Cost-efficiency - Germany

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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 576 313 NA NA
Determined costs 584 294 305 327
Difference costs -8 19 NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 1.1% 1.5% 1.7%
Determined inflation index NA 107.2 108.8 110.6
Actual inflation rate NA 8.7% NA NA
Actual inflation index NA 116.4 NA NA
Difference inflation index (p.p.) NA +9.1 NA NA

AUC vs. DUC

In 2022, the terminal AUC was +19.3% (or +41.82 €2017) higher than the planned DUC. This results from the combination of significantly lower than planned TNSUs (-16.6%) and slightly lower than planned terminal costs in real terms (-0.5%, or -1.5 M€2017). It should be noted that actual inflation index in 2022 was +9.1 p.p. higher than planned.

Terminal service units

The difference between actual and planned TNSUs (-16.6%) falls outside 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 ANSP (DFS) bearing a loss of -10.9 M€2017.

Terminal costs by entity

Actual real terminal costs are -0.5% (-1.5 M€2017) lower than planned. This is the result of lower costs for the MET service provider (-16.3%, or -0.8 M€2017), the main ANSP, DFS (-0.2%, or -0.4 M€2017) and the NSA (-19.3%, or -0.2 M€2017).

Terminal costs for the main ANSP at charging zone level

Slightly lower than planned terminal costs in real terms for DFS in 2022 (-0.2%, or -0.4 M€2017) result from:
- Lower staff costs (-4.2%),mainly as a result of the inflation index impact (+9.1 p.p.) since in nominal terms staff costs are higher than planned (+3.9%) due to special payments in order to maintain capacity as part of the COVID-19 agreements.
- Lower other operating costs (-2.5%), as a result of to the inflation index impact (+9.1 p.p.) since in nominal terms operating cots are higher than planned (+5.8%) due to external personnel for programming work, travel expenses, bike leasing, inflation impacting the increase of costs services.
- Significantly lower depreciation (-17.1%), mainly due to the implementation of the TANGe (Tower Air Traffic Service - ATS next generation)/RTC project.
- Significantly higher cost of capital (+215.9%), “caused by the negative performance of the commercial papers.”

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

AUCU components (€/SU) – 2022
Components of the AUCU in 2022 €/SU
DUC 229.98
Inflation adjustment 20.63
Cost exempt from cost-sharing -5.24
Traffic risk sharing adjustment 33.02
Traffic adj. (costs not TRS) 1.01
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -0.87
Application of lower unit rate 0.00
Total adjustments 48.55
AUCU 278.54
AUCU vs. DUC + 21.1%
Cost exempt from cost sharing by item - 2022 €'000 €/SU
New and existing investments -4,751.7 -4.45
Competent authorities and qualified entities costs -209.5 -0.20
Eurocontrol costs 0.0 0.00
Pension costs -601.6 -0.56
Interest on loans 0.0 0.00
Changes in law -30.6 -0.03
Total cost exempt from cost risk sharing -5,593.3 -5.24

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2022 (278.54 €) is +21.1% higher than the nominal DUC (229.98 €). The difference between these two figures (+48.56 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+20.63 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-5.24 €/SU);
- the addition of the traffic risk sharing adjustments (+33.02 €/SU);
- the addition of the traffic adjustment (+1.01 €/SU) for the costs not subject to traffic risk sharing; and
- the deduction of the other revenues (-0.86 €/SU).
The share of regulatory result in the AUCU (befored the deduction of other revenues) is -5.1%.

Regulatory result (RR)

DFS net gain on activity in the Germany terminal charging zone in the year 2022

DFS reported a net loss of -16.1 M€, as a combination of a loss of -3.4 M€ arising from the cost sharing mechanism, with a loss of -12.7 M€ arising from the traffic risk sharing mechanism.

DFS overall regulatory results (RR) for the terminal activity

Ex-post, the overall RR taking into account the net loss from the terminal activity mentioned above (-16.1 M€) amounts to -16.1 M€ (-5.5% of the terminal revenues), as the RoE for DFS has been set to zero. The resulting ex-post rate of return on equity is -8.6%.

Note 1: The proportion of financing trough equity for 2022A should be corrected to reflect the actual share, in spite of the specific composition of the asset base and the significantly higher than planned cost of capital reported to be due to “the negative development of the commercial papers”. For the purpose of the analysis, it has been set at the level of the 2022D presented in the revised draft performance plan.