pension costs -6.1 0.00
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -2,202.0 -0.98

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in combined year 2020-2021 (195.76€) is -0.7% lower than the nominal DUC (197.24€) which includes DUC initially charged: 92.74€; and to be charged: 104.49€. The difference between these two figures (-1.47€/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+1.26€/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-0.68€/SU);
- the deduction of the traffic adjustment (-0.06€/SU) for the costs not subject to traffic risk sharing to be reimbursed in future years; and
- the deduction of the other revenues (-1.99€/SU).
The share of regulatory result in the AUCU (befored the deduction of other revenues) is 3.3%.

Regulatory result (RR)

Skeyes net gain on activity in the Belgium-Luxembourg en route charging zone in the combined year 2020-2021
Skeyes reported a net gain of +10.4 M€, resulting from a gain of +9.8 M€ arising from the cost sharing mechanism and a gain of +0.6 M€ arising from the traffic risk sharing mechanism.
Skeyes overall regulatory results (RR) for the en route activity
Ex-post, the overall RR corresponding to the net gain from the en route activity mentioned above (+10.4 M€) and the RoE (+2.6 M€) amounts to +13.0 M€ (5.0% of the en route revenues), compared to 1.0% ex-ante. The resulting ex-post rate of return on equity is 11.2%, which is higher than the 2.2% planned in the PP.