Cost-efficiency - Slovakia
PRB monitoring
▪ The en route 2020/2021 actual unit cost of Slovakia was 73.90 €2017, -8.2% lower than the determined unit cost (80.51 €2017). Slovakia does not have a terminal charging zone.
▪ The en route 2021 actual service units (612K) were in line with the determined service units (609K).
▪ In 2021, Slovakia decreased total costs by -6.9 M€2017 (-16%) compared to determined costs. Slovakia decreased costs in all cost categories, except for depreciation costs. The decrease in total costs was mainly driven by a significant decrease in staff costs (-6.5 M€2017, or -24%) due to the non-payment of the variable salaries, a COVID-19 measure taken in 2020 (for cashflow reasons). The NSA should provide an analysis of the impact on future performance caused by the significantly lower than determined staff costs.
▪ 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 and possi-ble misusing of the regulatory framework to finance the liquidity.
▪ LPS SR spent 7.1 M€2017 in 2021 related to costs of investments, +22% more than determined (5.8 M€2017), due to higher depreciation costs (+1.3 M€2017, or +31%). The NSA explains that the increase is due to the fact that determined costs of investments have been lowered in the plan by the amount underspent in RP2.
▪ The en route actual unit cost incurred by users in 2020/2021 was 80.67€.
En route charging zone
Unit cost (KPI#1)
| Actual and determined data |
| Total costs - nominal (M€) |
2020-2021 |
2022 |
2023 |
2024 |
| Actual costs |
85 |
NA |
NA |
NA |
| Determined costs |
93 |
59 |
62 |
64 |
| Difference costs |
−7 |
NA |
NA |
NA |
| Inflation assumptions |
2020-2021 |
2022 |
2023 |
2024 |
| Determined inflation rate |
NA |
1.9% |
2.0% |
2.1% |
| Determined inflation index |
NA |
110.9 |
113.1 |
115.5 |
| 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 (73.90 €2017) was lower by -8.2% (or -6.61 €2017) compared with the DUC (80.51 €2017). This was mainly the effect of the lower than planned en route costs in real terms (-7.9%, -6.9 M€2017).
En route service units
The difference between actual and planned TSU (+0.3%) 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 -7.9% lower than planned (-6.9 M€2017), which is mainly driven by the lower costs for LPS (-8.3%, or -6.2 M€2017). Actual 2020-2021 costs for METSP and NSA/EUROCONTROL were also lower, by -11.7% (or -0.4 M€2017) and -3.9% (-0.4 M€2017) respectively.
En route costs for the main ANSP at charging zone level
The lower than planned en route costs in real terms for LPS (-8.3%, or -6.2 M€2017) result from:
- lower than planned, by -13.5% (or -6.5 M€2017) en route staff costs reasulted from freezing of variable wage components in 2020 and continuation of this measure in 2021;
- lower, by -6.8% (or -0.9 M€2017) en-route other operating costs due to continuation of the cost containment measures such as limited travel expenses, trainings and consumption of materials, etc.
- higher, by +14.2% (or +1.3 M€2017) depreciation, however, as explained by LPS, the depreciation was in line with the investment plan and the difference came from the deduction in 2021 of the carry-overs of unrealized investments in RP2; and,
- lower costs of capital by -0.7% (or -0.03 M€2017).
Actual unit cost incurred by the users (AUCU) (PI#1)
| AUCU components (€/SU) – 2020-2021 |
| Components of the AUCU in 2020-2021 |
€/SU |
| DUC |
85.37 |
| Inflation adjustment |
0.52 |
| Cost exempt from cost-sharing |
−0.36 |
| Traffic risk sharing adjustment |
0.00 |
| Traffic adj. (costs not TRS) |
−0.04 |
| Finantial incentives |
0.00 |
| Modulation of charges |
0.00 |
| Cross-financing |
0.00 |
| Other revenues |
−4.82 |
| Application of lower unit rate |
0.00 |
| Total adjustments |
−4.70 |
| AUCU |
80.67 |
| AUCU vs. DUC |
−5.5% |
| Cost exempt from cost sharing by item - 2020-2021 |
€'000 |
€/SU |
| New and existing investments |
0.0 |
0.00 |
| Competent authorities and qualified entities costs |
−141.8 |
−0.13 |
| Eurocontrol costs |
−251.9 |
−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 |
−393.7 |
−0.36 |
The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in the combined year 2020-2021 (80.67€) is -5.5% lower than the nominal DUC (85.37€), which includes DUC initially charged: 47.71€; and to be charged: 37.66€. The difference between these two figures (-4.70€/SU) is due to:
- the positive inflation adjustment (+0.52€/SU) resulting from higher than planned inflation;
- the deduction of the adjustment for costs exempt from cost-sharing (-0.36€/SU), to be reimbursed to airspace users in future years;
- the deduction of traffic adjustments (-0.04€/SU), for the costs not subject to traffic risk sharing to be reimbursed to airspace users in future years; and,
- the deduction of other revenues (-4.82€/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 12.3%.
LPS net gain on activity in the en route charging zone in the combined year 2020-2021
LPS’s net gain amounts to +7.2 M€, mainly due to a gain of +6.9 M€ from the cost sharing mechanism and a gain of +0.2 M€ from the traffic risk sharing mechanism.
LPS 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 (+7.2 M€) and the actual RoE (+3.8 M€) amounts to +11.0 M€ (13.8% of the en route revenues). The resulting ex-post rate of return on equity is 13.1% which is higher than the 4.6% planned in the PP.