Cost-efficiency - Switzerland

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PRB monitoring

▪ Switzerland incurred the second largest decrease in service units, with 2020 actual service units (650K) being 62% lower than the actual service units in 2019 (1,708K).

▪ Switzerland incurred the second highest percentage increase in total costs across all Member States in 2020, with a 19 M€2017 (+13%) increase compared to 2019 actual costs. The increase is driven by 17 M€2017 higher staff costs (+17%) and 3.3 M€2017 higher other operating costs (+13%).

▪ Skyguide spent 47 M€2017 related to cost of investments in 2020, 8% less than planned in the 2019 draft performance plan (51 M€2017). The reduction can be explained by a decrease of cost of capital, by reason of an asset base decrease.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 324 NA NA NA
Determined costs 315 166 160 160
Difference costs 9 NA NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 0.3% 0.8% 0.9%
Determined inflation index NA 101.7 102.5 103.4
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 +1.5% (or +3.41 CHF2017, +3.07€2017) higher than the planned DUC. This results from the combination of slightly higher than planned TSUs (+1.2%) and higher than planned en-route costs in real terms in a greater proportion (+2.7%, or +9.4 MCHF2017, +8.5 M€2017).

En route service units

The difference between actual and planned TSUs (+1.2%) 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 +2.7% (+8.5 M€2017) higher than planned. This is driven by the main ANSP, Skyguide (+3.2%, or +8.7 M€2017), while the actual costs of the MET service provider and the NSA/EUROCONTROL are close to the determined costs (-0.3% and -0.7%, respectively).

En route costs for the main ANSP at charging zone level

Actual en route costs in real terms are higher than planned by +3.2% overall (or +8.7 M€2017). However, the differences by nature of costs are distorted by two factors:
a) The overall reported costs in each cost item are netted by the financing of the services provided by Skyguide outside the Swiss FIR;
b) Skyguide’s costs include significant amounts linked to the additional costs caused by the change in the capitalisation rule in 2021 (+10.2 M€2017) and to the reduced financing of delegated airspace in 2020 (+20.7 M€2017). However, in order for these amounts not to be billed to airspace users, they have also been reported as negative exceptional items in the determined costs, but not in the actual costs (-100% of negative exceptional costs, or +30.9 M€2017).
- the remaining difference in staff costs (which is overall of -23.1 M€2017 or -10.1%), is mainly due to the postponement of the “provision for ATCO retirement age”, which was contained in the 2021 determined 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 212.52
Inflation adjustment 0.38
Cost exempt from cost-sharing −0.23
Traffic risk sharing adjustment 0.00
Traffic adj. (costs not TRS) −0.29
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 −0.14
AUCU 212.38
AUCU vs. DUC −0.1%
Cost exempt from cost sharing by item - 2020-2021 €'000 €/SU
New and existing investments −198.9 −0.13
Competent authorities and qualified entities costs 0.0 0.00
Eurocontrol costs −162.0 −0.10
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 −360.9 −0.23

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in combined year 2020-2021 (228.48CHF or 212.38€) is -0.1% lower than the nominal DUC (228.63CHF or 212.52€) which includes DUC initially charged: 108.99CHF or 101.27€; and to be charged: 119.64CHF or 111.24€. The difference between these two figures (-0.15CHF/SU or -0.14€/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+0.41CHF/SU or +0.38€/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-0.25CHF/SU or -0.23€/SU); and
- the deduction of the traffic adjustment (-0.31CHF/SU or -0.29€/SU) for the costs not subject to traffic risk sharing to be reimbursed in future years.

The share of regulatory result in the AUCU (befored the deduction of other revenues) is negative (-0.7%).

Regulatory result (RR)

Skyguide net loss on activity in Switzerland en route charging zone in the combined year 2020-2021
Skyguide incurred a net loss of -6.2 MCHF (-6.0 M€), resulting from a loss of -9.9 M CHF arising from the cost sharing mechanism, partially compensated by a gain of +3.7 M CHF arising from the traffic risk sharing mechanism.
Skyguide overall regulatory results (RR) for the en route activity
Ex-post, the overall RR corresponding to the net loss from the en route activity mentioned above (-6.2 MCHF or -6.0 M€) and the RoE (+3.6 MCHF or +3.3 M€) amounts to a loss of -2.7 MCHF or -2.5 M€ (0.9% of the en route revenues). The resulting ex-post rate of return on equity is -2.4%, compared to 3.5% planned in the PP.