Cost-efficiency - Hungary
PRB monitoring
▪ The en route 2022 actual unit cost of Hungary was 30.25 €2017, 34% lower than the determined unit cost (45.72 €2017). The terminal 2022 actual unit cost was 306.58 €2017, 19% lower than the determined unit cost (378.72 €2017).
▪ The en route 2022 actual service units (3,184K) were 32% higher than the determined service units (2,419K).
▪ In 2022, the en route actual total costs were 14 M€2017 lower (-13%) compared to determined. Hungary had significant decreases in all cost categories except for cost of capital (+2.5 M€2017, or +36%). The NSA explained that the net current assets increased due to the inclusion of pension related obligations towards ATCOs.
▪ The key driver of the decrease was the reduction in staff cost (-7.1 M€2017, or -14%), mainly due to lower headcounts than planned and postponed salary increases, and other operating costs (-8.2 M€2017, or -22%), mainly due to lower procurements costs due to COVID-19.
▪ Hungary 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.
▪ HungaroControl spent 29 M€2017 in 2022 related to costs of investments, 7.5% less than determined (31 M€2017), mainly due to some investments being scheduled later than planned.
▪ The en route actual unit cost incurred by users in 2022 was 33.58€, while the terminal actual unit cost incurred by users was 331.37€.
En route charging zone
Unit cost (KPI#1)
| Actual and determined data |
| Total costs - nominal (M€) |
2020-2021 |
2022 |
2023 |
2024 |
| Actual costs |
191 |
117 |
NA |
NA |
| Determined costs |
195 |
124 |
127 |
132 |
| Difference costs |
−4 |
−7 |
NA |
NA |
| Inflation assumptions |
2020-2021 |
2022 |
2023 |
2024 |
| Determined inflation rate |
NA |
3.5% |
3.3% |
3.0% |
| Determined inflation index |
NA |
118 |
121.9 |
125.5 |
| Actual inflation rate |
NA |
15.3% |
NA |
NA |
| Actual inflation index |
NA |
133.4 |
NA |
NA |
| Difference inflation index (p.p.) |
NA |
+15.4 |
NA |
NA |
AUC vs. DUC
In 2022, the en route AUC was -33.8% (or -4 780.28 HUF2017, -15.47 €2017) lower than the planned DUC. This results from the combination of significantly higher than planned TSUs (+31.6%) and significantly lower than planned en route costs in real terms (-12.9%, or -4 417.6 MHUF2017, -14.3 M€2017). 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 (+31.6%) falls outside the ±10% threshold foreseen in the traffic risk sharing mechanism. The resulting gain of additional en route revenues is therefore shared between the ANSP and the airspace users, with the ANSP (HungaroControl) retaining an amount of +3.6 M€2017.
En route costs by entity
Actual real en route costs are -12.9% (-14.3 M€2017) lower than planned. This is the result of lower costs for the main ANSP, HungaroControl (-13.3%, or -12.7 M€2017), the NSA/EUROCONTROL (-10.9%, or -1.2 M€2017) and the MET service provider (-10.4%, or -0.3 M€2017).
En route costs for the main ANSP at charging zone level
Significantly lower than planned en route costs in real terms for HungaroControl in 2022 (-13.3%, or -12.7 M€2017) result from:
- Significantly lower staff costs (-14.1%), due to the postponement of the pay rise for non-ATCO staff and lower than planned execution of the non-ATCO recruitment plan. This result is also impacted by the higher actual inflation index (+15.4 p.p.).
- Significantly lower other operating costs (-26.8%), mainly due to the slower execution of procurement processes and lower travel and training costs. This result is also impacted by the higher actual inflation index (+15.4 p.p.).
- Significantly lower depreciation (-9.8%), due to changes in the investment commissioning schedule.
- Significantly higher cost of capital (+37.4%), understood to be mainly due to a change (correction) in the methodology used to calculate the net current assets (inclusion of pension related obligations towards ATCOs).
Actual unit cost incurred by the users (AUCU) (PI#1)
| AUCU components (€/SU) – 2022 |
| Components of the AUCU in 2022 |
€/SU |
| DUC |
40.72 |
| Inflation adjustment |
2.95 |
| Cost exempt from cost-sharing |
−0.77 |
| Traffic risk sharing adjustment |
−7.41 |
| Traffic adj. (costs not TRS) |
−1.18 |
| Finantial incentives |
0.00 |
| Modulation of charges |
0.00 |
| Cross-financing |
0.00 |
| Other revenues |
−0.71 |
| Application of lower unit rate |
0.00 |
| Total adjustments |
−7.11 |
| AUCU |
33.60 |
| AUCU vs. DUC |
−17.5% |
| Cost exempt from cost sharing by item - 2022 |
€'000 |
€/SU |
| New and existing investments |
−1,568.3 |
−0.49 |
| Competent authorities and qualified entities costs |
−896.3 |
−0.28 |
| Eurocontrol costs |
0.3 |
0.00 |
| Pension costs |
0.0 |
0.00 |
| Interest on loans |
0.0 |
0.00 |
| Changes in law |
0.0 |
0.00 |
| Total cost exempt from cost risk sharing |
−2,464.2 |
−0.77 |
The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2022 (13 111.30 HUF or 33.58 €) is -17.5% lower than the nominal DUC (15 896.42 HUF or 40.72 €). The difference between these two figures (-2 785.13 HUF/SU or -7.13 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+1 152.64 HUF/SU or +2.95 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-309.87 HUF/SU or -0.79 €/SU);
- the deduction of the traffic risk sharing adjustment (-2 891.14 HUF/SU or -7.41 €/SU);
- the deduction of the traffic adjustment (-459.24 HUF/SU or -1.18 €/SU) for the costs not subject to traffic risk sharing, and,
- the deduction of the other revenues (-277.50 HUF/SU or -0.71 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 21.8%.
HungaroControl net gain on activity in the Hungary en route charging zone in the year 2022
HungaroControl reported a net gain of +6,283.7 MHUF, as a combination of a gain of +4,795.1 MHUF arising from the cost sharing mechanism, with a gain of +1,488.6 MHUF arising from the traffic risk sharing mechanism.
HungaroControl 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 (+6 283.7 MHUF) and the actual RoE (+2 915.5 MHUF) amounts to +9 199.3 MHUF (24.0% of the en route revenues). The resulting ex-post rate of return on equity is 22.6%, which is higher than the 8.0% planned in the PP.