Cost-efficiency - Czech Republic

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PRB monitoring

▪ The en route 2022 actual unit cost of Czech Republic was 51.91 €2017, 12% lower than the determined unit cost (59.18 €2017).1 The terminal 2022 actual unit cost was 244.16 €2017, 6.8% lower than the determined unit cost (261.84 €2017).

▪ The en route 2022 actual service units (1,814K) were 1.4% lower than the determined service units (1,841K).

▪ The en route 2022 actual total costs were 15 M€2017 (-14%) lower than determined. All cost categories decreased except cost of capital. The decrease was mainly a result of lower staff costs (-11 M€2017, or -20%), due to a new collective agreement and lower FTEs than expected.

▪ ANS CR spent 30 M€2017 in 2022 related to costs of investments, 4.6% less than planned (32 M€2017), primarily due to changed timelines in some investment projects.

▪ Czech Republic presented a deviation from the criteria to achieve capacity targets, which was considered justified. Considering that costs are significantly lower and that the 2022 en route capacity targets have not been achieved, the situation raises serious concern. The PRB invites the NSA to analyse the discrepancies and identify their reasons and the Member State to rectify the situation to ensure that the additional means granted through the capacity deviation are used to address the capacity issues.

The en route actual unit cost incurred by users in 2022 was 73.65€, while the terminal actual unit cost incurred by users was 322.31€.2 

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 196 109 NA NA
Determined costs 203 118 126 128
Difference costs −7 −8 NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 2.0% 2.0% 2.0%
Determined inflation index NA 112.8 115 117.3
Actual inflation rate NA 14.8% NA NA
Actual inflation index NA 128.2 NA NA
Difference inflation index (p.p.) NA +15.4 NA NA

AUC vs. DUC

In 2022, the en route AUC was -12.3% (or -191.49 CZK2017, -7.28 €2017) lower than the planned DUC. This results from the combination of significantly lower than planned en route costs in real terms (-13.6%, or -388.9 MCZK2017, -14.8 M€2017) and lower than planned TSUs (-1.4%). It should be noted that actual inflation index in 2022 was +15.4 p.p. higher than planned.

En route service units

The difference between actual and planned TSUs (-1.4%) falls inside the ±2% dead band. Hence loss of en route revenues is borne by the ANSPs .

En route costs by entity

Actual real en route costs are -13.6% (-14.8 M€2017) lower than planned. This is the result of lower costs for the main ANSP, ANS CR (-14.9%, or -13.9 M€2017), the NSA/EUROCONTROL (-5.0%, or -0.7 M€2017) and the MET service provider (-10.2%, or -0.2 M€2017).

En route costs for the main ANSP at charging zone level

Significantly lower than planned en route costs in real terms for ANS CR in 2022 (-14.9%, or -13.9 M€2017) result from:
- Significantly lower staff costs (-21.1%) resulting mainly from lower than planned FTEs. This result is also affected by the impact of higher than planned inflation index (+15.4 p.p.).
- Significantly lower other operating costs (-15.6%), resulting from lower costs in many different areas. This result is also affected by the impact of higher than planned inflation index (+15.4 p.p.).
- Lower depreciation (-5.0%), due to the changes in the commissioning dates of some investment projects.
- Higher cost of capital (+3.4%), due to “slightly higher share of financing through equity and slightly higher interest rate of liabilities together with volatility of the CZK/€ exchange rate.”
- Significantly lower deduction for VFR exempted flights (-8.8%).
Note: It is understood that the relevant figures for 2022 will be slightly updated in the Monitoring Report 2023 following the correction of 2022 actual costs in the November 2023 reporting tables.

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

AUCU components (€/SU) – 2022
Components of the AUCU in 2022 €/SU
DUC 68.50
Inflation adjustment 6.15
Cost exempt from cost-sharing −0.90
Traffic risk sharing adjustment 0.00
Traffic adj. (costs not TRS) 0.13
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues −0.21
Application of lower unit rate 0.00
Total adjustments 5.17
AUCU 73.68
AUCU vs. DUC +7.6%
Cost exempt from cost sharing by item - 2022 €'000 €/SU
New and existing investments −952.1 −0.52
Competent authorities and qualified entities costs 770.8 0.42
Eurocontrol costs −1,387.7 −0.76
Pension costs −59.5 −0.03
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing −1,628.5 −0.90

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2022 (1,806.57 CZK or 73.65 €) is +7.5% higher than the nominal DUC (1,680.36 CZK or 68.50 €). The difference between these two figures (+126.21 CZK/SU or +5.15 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+150.87 CZK/SU or +6.15 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-22.74 CZK/SU or -0.93 €/SU);
- the addition of the traffic adjustment (+3.31 CZK/SU or +0.13 €/SU) for the costs not subject to traffic risk sharing; and,
- the deduction of the other revenues (-5.22 CZK/SU or -0.21 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 18.4%.

Note: It is understood from the NSA Report on the verification of cost risk sharing for the year 2022 that the Czech Republic will not recover the difference between the actual and planned NSA costs (+18.9 MCZK or +10.42 CZK/SU) from airspace users. This will be reflected in the November 2023 en route reporting tables.

Regulatory result (RR)

ANS CR net gain on activity in the Czech Republic en route charging zone in the year 2022

ANS CR reported a net gain of +399.0 MCZK, as a combination of a gain of +437.7 MCZK arising from the cost sharing mechanism, with a loss of -38.7 MCZK arising from the traffic risk sharing mechanism.

ANS CR overall regulatory result (RR) for the en route activity

Ex-post, the overall RR taking into account the net gain from the en route activity mentioned above (+399.0 MCZK) and the actual RoE (+195.3 MCZK) amounts to +594.3 MCZK (20.6% of the en route revenues). The resulting ex-post rate of return on equity is 30.4%, which is higher than the 10.0% planned in the PP.