Cost-efficiency - Czech Republic

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Terminal charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 31 17 NA NA
Determined costs 32 17 20 21
Difference costs -1 -1 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 terminal AUC was -6.8% (or -465.19 CZK2017, -17.68 €2017) lower than the planned DUC. This results from the combination of significantly lower than planned terminal costs in real terms (-12.0%, or -50.0 MCZK2017, -1.9 M€2017) and significantly lower than planned TNSUs (-5.6%). It should be noted that actual inflation index in 2022 was +15.4 p.p. higher than planned.

Terminal service units

The difference between actual and planned TNSUs (-5.6%) falls outside the ±2% dead band, but does not exceed the ±10% threshold foreseen in the traffic risk sharing mechanism. The resulting loss of terminal revenues is therefore shared between the ANSP and the airspace users, with the main ANSP (ANS CR) bearing a loss of -0.4 M€2017.

Terminal costs by entity

Actual real terminal costs are -12.0% (-1.9 M€2017) lower than planned. This is the result of lower costs for the main ANSP, ANS CR (-11.6%, or -1.8 M€2017), the MET service provider (-32.8%, or -0.1 M€2017) and the NSA (-3.5%, or -0.01 M€2017).

Terminal costs for the main ANSP at charging zone level

Significantly lower than planned terminal costs in real terms for ANS CR in 2022 (-11.6%, or -1.8 M€2017) result from:
- Significantly lower staff costs (-6.3%) mainly due to the inflation index impact (+15.4 p.p.). In nominal terms, the actual staff costs are higher than planned by +6.5% due to the new collective agreement and higher than planned maximum calculation cap for payment of social security premium.
- Significantly lower other operating costs (-28.5%), 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.).
- Significantly lower depreciation (-16.7%), due to the changes in the commissioning date of some projects.
- Higher cost of capital (+2.3%) due to slightly higher share of financing through equity and slightly higher interest rate of liabilities.

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

AUCU components (€/SU) – 2022
Components of the AUCU in 2022 €/SU
DUC 305.15
Inflation adjustment 31.09
Cost exempt from cost-sharing -10.92
Traffic risk sharing adjustment 7.90
Traffic adj. (costs not TRS) 0.68
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues 0.00
Application of lower unit rate -14.19
Total adjustments 14.55
AUCU 319.70
AUCU vs. DUC + 4.8%
Cost exempt from cost sharing by item - 2022 €'000 €/SU
New and existing investments -668.0 -11.71
Competent authorities and qualified entities costs -8.6 -0.15
Eurocontrol costs 0.0 0.00
Pension costs 53.6 0.94
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -623.0 -10.92

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2022 (7 906.27 CZK or 322.31 €) is +5.6% higher than the nominal DUC (7 485.31 CZK or 305.15 €). The difference between these two figures (+420.95 CZK/SU or +17.16 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+762.51 CZK/SU or +31.09 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-203.89 CZK/SU or -8.31 €/SU);
- the addition of the traffic risk sharing adjustment (+193.86 CZK/SU or +7.90 €/SU);
- the addition of the traffic adjustment (+16.66 CZK/SU or +0.68 €/SU) for the costs not subject to traffic risk sharing; and,
- the application of a lower unit rate as foreseen in Art. 29(6) in year 2022 (-348.20 CZK/SU or -14.19 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 13.6%.

Regulatory result (RR)

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

ANS CR reported a net gain of +30.7 MCZK, as a combination of a gain of +44.2 MCZK arising from the cost sharing mechanism, with a loss of -13.5 MCZK arising from the traffic risk sharing mechanism.

ANS CR overall regulatory result (RR) for the terminal activity

Ex-post, the overall RR taking into account the net gain from the terminal activity mentioned above (+30.7 MCZK) and the actual RoE (+26.5 MCZK) amounts to +57.3 MCZK (12.6% of the terminal revenues). The resulting ex-post rate of return on equity is 21.6%, which is higher than the 10.0% planned in the PP.

Note 1: It should be noted that, since the Czech Republic caps the terminal UR, the ex-post RR is partially offset by the loss of revenues due to the application of the lower unit rate as per Art. 29.6 (loss of revenue as per Art. 29.6 in 2022 corresponds to -19.90 MCZK).