Cost-efficiency - Poland

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PRB monitoring

▪ The en route 2020/2021 actual unit cost of Poland was 65.342017, -13% lower than the determined unit cost (75.24 €2017). The terminal zone 1 actual unit cost was 152.00 €2017, -16% lower than the determined unit cost (181.05 €2017) and the terminal zone 2 actual unit cost was 344.23 €2017, -16% lower than the determined unit cost (410.47 €2017).

▪ The en route 2021 actual service units (2,586K) were slightly higher (+1.4%) than the determined (2,549K).

▪ In 2021, actual total costs of Poland were -44 M€2017 (-24%) lower than determined. The significant decrease was mainly driven by -39 M€2017 lower staff costs (-35%), mostly due to changes to the renumeration scheme. In a first version of the monitoring report, Poland reported actual costs -37% lower than determined. The explanation for this change is unclear. The PRB recommends the Commission to request a transparent and clear explanation of this cost item given its direct impact on future performance and its alerting structure.

▪ PANSA spent 38 M€2017 in 2021 related to costs of investments, +4.2% higher than determined (37 M€2017), Poland indicates that growing inflation and the increase in interest rates account for the difference.

▪ The discrepancies regarding total costs are significant, especially as the performance plan has been submitted at the end of 2021. The PRB invites the NSA to analyse the discrepancies and identify their reasons, including potential inaccurate planning, treatment of the unspent staff costs, and possible misusing of the regulatory framework to finance the liquidity.

▪ The en route actual unit cost incurred by users in 2020/2021 was 74.06€, while the terminal zone 1 actual unit cost incurred by users was 183.17€ and 410.25€ for terminal zone 2.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 330 NA NA NA
Determined costs 377 206 215 223
Difference costs -47 NA NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 2.5% 2.5% 2.5%
Determined inflation index NA 113.4 116.2 119.1
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 en route AUC was lower by -13.2% (or -42.15 PLN2017 or -9.91 €2017) comparing to the DUC. This was in particular, the effect of the lower than planned en route costs in real terms (-12.5%, -187.7 MPLN2017 or -44.1 M€2017).

En route service units

The difference between actual and planned TSU (+0.8%) is within the ±2% dead-band which results in additional revenues kept by the ANSPs.

En route costs by entity

Actual en route costs are -12.5% lower than planned (-44.1 M€2017) which is mainly driven by the lower costs for PANSA (-14.0% or -43.4 M€2017). Slightly lower actual costs are observed for NSA/EUROCONTROL, -2.1% (or -0.6 M€2017) and the METSPs, -1.0% (or -0.1 M€2017).

En route costs for the main ANSP at charging zone level

The lower than planned en route costs in real terms for PANSA (-14.0%, or -43.4 M€2017) result from:
- lower en route staff costs (by -18.3% or -39.0 M€2017), “resulting from a number of factors, including evolution of provisions also those for one-off elements of staff benefits reflected in the RP3 determined cost”, lower remuneration costs (due to lower employment level) and lower actual level of bonuses and rewards;
- lower en-route other operating costs (by -14.3% or -5.3 M€2017) resulting from costs cutting measures in 2021;
- higher, by +2.4% (or +1.1 M€2017) depreciation due to the difference in the useful life of some assets;
- lower, by -1.9% (or -0.3 M€2017) actual cost of capital due to slightly lower value of asset base;
- lower deduction for the costs of exempted VFR flights (-9.7%).

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

AUCU components (€/SU) – 2020-2021
Components of the AUCU in 2020-2021 €/SU
DUC 75.85
Inflation adjustment 0.57
Cost exempt from cost-sharing 0.17
Traffic risk sharing adjustment 0.00
Traffic adj. (costs not TRS) -0.07
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -2.46
Application of lower unit rate 0.00
Total adjustments -1.78
AUCU 74.06
AUCU vs. DUC -2.3%
Cost exempt from cost sharing by item - 2020-2021 €'000 €/SU
New and existing investments 1,217.6 0.26
Competent authorities and qualified entities costs 33.5 0.01
Eurocontrol costs -602.8 -0.13
Pension costs 0.0 0.00
Interest on loans 177.8 0.04
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing 826.1 0.17

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in the combined year 2020-2021 (333.42 PLN or 74.06€) is -2.3% lower than the nominal DUC (341.41 PLN or 75.85€), which includes DUC initially charged: 200.45 PLN (or 44.49€); and to be charged: 140.96 PLN (or 31.35€). The difference between these two figures (-7.99 PLN/SU or -1.78€/SU) is due to:
- the positive inflation adjustment (+2.61 PLN/SU or +0.57€/SU) resulting from higher than planned inflation;
- the positive adjustment for costs exempt from cost-sharing (+0.80 PLN/SU or +0.17€/SU);
- the deduction of traffic adjustment (-0.31 PLN/SU or -0.07€/SU), for the costs not subject to traffic risk sharing to be reimbursed in future years; and
- the deduction of the other revenues (-11.08 PLN/SU or -2.46€/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 17.1% (or 16.9% while calculating in EUR) .

Regulatory result (RR)

PANSA net gain on activity in the en route charging zone in the combined year 2020-2021
PANSA’s net gain amounts to +225.9 MPLN (or +49.5 M€), mainly due to the gains of +214.9 MPLN from the cost sharing mechanism, and of +11.0 MPLN from the traffic risk sharing mechanism.
PANSA 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 (+49.5 M€) and the actual RoE (+50.8 MPLN or +11.2 M€) amounts to +276.8 MPLN or +60.9 M€ (19.2% of the en route revenues). The resulting ex-post rate of return on equity is 13.0%, which is significantly higher than the 2.4% planned in the PP.