Cost-efficiency - Italy

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Terminal charging zone - Italy Zone 1

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 60 33 NA NA
Determined costs 62 33 34 34
Difference costs −1 0 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 terminal AUC was +7.4% (or +13.19 €2017) higher than the planned DUC. This results from the combination of significantly lower than planned TNSUs (-9.8%) and lower than planned terminal costs in real terms (-3.2%, or -1.0 M€2017). It should be noted that actual inflation index in 2022 was +7.4 p.p. higher than planned.

Terminal service units

The difference between actual and planned TNSUs (-9.8%) falls outside the ±2% dead band, but does not exceed 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 (ENAV) bearing a loss of -1.2 M€2017.

Terminal costs by entity

The 2022 actual real terminal costs for the TCZ1 are -3.2% (-1.0 M€2017) lower than planned, mainly due to the inflation impact since in nominal terms the costs are +1.3% higher than planned. This translates in lower than planned costs for the main ANSP, ENAV (-3.3%, or -1.0 M€2017) and higher costs for the NSA (+6.9%, or +0.02 M€2017).

Terminal costs for the main ANSP at charging zone level

The terminal zone 1 costs in real terms for ENAV are lower than planned in 2022 (-3.3%, or -1.0 M€2017) mainly due to the inflation impact :
- Lower than planned staff costs in real terms (-3.8%, or -0.6 M€2017), mainly due to the inflation impact since in nominal terms staff costs are higher than planned (+2.9%), and reported to be mainly due to higher staff presence on site to manage the Summer traffic;
- Significantly lower other operating costs (-12.9%, or -0.7 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 depreciation costs (-9.7%, or -0.6 M€2017);
- Significantly higher cost of capital (+22.2%, or +0.9 M€2017) due to higher than planned average interest rate (from 1.86% to 3.86%) and a higher 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 185.77
Inflation adjustment 9.97
Cost exempt from cost-sharing −0.65
Traffic risk sharing adjustment 10.39
Traffic adj. (costs not TRS) 1.57
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues 0.00
Application of lower unit rate 0.00
Total adjustments 21.28
AUCU 207.04
AUCU vs. DUC +11.5%
Cost exempt from cost sharing by item - 2022 €'000 €/SU
New and existing investments −191.4 −1.21
Competent authorities and qualified entities costs 15.4 0.10
Eurocontrol costs 0.0 0.00
Pension costs 0.0 0.00
Interest on loans 72.3 0.46
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing −103.7 −0.65

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2022 (211.31 €) is +13.8% higher than the nominal DUC (185.77 €). The difference between these two figures (+25.54 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+9.97 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (+1.57 €/SU);
- the addition of the traffic risk sharing adjustments (+10.39 €/SU);
- the addition of the traffic adjustment (+1.57 €/SU) for the costs not subject to traffic risk sharing; and
- the financial incentives (+2.05 €/SU) which remain under review by the European Commission.
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 12.4%.

Regulatory result (RR)

ENAV net gain on activity in the Italy terminal charging zone 1 in the year 2022

ENAV reported a net gain of +0.4 M€, as a combination of a gain of +1.4 M€ arising from the cost sharing mechanism, with a loss of -1.3 M€ arising from the traffic risk sharing mechanism and a gain of +0.3 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 terminal charging zone 1 activity

Ex-post, the overall RR taking into account the net gain from the terminal activity mentioned above (+0.4 M€) and the actual RoE (+3.7 M€) amounts to +4.2 M€ (12.5% of the terminal revenues of the TCZ1). The resulting ex-post rate of return on equity is +4.9%, which is higher than the +4.4% planned in the PP.