Cost-efficiency - Italy

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PRB monitoring

▪ The en route 2022 actual unit cost of Italy was 62.12 €2017, -16% lower than the determined unit cost (73.67 €2017). The terminal zone 1 2022 actual unit cost was 192.48 €2017, 7.4% higher than the determined unit cost (179.29 €2017), while the terminal zone 2 2022 actual unit cost was 181.00 €2017, -17% lower than the determined unit cost (219.23 €2017).

▪ The en route 2022 actual service units (9,562K) were +12% higher than the determined service units (8,507K).

▪ The en route 2022 actual total costs were 33 M€2017 (-5.2%) lower than determined. With the exception of cost of capital, Italy decreased the costs in all cost categories.

▪ The decrease in staff cost (-20 M€2017, or -5.7%) was a result of higher inflation than expected. The NSA explained that the decrease in other operating costs (-13 M€2017, or -8.6%) was mainly due to lower external and maintenance costs. The cost of capital on the other hand increased significantly by 22% (+8.3 M€2017) due to higher interest on debt than planned.

▪ ENAV spent 135 M€2017 in 2022 related to costs of investments, -2.1% less than determined (137 M€2017). The reduction was driven by a decrease in depreciation costs.

▪ The en route actual unit cost incurred by users in 2022 was 74.13€, while the terminal zone 1 actual unit cost incurred by users was 211.31€ and 218.92€ for terminal zone 2.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 1,186 641 NA NA
Determined costs 1,197 651 674 689
Difference costs -12 -9 NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 1.8% 1.2% 1.2%
Determined inflation index NA 105.3 106.6 107.9
Actual inflation rate NA 8.7% NA NA
Actual inflation index NA 112.8 NA NA
Difference inflation index (p.p.) NA +7.4 NA NA

AUC vs. DUC

In 2022, the en route AUC was -15.7% (or -11.56 €2017) lower than the planned DUC. This results from the combination of significantly higher than planned TSUs (+12.4%) and significantly lower than planned en route costs in real terms (-5.2%, or -32.8 M€2017). It should be noted that the actual inflation index in 2022 was +7.4 p.p. higher than planned.

En route service units

The difference between the 2022 actual and planned TSUs (+12.4%) 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 (ENAV) retaining an amount of +21.0 M€2017.

En route costs by entity

The 2022 actual real en route costs are -5.2% (-32.8 M€2017) lower than planned mainly due to the inflation impact. This translates in lower than planned costs in real terms for ENAV (-5.4%, or -28.4 M€2017), the other ANSP (ITAF, -6.0%, or -3.0 M€2017) and the NSA/EUROCONTROL (-2.8%, or -1.3 M€2017).

En route costs for the main ANSP at charging zone level

The 2022 actual real en route costs for ENAV are significantly lower than planned (-5.4%, or -28.4 M€2017) mainly due to the inflation impact:
- Significantly lower than planned staff costs (-5.5% or -17.8 M€2017) in real terms but higher than planned in nominal terms (+1.1%), also reported to be due to higher staff presence on site to manage the Summer traffic;
- Significantly lower than planned other operating costs (-12.5%, or -10.4 M€2017), reported to result “from savings in consultancy support which more than offset the increase in energy prices, lower maintenance costs, as well as lower external costs following the slowdown in ENAV investments”;
- Significantly lower than planned depreciation costs (-9.7%, or -8.6 M€2017);
- Significantly higher than planned cost of capital (+22.2%, or +8.3 M€2017) due to higher than planned interest rate (from 1.86% to 3.86%) and a higher than planned asset base (+7.8%).

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

AUCU components (€/SU) – 2022
Components of the AUCU in 2022 €/SU
DUC 76.50
Inflation adjustment 3.49
Cost exempt from cost-sharing -0.85
Traffic risk sharing adjustment -4.49
Traffic adj. (costs not TRS) -1.47
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -0.24
Application of lower unit rate 0.00
Total adjustments -3.57
AUCU 72.93
AUCU vs. DUC -4.7%
Cost exempt from cost sharing by item - 2022 €'000 €/SU
New and existing investments -7,022.2 -0.73
Competent authorities and qualified entities costs 39.9 0.00
Eurocontrol costs -810.9 -0.08
Pension costs 0.0 0.00
Interest on loans -312.1 -0.03
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -8,105.4 -0.85

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2022 (74.13 €) is -3.1% lower than the nominal DUC (76.50 €). The difference between these two figures (-2.37 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+3.49 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-0.22 €/SU);
- the deduction of the traffic risk sharing adjustments (-4.49 €/SU);
- the deduction of the traffic adjustment (-1.47 €/SU) for the costs not subject to traffic risk sharing;
- thefinancial incentives (+0.58 €/SU) which remain under review by the European Commission; and
- the deduction of the other revenues (-0.24 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 13.9%.

Regulatory result (RR)

ENAV net gain on activity in the Italy en route charging zone in the year 2022

ENAV reported a net gain of +60.4 M€, as a combination of a gain of +31.2 M€ arising from the cost sharing mechanism, with a gain of +23.6 M€ arising from the traffic risk sharing mechanism and a gain of +5.5 M€ relating to financial incentives. It should be noted that the application of financial incentives for year 2022 is under review by the European Commission, in accordance with Commission Implementing Regulation (EU) 2020/1627 of 3 November 2020.

ENAV 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 above mentioned (+60.4 M€) and the actual RoE (+35.3 M€) amounts to +95.7 M€ (or 15.7% of the en route revenues). The resulting ex-post rate of return on equity is +11.8%, which is higher than the +4.4% planned in the PP.