Cost-efficiency - Switzerland
PRB monitoring
▪ The en route 2020/2021 actual unit cost of Switzerland was 206.71 €2017, +1.5% higher than the determined unit cost (203.64 €2017). The terminal 2020/2021 actual unit cost was 742.45 €2017, -4.5% lower than the determined unit cost (777.80 €2017).
▪ The en route 2021 actual service units (897K) were +2.1% higher than determined (879K).
▪ In 2021, Switzerland decreased total costs by -12 M€2017 (-7.3%) compared to determined costs. The decrease was mainly driven by a decrease in staff costs (-23 M€2017, or -18%), due to a provision on retirement age expected for 2021 but now postponed to 2022.
▪ However, the decrease in several cost categories is not transparent as it includes the non-invoicing of the financing of the delegated airspace, that was initially determined as negative exceptional items. In this regards, Switzerland should improve clarity in the reporting.
▪ Skyguide spent 43 M€2017 in 2021 related to costs of investments, in line with the determined.
▪ The en route actual unit cost incurred by users in 2020/2021 was 212.38€, while the terminal actual unit cost incurred by users was 814.95€.
En route charging zone
| 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%).
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.