Cost-efficiency - Malta

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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 9 NA NA NA
Determined costs 10 6 6 7
Difference costs -2 NA NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 4.7% 2.8% 2.1%
Determined inflation index NA 109.7 112.8 115.1
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 for Malta TCZ was lower than the planned DUC (-8.4%, or -25.26€). This results from the combination of slightly higher than planned TNSUs (+0.8%) and lower than planned terminal costs in real terms (-7.7%, or -0.8 M€2017).

Terminal service units

The difference between actual and planned TNSUs (+0.8%) falls within the ±2% dead band. Hence, the resulting gain of 0.1 M€ is entirely retained by the main ANSP.

Terminal costs by entity

Actual real terminal costs for 2020-2021 in the Maltese TCZ are -7.7% (-0.8 M€2017) lower than planned. This reflects lower than planned costs for all the entities in the TCZ: the main ANSP - MATS (-9.1%, or -0.8 M€2017), other ANSP – MIA (-0.8%) and the costs for the NSA (-0.7%).

Terminal costs for the main ANSP at charging zone level

The lower than planned terminal costs in real terms for MATS in 2020-2021 reflects a combination of:
- lower staff costs (-1.9%);
- much lower other operating costs (-19.8%), which are understood to reflect cost-cutting measures implemented during the COVID-19 pandemic;
- lower depreciation costs (-10.9%) attributable to the fact that MATS had suspended all CAPEX projects during the pandemic; and,
- significantly lower cost of capital (-16.1%), which is understood to reflect lower than planned asset base.

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

AUCU components (€/SU) – 2020-2021
Components of the AUCU in 2020-2021 €/SU
DUC 310.41
Inflation adjustment 0.00
Cost exempt from cost-sharing -12.31
Traffic risk sharing adjustment 0.00
Traffic adj. (costs not TRS) -0.24
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 -12.55
AUCU 297.86
AUCU vs. DUC -4.0%
Cost exempt from cost sharing by item - 2020-2021 €'000 €/SU
New and existing investments -409.9 -12.13
Competent authorities and qualified entities costs -6.0 -0.18
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 -415.9 -12.31

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in combined year 2020-2021 (305.05€) in Malta TCZ is -1.7% lower than the nominal DUC (310.41€) which includes DUC initially charged: 154.52€; and to be charged: 155.89€. The difference between these two figures is due to:
- the deduction of the traffic adjustment (-0.24€/SU) for the costs not subject to traffic risk sharing to be reimbursed in future years;
- and the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-5.12€/SU).

The share of regulatory result in the AUCU is 8.4% in the TCZ.

Regulatory result (RR)

MATS net gain on terminal activity in the Maltese TCZ in the combined year 2020-2021
MATS’s net gain amounts to +0.7 M€, as a combination of a gain of +0.6 M€ arising from the cost sharing mechanism and a gain of +0.1 M€ arising from the traffic risk sharing mechanism.
MATS 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 (+0.7 M€) and the actual RoE (+0.2 M€) amounts to +0.9 M€ (10.0% of the terminal revenues in TCZ). The resulting ex-post rate of return on equity is 23.1%, which is much higher than the 4.4% planned in the PP.