Cost-efficiency - Luxembourg

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PRB monitoring

▪ The en route 2022 actual unit cost of Belgium-Luxembourg was 98.91 €2017, -5.3% lower than the determined unit cost (104.47 €2017).

▪ The terminal actual unit cost of Luxembourg was 243.87 €2017, -1.3% lower than the determined unit cost (247.01 €2017)

▪ The en route 2022 actual service units (2,096K) were in line with the determined service units (2,108K).

▪ The en route 2022 actual total costs were 13 M€2017 (-5.8%) lower compared to the determined, as all cost categories decreased.

▪ The decrease was mainly attributable to lower staff cost (-6.3 M€2017, or -4.0%) and other operating costs (-5.9 M€2017, or -12%). The reduced staff cost was due to lower staff costs in MUAC. The NSA explained that the lower other operating costs is a consequence of delayed investments.

▪ The en route actual unit cost incurred by users of Belgium-Luxembourg in 2022 was 119.54€, while the terminal actual unit cost incurred by users was 236.58€ for Belgium and 243.25€ for Luxembourg.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 432 240 NA NA
Determined costs 442 250 262 252
Difference costs -10 -10 NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 7.8% 4.7% 2.1%
Determined inflation index NA 115.6 123.9 126.5
Actual inflation rate NA 10.3% NA NA
Actual inflation index NA 118.3 NA NA
Difference inflation index (p.p.) NA +2.7 NA NA

AUC vs. DUC

In 2022, the en route AUC was -5.3% (or -5.56 €2017) lower than the planned DUC. This results from the combination of significantly lower than planned en route costs in real terms (-5.8%, or -12.8 M€2017) and slightly lower than planned TSUs (-0.5%). It should be noted that actual inflation index in 2022 was +2.7 p.p. higher than planned.

En route service units

The difference between actual and planned TSUs (-0.5%) falls inside the ±2% dead band. Hence loss of en route revenues is borne by the ANSPs

En route costs by entity

Actual real en route costs are -5.8% (-12.8 M€2017) lower than planned. This is the result of lower costs for the other ANSPs (ANA and MUAC, -12.5%, or -10.0 M€2017) and the main ANSP, skeyes (-2.4%, or -3.0 M€2017), while the NSA/EUROCONTROL costs are higher (+1.1%, or +0.2 M€2017) than planned.

En route costs for the main ANSP at charging zone level

Lower than planned en route costs in real terms for skeyes in 2022 (-2.4%, or -3.0 M€2017) result from:
- Slightly higher staff costs (+0.4%) in real terms, but in nominal terms the staff costs are higher than planned (+2.7%) mainly due to the Belgium automatic mandatory salary indexation of salaries based on the actual inflation (10.3%) which was higher that the planned (7.8%);
- Significantly lower other operating costs (-13.7%), due to delay of certain projects, which has negatively impacted the involvement of external support and license costs.
- Slightly higher depreciation (+0.4%),
- Significantly lower cost of capital (-21.6%), mainly due to a lower fixed asset base.

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

AUCU components (€/SU) – 2022
Components of the AUCU in 2022 €/SU
DUC 118.72
Inflation adjustment 2.46
Cost exempt from cost-sharing -0.20
Traffic risk sharing adjustment 0.00
Traffic adj. (costs not TRS) 0.06
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -1.42
Application of lower unit rate 0.00
Total adjustments 0.90
AUCU 119.63
AUCU vs. DUC + 0.8%
Cost exempt from cost sharing by item - 2022 €'000 €/SU
New and existing investments -729.9 -0.35
Competent authorities and qualified entities costs -27.4 -0.01
Eurocontrol costs 376.2 0.18
Pension costs -30.3 -0.01
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -411.4 -0.20

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2022 (119.54 €) is +0.7% higher than the nominal DUC (118.72 €). The difference between these two figures (+0.82 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+2.46 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-0.28 €/SU);
- the addition of the traffic adjustment (+0.06 €/SU) for the costs not subject to traffic risk sharing; and
- the deduction of the other revenues (-1.42 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 5.7%.

Regulatory result (RR)

skeyes net gain on activity in the Belgium-Luxembourg en route charging zone in the year 2022

skeyes reported a net gain of +2.5 M€, as a combination of a gain of +3.3 M€ arising from the cost sharing mechanism, with a loss of -0.7 M€ arising from the traffic risk sharing mechanism.

skeyes 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 (+2.5 M€) and the actual RoE (+1.1 M€) amounts to +3.6 M€ (2.5% of the en route revenues). The resulting ex-post rate of return on equity is 8.4%, which is higher than the 2.5% planned in the PP.