Cost-efficiency - Norway

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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 89 NA NA NA
Determined costs 88 44 46 48
Difference costs 1 NA NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 2.0% 2.0% 2.0%
Determined inflation index NA 111.2 113.4 115.6
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 terminal AUC was +1.2% (or +32.83 NOK2017, +3.52 €2017) higher than the planned DUC. This results from the combination of slightly lower than planned TNSUs (-0.9%) and slightly higher than planned terminal costs in real terms (+0.3%, or +2.0 MNOK2017, +0.2 M€2017).

Terminal service units

The difference between actual and planned TNSUs (-0.9%) falls within the ±2% dead band. Hence the resulting loss in terminal revenue is borne by the ANSPs.

Terminal costs by entity

Actual real terminal costs are +0.3% (or +0.2 M€2017) higher than planned. This is driven by the MET service provider (+18.9%, or +0.3 M€2017), while the actual costs of the main ANSP (Avinor) and the NSA are close to the determined costs (-0.1% and -2.8%, respectively).

Terminal costs for the main ANSP at charging zone level

The slightly lower than planned terminal costs in real terms for Avinor (-0.1%, or -0.1 M€2017) result from the combination of:
- slightly higher staff costs (+0.9%);
- lower other operating costs (-3.8%), mainly due to cost-savings in travel expenses and external support;
- slightly higher depreciation and cost of capital (+2.8% and +0.8%, respectively), due to the higher cost of investment relating to the new radar at Oslo airport and IT equipment; and,
- slightly lower than planned deduction for VFR exempted flights (-0.6%).

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

AUCU components (€/SU) – 2020-2021
Components of the AUCU in 2020-2021 €/SU
DUC 287.59
Inflation adjustment 2.07
Cost exempt from cost-sharing −0.02
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 0.00
Application of lower unit rate −134.42
Total adjustments −132.32
AUCU 155.27
AUCU vs. DUC −46.0%
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 −4.7 −0.02
Eurocontrol costs 0.0 0.00
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 −4.7 −0.02

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in the combined year 2020-2021 (1 665.72NOK or 159.82€) is significantly lower (-44.5%) than the nominal DUC (3,000.12NOK or 287.59€), which includes DUC initially charged: 1,634.51NOK or 156.75€; and to be charged:
1,365.62NOK or 130.84€. The difference between these two figures (-1,334.40NOK/SU or -127.77€/SU) is due to:
- the application of a lower unit rate (-1,365.62NOK/SU or -130.84€/SU), which offsets fully the DUC to be charged retroactively and reflects the decision of Norway to not recover from airspace users the losses in terminal revenues linked with the Covid-19 pandemic;
- the positive inflation adjustment resulting from higher than planned inflation (+20.98NOK/SU or +2.07€/SU);
- the impact of adjustments resulting from the costs exempt from cost-sharing mechanism (+9.65NOK/SU or +0.95€/SU); and,
- the addition for the traffic adjustment (+0.58NOK/SU or +0.06€/SU) for the costs not subject to traffic risk sharing to be charged to airspace users in future years.
The share of regulatory result in the AUCU (before the deduction of other revenues) is 8.1%.

Regulatory result (RR)

Avinor net loss on activity in Norway terminal charging zone in the combined year 2020-2021
Avinor incurred a net loss of -3.4 MNOK (-0.3 M€), resulting from a combination of a gain of +3.8 MNOK arising from the cost sharing mechanism and a loss of
-7.2 MNOK arising from the traffic risk sharing mechanism.
Avinor overall regulatory results (RR) for the terminal activity
Ex-post, the overall RR corresponding to the net loss from the terminal activity mentioned above (-3.4 MNOK) and the RoE (+43.1 MNOK) amounts to a gain of +39.8 MNOK (4.9% of the terminal revenues). The resulting ex-post rate of return on equity is 9.4%. Please see also Note 2 above.