Cost-efficiency - Estonia
PRB monitoring
▪ The en route 2022 actual unit cost of Estonia was 52.22 €2017, 50% higher than the determined unit cost (34.80 €2017). The terminal 2022 actual unit cost was 137.53 €2017, 6.0% higher than the determined unit cost (129.77 €2017).
▪ The en route 2022 actual service units (429K) were 41% lower than the determined service units (727K).
▪ In 2022, the en route actual total costs were 2.9 M€2017 (-12%) lower than determined. The main contributor was the decrease in staff costs (-1.9 M€2017, or -15%) as a result of the significantly higher in inflation than planned, and other operating costs (-0.9 M€2017, or -12%), due to cost-cutting measures to reduce losses.
▪ EANS spent 4.8 M€2017 in 2022 related to costs of investments, in line with determined. However, depreciation costs decreased due to changes in implementation dates of investments, while cost of capital increased due to a significant higher financing through equity than planned.
▪ The en route actual unit cost incurred by users in 2022 was 66.39€, while the terminal actual unit cost incurred by users was 127.88€.
En route charging zone
Unit cost (KPI#1)
| Actual and determined data |
| Total costs - nominal (M€) |
2020-2021 |
2022 |
2023 |
2024 |
| Actual costs |
53 |
26 |
NA |
NA |
| Determined costs |
54 |
27 |
28 |
30 |
| Difference costs |
0 |
−1 |
NA |
NA |
| Inflation assumptions |
2020-2021 |
2022 |
2023 |
2024 |
| Determined inflation rate |
NA |
2.5% |
2.1% |
1.9% |
| Determined inflation index |
NA |
110.4 |
112.7 |
114.8 |
| Actual inflation rate |
NA |
19.4% |
NA |
NA |
| Actual inflation index |
NA |
132 |
NA |
NA |
| Difference inflation index (p.p.) |
NA |
+21.6 |
NA |
NA |
AUC vs. DUC
In 2022, the en route AUC was +50.0% (or +17.42 €2017) higher than the planned DUC. This results from the combination of significantly lower than planned TSUs (-41.0%) and significantly lower than planned en route costs in real terms (-11.5%, or -2.9 M€2017). It should be noted that actual inflation index in 2022 was +21.6 p.p. higher than planned.
En route service units
The difference between actual and planned TSUs (-41.0%) falls outside the ±10% threshold foreseen in the traffic risk sharing mechanism. The resulting loss of en route revenues is therefore shared between the ANSP and the airspace users, with the ANSP (EANS) bearing a loss of -0.7 M€2017.
En route costs by entity
Actual real en route costs are -11.5% (-2.9 M€2017) lower than planned. This is the result of lower costs for the main ANSP, EANS (-15.2%, or -2.9 M€2017) and the NSA/EUROCONTROL (-0.8%, or -0.1 M€2017).
En route costs for the main ANSP at charging zone level
Significantly lower than planned en route costs in real terms for EANS in 2022 (-15.2%, or -2.9 M€2017) result from:
- Significantly lower staff costs (-17.6%) including lower pension costs in 2022. The substantial decrease in real terms is mainly due to the inflation index impact (+21.6 p.p.). In nominal terms, staff costs are -1.4% lower than planned.
- Significantly lower other operating costs in real terms (-24.7%) reflecting the inflation impact but also “extensive cost-cutting measures to reduce losses. Travelling expenses, equipment maintenance costs and training expenses were the main items for savings.”
- Significantly lower depreciation (-8.6%) due to a delay in the implementation of new and existing investments,
- Significantly higher cost of capital (+20.9%) due to a higher share of financing through equity than planned in the determined cost.
Actual unit cost incurred by the users (AUCU) (PI#1)
| AUCU components (€/SU) – 2022 |
| Components of the AUCU in 2022 |
€/SU |
| DUC |
36.85 |
| Inflation adjustment |
7.23 |
| Cost exempt from cost-sharing |
−0.31 |
| Traffic risk sharing adjustment |
17.21 |
| Traffic adj. (costs not TRS) |
6.38 |
| Finantial incentives |
0.00 |
| Modulation of charges |
0.00 |
| Cross-financing |
0.00 |
| Other revenues |
−0.85 |
| Application of lower unit rate |
0.00 |
| Total adjustments |
29.67 |
| AUCU |
66.52 |
| AUCU vs. DUC |
+80.5% |
| Cost exempt from cost sharing by item - 2022 |
€'000 |
€/SU |
| New and existing investments |
−64.3 |
−0.15 |
| Competent authorities and qualified entities costs |
21.3 |
0.05 |
| Eurocontrol costs |
−53.6 |
−0.13 |
| Pension costs |
−36.0 |
−0.08 |
| Interest on loans |
0.0 |
0.00 |
| Changes in law |
0.0 |
0.00 |
| Total cost exempt from cost risk sharing |
−132.6 |
−0.31 |
The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2022 (66.39 €) is +80.2% higher than the nominal DUC (36.85 €). The difference between these two figures (+29.54 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+7.23 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-0.44 €/SU);
- the addition of the traffic risk sharing adjustments (+17.21 €/SU);
- the addition of the traffic adjustment (+6.38 €/SU) for the costs not subject to traffic risk sharing; and,
- the deduction of the other revenues (-0.85 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 13.0%.
EANS net gain on activity in the Estonia en route charging zone in the year 2022
EANS reported a net gain of +2.7 M€, as a combination of a gain of +3.6 M€ arising from the cost sharing mechanism, with a loss of -0.9 M€ arising from the traffic risk sharing mechanism.
EANS 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 (+2.7 M€) and the actual RoE (+1.0 M€) amounts to +3.7 M€ (16.7% of the en route revenues). The resulting ex-post rate of return on equity is 26.9%, which is higher than the 7.3% planned in the PP.