Cost-efficiency - Ireland

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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 40 NA NA NA
Determined costs 41 28 31 32
Difference costs -1 NA NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 1.9% 2.0% 2.0%
Determined inflation index NA 105.2 107.3 109.4
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

The AUC for the combined year 2020-2021 (267.36€2017) was lower by -6.0%, or -17.08€2017 from DUC (284.45€2017). This results from the combination of higher than planned TNSUs (+3.4%) and lower than planned en route costs in real terms (-2.8%, or -1.1 M€2017).

Terminal service units

The actual TNSUs surpassed the planned level (+3.4%) and falls between the ±2% dead band and +10% threshold. Hence the resulting gain will be split between the airspace users and the ANSPs (see item 11).

Terminal costs by entity

NA

Terminal costs for the main ANSP at charging zone level

Overall, the terminal costs in real terms for IAA in 2020-2021 were lower by -3.7% (-1.3 M€2017) comparing to the determined costs from the performance plan. This is mainly the result of:
- higher staff costs (+5.0% or +0.8 M€2017) resulting from the decision to unwind some of the staff cost containment measures due to the traffic increase at the end of 2021;
- lower other operating costs (-8.6% or -0.9 M€2017) due to “the cost containment programme yielding better results than originally anticipated on non-staff Opex, relative to the NSAs target for 2021, which set based on benchmarked cost savings of other ANSPs”;
- lower depreciation costs by -12.4% (-0.7 M€2017) and lower costs of capital by -23% (-0.5 M€2017) due to the change in the timing of the capitalisation of the IAA’s new visual control tower at Dublin airport (the actual operational date was November 2021 vs. planned July 2021);
- higher exceptional costs (+1.4%).

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

AUCU components (€/SU) – 2020-2021
Components of the AUCU in 2020-2021 €/SU
DUC 289.52
Inflation adjustment 0.81
Cost exempt from cost-sharing -8.29
Traffic risk sharing adjustment -2.35
Traffic adj. (costs not TRS) -1.19
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -33.22
Application of lower unit rate 0.00
Total adjustments -44.24
AUCU 245.28
AUCU vs. DUC -15.3%
Cost exempt from cost sharing by item - 2020-2021 €'000 €/SU
New and existing investments -1,243.8 -8.57
Competent authorities and qualified entities costs 40.6 0.28
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 -1,203.2 -8.29

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in the combined year 2020-2021 (242.96€) is -16.1% lower than the nominal DUC (289.52€), includes DUC initially charged: 181.88€; and to be charged: 107.64€. The difference between these two figures (-46.56€/SU) resulted from:
- the positive inflation adjustment resulting from higher than planned inflation (+0.81€/SU);
- the deduction of -10.61€/SU of costs exempt from cost-sharing;
- the deduction of traffic risk sharing mechanism of -2.35€/SU to be reimbursed to the airspace users in future years;
- the deduction of traffic adjustment (-1.19€/SU), for the costs not subject to traffic risk sharing to be reimbursed to the airspace users in future years;
- the deduction of -33.22€/SU of other revenue, which include also the return of unspent CAPEX allowances relating to RP2.
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 5.4%.

Regulatory result (RR)

IAA net gain on activity in the terminal charging zone in the combined year 2020-2021
IAA’s net gain amounts to +0.6 M€ mainly due to the gains of +0.9 M€ from the traffic risk sharing mechanism. The cost sharing mechanism ammounted to -0.3M€.
IAA overall regulatory results (RR) for the terminal activity
Ex-post, the overall RR taking into account the net gain from the terminal activity mentioned above (+0.6 M€) and the actual RoE (+1.7 M€) amount to +2.3 M€ (6.6% of the terminal revenues). The resulting ex-post rate of return on equity is 6.8% which is higher than the 4.6% planned in the PP.