Cost-efficiency - Finland

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PRB monitoring

▪ The en route 2022 actual unit cost of Finland was 61.25 €2017, +26% higher than the determined unit cost (48.63 €2017).4 The terminal 2022 actual unit cost was 182.39 €2017, +16% higher than the determined unit cost (157.04 €2017).

▪The en route 2022 actual service units (598K) were -33% lower than the determined (894K).

▪ The en route 2022 actual total costs were 6.9 M€2017 lower (-16%) compared to determined, as all cost categories decreased.

▪ The main reason for the reduction was the lower staff costs (-3.5 M€2017, or -15%), due to savings as a result of Russia’s war of aggression against Ukraine. Other operating costs decreased (-2.1 M€2017, or -13%) due to savings in several cost categories (e.g. lower travel costs, less purchase of equipment, etc.). Depreciation and cost of capital decreased due to postponing investments.

▪ Fintraffic ANS spent 5.6 M€2017 in 2022 related to costs of investments, -16% lower than determined (6.7 M€2017) due to postponed investments, mainly caused by cost-cutting measures as a result of Russia’s war of aggression against Ukraine.

▪ The en route actual unit cost incurred by users in 2022 was 68.04€, while the terminal actual unit cost incurred by users was 225.77€.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 75 40 NA NA
Determined costs 79 45 48 50
Difference costs -4 -6 NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 1.5% 1.6% 1.8%
Determined inflation index NA 105.7 107.4 109.3
Actual inflation rate NA 7.2% NA NA
Actual inflation index NA 112.4 NA NA
Difference inflation index (p.p.) NA +6.7 NA NA

AUC vs. DUC

In 2022, the en route AUC was +26.0% (or +12.62 €2017) higher than the planned DUC. This results from the combination of significantly lower than planned TSUs (-33.1%) and significantly lower than planned en route costs in real terms (-15.8%, or -6.9 M€2017). It should be noted that actual inflation index in 2022 was +6.7 p.p. higher than planned.

En route service units

The difference between actual and planned TSUs (-33.1%) 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 (Fintraffic ANS) bearing a loss of -1.5 M€2017.

En route costs by entity

Actual real en route costs are -15.8% (-6.9 M€2017) lower than planned. This is the result of lower costs for the main ANSP, Fintraffic ANS (-17.7%, or -6.6 M€2017), the MET service provider (-9.1%, or -0.2 M€2017) and the NSA/EUROCONTROL (-1.5%, 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 Fintraffic ANS in 2022 (-17.7%, or -6.6 M€2017) result from:
- Significantly lower staff costs (-16.9%) resulting from cost-savings (temporary lay-offs, lower head count, abandoning bonuses, lower pension costs, postponing recruiting, etc.) introduced to compensate for significantly lower than planned traffic due to the war in Ukraine;
- Significantly lower other operating costs (-15.3%) due to cost-savings in many cost categories (Group service fees, training, travel, telecommunication costs, etc.);
- Significantly lower depreciation (-23.9%) and cost of capital (-41.1%) resulting from postponed investments; and,
- Significantly lower deduction for VFR exempted flights (-5.9%).
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 50.89
Inflation adjustment 3.93
Cost exempt from cost-sharing -1.98
Traffic risk sharing adjustment 18.73
Traffic adj. (costs not TRS) 3.60
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -7.05
Application of lower unit rate 0.00
Total adjustments 17.24
AUCU 68.12
AUCU vs. DUC + 33.9%
Cost exempt from cost sharing by item - 2022 €'000 €/SU
New and existing investments -1,160.4 -1.94
Competent authorities and qualified entities costs 0.0 0.00
Eurocontrol costs -10.9 -0.02
Pension costs -10.9 -0.02
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -1,182.2 -1.98

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2022 (68.04 €) is +33.7% higher than the nominal DUC (50.89 €). The difference between these two figures (+17.16 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+3.93 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-2.06 €/SU);
- the addition of the traffic risk sharing adjustments (+18.73 €/SU);
- the addition of the traffic adjustment (+3.60 €/SU) for the costs not subject to traffic risk sharing; and,
- the deduction of the other revenues (-7.05 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 11.7%.

Regulatory result (RR)

Fintraffic ANS net gain on activity in the Finland en route charging zone in the year 2022

Fintraffic ANS reported a net gain of +4.3 M€, as a combination of a gain of +6.1 M€ arising from the cost sharing mechanism, with a loss of -1.7 M€ arising from the traffic risk sharing mechanism.

Fintraffic ANS 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 (+4.3 M€) and the actual RoE (+0.6 M€) amounts to +5.0 M€ (13.0% of the en route revenues). The resulting ex-post rate of return on equity is 33.4%, which is higher than the 4.3% planned in the PP.