Cost-efficiency - Spain

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PRB monitoring

▪ The 2020 actual service units of Spain continental (4,437K) were 61% lower than the actual service units in 2019 (11,502K). At the same time, the 2020 actual service units of Spain Canarias (803K) were 59% lower than the actual service units in 2019 (1,954K).

▪ Spain continental reduced costs in 2020 compared to 2019 actual costs by 16 M€2017 (-3%). The reduction is mainly driven by a decrease in staff costs of 16 M€2017 (-4%). However, the adaptation to International Accounting Standards (IAS) increased exceptional costs by 12 M€2017 (+201%).

▪ Spain Canarias reduced costs in 2020 compared to 2019 actual costs by 5.5 M€2017 (-6%). The reduction is mainly driven by a decrease in staff costs of 6.2 M€2017 (-9%), due to exceptional measures. However, other operating costs increased mainly due to higher Eurocontrol costs (+4.6 M€2017 or +38%).

▪ ENAIRE spent 109 M€2017 in 2020 related to cost of investments, 8% less than planned in the 2019 draft performance plan (118 M€2017).

En route charging zone - Spain Continental

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 1,180 NA NA NA
Determined costs 1,191 622 630 634
Difference costs -11 NA NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 1.3% 1.5% 1.6%
Determined inflation index NA 104.9 106.5 108.2
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 (by -1.7%, or -1.87€2017). This results from the combination of slightly higher than planned TSUs (+0.1%) and lower than planned en route costs in real terms (by -1.6%, or -18.8 M€2017).

En route service units

The difference between actual and planned TSUs (+0.1) falls within the ±2% dead band. Hence the resulting additional revenue is kept by the ANSPs.

En route costs by entity

Actual real en route costs for 2020-2021 are -1.6% (-18.8 M€2017) lower than planned. This result is driven by the main ANSP, ENAIRE (-1.8%, or -17.9 M€2017), the MET service provider (-0.4% or -0.2 M€2017) and the NSA/EUROCONTROL costs (-3.8%, or -2.9 M€2017), whereas other ANSPs cost are higher than planed (+4.9% or +2.2 M€2017).

En route costs for the main ANSP at charging zone level

Lower then planned en route costs in real terms for ENAIRE in 2020-2021 (-1.8%, or -17.9 M€2017 lower) results from:
- lower staff costs (-1.5%), although the additional information to the en route reporting tables clarify that “two provisional rulings unfavourable to ENAIRE, as a consequence of claims of control staff, have impacted in 2021 Annual Accounts for ENAIRE, with a total amount of 32.2M€ higher salaries. This mentioned total amount, although included as higher staff expenses in the 2021 ENAIRE Accounts, has not been considered in the costs submitted by ENAIRE pending national Supreme Court final rulings”;
- lower other operating costs (-6.6%), as result of restrictive expenditure policy;
- slightly higher depreciation (+0.3%);
- lower cost of capital (-3.2%), due to lower asset base (-1.6%) and WACC.

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

AUCU components (€/SU) – 2020-2021
Components of the AUCU in 2020-2021 €/SU
DUC 110.16
Inflation adjustment 0.81
Cost exempt from cost-sharing -0.25
Traffic risk sharing adjustment 0.00
Traffic adj. (costs not TRS) -0.02
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 3.15
Other revenues -1.13
Application of lower unit rate 0.00
Total adjustments 2.56
AUCU 112.72
AUCU vs. DUC + 2.3%
Cost exempt from cost sharing by item - 2020-2021 €'000 €/SU
New and existing investments 218.2 0.02
Competent authorities and qualified entities costs -391.9 -0.04
Eurocontrol costs -2,492.9 -0.23
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 -2,666.7 -0.25

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in combined year 2020-2021 for Spain Continental en route charging zone (112.68€) is +2.3% higher than the nominal DUC (110.16€) which includes DUC initially charged: 54.45€; and to be charged: 55.71€. The difference between these two figures (+2.51€/SU) is due to:
- cross-financing Spain Canarias (+3.15/SU);
- the positive inflation adjustment resulting from higher than planned inflation (+0.81€/SU);
- the deduction of the traffic adjustment (-0.02€/SU) for the costs not subject to traffic risk sharing to be reimbursed in future years;
- the deduction of the other revenues (-1.13€/SU);
- and the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-0.29€/SU).
The share of regulatory result in the AUCU is 5.2%.

Regulatory result (RR)

ENAIRE net gain on en route activity in the Spain Continental charging zone in the combined year 2020-2021
ENAIRE’s net gain amounts to +19.6 M€, as a combination of a gain of +18.4 M€ arising from the cost sharing mechanism and a gain of +1.2 M€ arising from the traffic risk sharing mechanism.
ENAIRE 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 (+19.6 M€) and the actual RoE (+42.6 M€) amounts to +62.2 M€ (6.1% of the en route revenues). The resulting ex-post rate of return on equity is 9.8%, which is higher than the 6.7% planned in the PP.