Cost-efficiency - Romania

Download Report

PRB monitoring

▪ The 2020 actual service units (2,246K) were 56% lower than the actual service units in 2019 (5,112K).

▪ Romania reduced total costs in 2020 by 7.5 M€2017 (-4%) compared to 2019 actual costs. The decrease is mainly driven by 5 M€2017 (-4%) reduction in staff costs, due to recruitment freezing, reduction of additional benefits and the retirement of personnel without being replaced. Romania also decreased exceptional costs by 7.6 M€2017 (-100%), without providing an explanation.

▪ ROMATSA spent 21.6 M€2017 related to cost of investments in 2020, in line with 2019 draft performance plan (21.5 M€2017).

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 373 NA NA NA
Determined costs 370 219 249 265
Difference costs 2 NA NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 9.3% 4.0% 3.0%
Determined inflation index NA 125.9 130.9 134.8
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 is slightly higher than the planned DUC (by +0.6%, or +1.86 RON2017, or +0.41€2017). This results from the combination of lower than planned TSUs (-0.5%) and higher than planned en route costs in real terms (by +0.1%, or +1.1 MRON2017, or +0.2 M€2017).

En route service units

The difference between actual and planned TSUs (-0.5%) falls within the ±2% dead band. Hence the resulting loss is borne by the ANSPs.

En route costs by entity

Actual real en route costs for 2020-2021 are +0.1% (+1.1 MRON2017, or +0.2 M€2017) higher than planned. This result is driven by the main ANSP, Romatsa (+0.5%, or +1.5 M€2017), while the NSA/EUROCONTROL costs were lower than planned (-5.7%, or -1.3 M€2017).

En route costs for the main ANSP at charging zone level

Overall, the en route costs in real terms for Romatsa in 2020-2021 were in line with the determined costs from the performance plan (+0.5%, or +1.5 M€2017 higher). This results from opposite variations:
- higher staff costs (+2.3%), “due to higher than planned pensions costs related to the defined benefits provision. These have been partly offset by cost restraining measures applied for both 2020-2021”.
- lower other operating costs (-13.8%), “due mainly to a delay in flight validation services for the 15 DMEs installed and cost restraining measures applied to conserve cash-flow.”
- slightly higher depreciation (+1.1%), “due to an accounting error in forecasting”, and
- higher cost of capital (+2.7%).

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

AUCU components (€/SU) – 2020-2021
Components of the AUCU in 2020-2021 €/SU
DUC 67.43
Inflation adjustment 0.38
Cost exempt from cost-sharing -0.23
Traffic risk sharing adjustment 0.00
Traffic adj. (costs not TRS) 0.04
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -0.28
Application of lower unit rate 0.00
Total adjustments -0.09
AUCU 67.34
AUCU vs. DUC -0.1%
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 -666.2 -0.13
Eurocontrol costs -518.9 -0.10
Pension costs 0.0 0.00
Interest on loans -10.6 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -1,195.7 -0.23

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in combined year 2020-2021 (328.42RON or 67.34€) is very close to the nominal DUC (328.87RON or 67.43€) which includes DUC initially charged: 186.75RON or 38.25€; and to be charged: 142.12RON or 29.18€. The difference between these two figures (-0.45RON/SU or -0.09€/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+1.87RON/SU or +0.38€/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-1.15RON/SU or -0.23€/SU);
- the traffic adjustment (+0.20RON/SU or +0.04€/SU) for the costs not subject to traffic risk sharing to be charged in future years ; and
- the deduction of the other revenues (-1.36RON/SU or -0.28€/SU).
The share of regulatory result in the AUCU (before the deduction of other revenues) is 4.1%.

Regulatory result (RR)

Romatsa net loss on en route activity in the Romania charging zone in the combined year 2020-2021
Romatsa incurred a net loss of -15.8 MRON, as a combination of a loss of -7.5 MRON arising from the cost sharing mechanism and a loss of -8.3 MRON arising from the traffic risk sharing mechanism.
Romatsa 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 (-15.8 MRON) and the actual RoE (84.3 MRON) amounts to +68.5 MRON (4.3% of the en route revenues). The resulting ex-post rate of return on equity is 8.3%, which is lower than the 10.1% planned in the PP.