Cost-efficiency - Bulgaria

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PRB monitoring

▪ The en route 2022 actual unit cost of Bulgaria was 25.86 €2017, 25% lower than the determined unit cost (34.55 €2017). Bulgaria does not have a terminal charging zone.

▪ The en route 2022 actual service units (3,871K) were 24% higher than the determined service units (3,109K).

▪ The en route 2022 actual total costs were 7.3 M€2017 (-6.8%) lower than determined. The decrease was attributable to lower staff costs (-5.6 M€2017, or -8.5%) and other operating costs (-3.0 M€2017, or -17%). Although total actual costs in nominal terms were slightly higher (+1.3%) than planned, the decreases in real terms were mainly resulting from higher-than-expected inflation.

▪ BULATSA spent 18.9 M€2017 in 2022 related to costs of investments, 2.6% higher than determined (18.4 M€2017). This was due to an increase in the depreciation cost, even though the net book value of fixed assets decreased.

▪ The en route actual unit cost incurred by users in 2022 was 33.11€.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 200 116 NA NA
Determined costs 205 115 126 129
Difference costs −5 2 NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 2.0% 2.0% 2.0%
Determined inflation index NA 109.6 111.8 114
Actual inflation rate NA 13.0% NA NA
Actual inflation index NA 123.6 NA NA
Difference inflation index (p.p.) NA +14.1 NA NA

AUC vs. DUC

In 2022, the en route AUC was -25.1% (or -16.99 BGN2017, -8.69 €2017) lower than the planned DUC. This results from the combination of significantly higher than planned TSUs (+24.5%) and significantly lower than planned en route costs in real terms (-6.8%, or -14.3 MBGN2017, -7.3 M€2017). It should be noted that actual inflation index in 2022 was +14.1 p.p. higher than planned.

En route service units

The difference between actual and planned TSUs (+24.5%) falls outside the ±10% threshold foreseen in the traffic risk sharing mechanism. The resulting gain of additional en route revenues is therefore shared between the ANSP and the airspace users, with the ANSP (BULATSA) retaining an amount of +3.6 M€2017.

En route costs by entity

Actual real en route costs are -6.8% (-7.3 M€2017) lower than planned. This is the result higher than planned inflation with a significant impact on costs for the main ANSP, BULATSA (-6.5%, or -6.4 M€2017) and the NSA/EUROCONTROL (-10.8%, or -0.9 M€2017).

En route costs for the main ANSP at charging zone level

Significantly lower than planned en route costs in real terms for BULATSA in 2022 (-6.5%, or -6.4 M€2017) result mainly from a higher than planned inflation:
- Significantly lower than planned staff costs (-8.6%) in real terms but higher in nominal terms (+3.1%), reported to be due to “BULATSA normalising levels of payment in line with traffic levels increase and in response to high inflation in Bulgaria over 2022 (>15% on a monthly roll-over basis)”;
- Significantly lower than planned other operating costs (-19.4%), reported to be mainly due to “lower than expected impairment of receivables, lower mission and training costs, etc”;
- Significantly higher than planned depreciation costs (+11.7%), reported to be due to “BULATSA continued fulfilment of all critically important investments and commissioned assets”;
- Higher cost of capital (+1.2%).

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

AUCU components (€/SU) – 2022
Components of the AUCU in 2022 €/SU
DUC 36.90
Inflation adjustment 2.77
Cost exempt from cost-sharing −0.02
Traffic risk sharing adjustment −5.26
Traffic adj. (costs not TRS) −0.85
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues −0.42
Application of lower unit rate 0.00
Total adjustments −3.78
AUCU 33.12
AUCU vs. DUC −10.2%
Cost exempt from cost sharing by item - 2022 €'000 €/SU
New and existing investments 471.0 0.12
Competent authorities and qualified entities costs −459.6 −0.12
Eurocontrol costs −354.8 −0.09
Pension costs 267.6 0.07
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing −75.8 −0.02

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2022 (64.73 BGN or 33.11 €) is -10.3% lower than the nominal DUC (72.16 BGN or 36.90 €). The difference between these two figures (-7.42 BGN/SU or -3.80 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+5.41 BGN/SU or +2.77 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-0.07 BGN/SU or -0.04 €/SU);
- the deduction of the traffic risk sharing adjustments (-10.28 BGN/SU or -5.26 €/SU);
- the deduction of the traffic adjustment (-1.66 BGN/SU or -0.85 €/SU) for the costs not subject to traffic risk sharing; and
- the deduction of the other revenues (-0.82 BGN/SU or -0.42 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 20.0%.

Regulatory result (RR)

BULATSA net gain on activity in the Bulgaria en route charging zone in the year 2022

BULATSA reported a net gain of +26.4 MBGN, as a combination of a gain of +17.7 MBGN arising from the cost sharing mechanism, with a gain of +8.7 MBGN arising from the traffic risk sharing mechanism.

BULATSA 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 (+26.4 MBGN) and the actual RoE (+24.4 MBGN) amounts to +50.8 MBGN (21.2% of the en route revenues). The resulting ex-post rate of return on equity is 14.6%, which is higher than the 7.0% planned in the PP.