Cost-efficiency - Malta

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PRB monitoring

▪ The 2020 actual service units (396K) were 60% lower than the actual service units in 2019 (996K).

▪ Malta reduced total costs in 2020 by 2.4 M€2017 (-11%) compared to 2019 actual costs. The main driver of this reduction is the 1.9 M€2017 lower staff costs (-17%), resulting from the suspension of the overtime of all employees.

▪ MATS spent 2.6 M€2017 in 2020 related to costs of investments, 51% less than planned in the 2019 draft performance plan (5.3 M€2017). The NSA noted that MATS suspended all projects in 2020 as a result of COVID-19 crisis.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 40 NA NA NA
Determined costs 42 24 24 26
Difference costs −2 NA NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 4.7% 2.8% 2.1%
Determined inflation index NA 109.7 112.8 115.1
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 (-1.0%, or -0.44€). This results from the combination of lower than planned TSUs (-2.6%) and lower than planned en route costs in real terms (-3.6%, or -1.5 M€2017).

En route service units

The difference between actual and planned TSUs (-2.6%) falls outside of the ±2% dead band. Hence, the resulting loss is shared between the ANSP and airspace users, with the ANSP bearing a loss of -0.8 M€.

En route costs by entity

Actual real en route costs for 2020-2021 are -3.6% (-1.5 M€2017) lower than planned. This reflects the lower than planned costs for all the entities in the charging zone: main ANSP - MATS (-4.2%, or -1.5 M€2017) and the NSA/EUROCONTROL (-0.2%).

En route costs for the main ANSP at charging zone level

The lower than planed en route costs in real terms for MATS in 2020-2021 reflects a combination of:
- slightly higher staff costs (+0.1%);
- lower other operating costs (-4.3%);
- significantly lower depreciation costs (-16.3%); and,
- much lower cost of capital (-15.1%), reflecting lower than planned asset base.

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

AUCU components (€/SU) – 2020-2021
Components of the AUCU in 2020-2021 €/SU
DUC 45.45
Inflation adjustment 0.00
Cost exempt from cost-sharing −1.24
Traffic risk sharing adjustment 0.17
Traffic adj. (costs not TRS) 0.21
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues 0.00
Application of lower unit rate 0.00
Total adjustments −0.85
AUCU 44.59
AUCU vs. DUC −1.9%
Cost exempt from cost sharing by item - 2020-2021 €'000 €/SU
New and existing investments −1,023.0 −1.14
Competent authorities and qualified entities costs −10.0 −0.01
Eurocontrol costs −81.0 −0.09
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 −1,114.0 −1.24

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in combined year 2020-2021 (44.79€) is -1.5% lower than the nominal DUC (45.45€) which includes DUC initially charged: 27.81€; and to be charged: 17.64€. The difference between these two figures is due to:
- the addition resulting from the traffic risk sharing adjustment (+0.17€/SU) and the traffic adjustment (+0.21€/SU) for the costs not subject to traffic risk sharing to be charged in future years; and,
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-1.04€/SU).

The share of regulatory result in the AUCU is 1.5%.

Regulatory result (RR)

MATS net loss on en route activity in the Maltese charging zone in the combined year 2020-2021
MATS’s net loss amounts to -0.2 M€, as a combination of a gain of +0.6 M€ arising from the cost sharing mechanism and a loss of -0.8 M€ arising from the traffic risk sharing mechanism.
MATS overall regulatory results (RR) for the en route activity
Ex-post, the overall RR taking into account the net loss from the en route activity mentioned above (-0.2 M€) and the actual RoE (+0.8 M€) amounts to +0.6 M€ (1.8% of the en route revenues). The resulting ex-post rate of return on equity is 3.4%, which is lower than the 4.4% planned in the PP.