Cost-efficiency - Malta

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PRB monitoring

▪ The en route 2022 actual unit cost of Malta was 27.83 €2017, 1.4% higher than the determined unit cost (27.44 €2017). The terminal 2022 actual unit cost was 114.43 €2017, 34% lower than the determined unit cost (173.37 €2017).

▪ The en route 2022 actual service units (667K) were 18% lower than the determined service units (811K).

▪ The en route 2022 actual total costs were 3.7 M€2017 (-17%) lower than determined. The reduction was mainly due to significant decreases in other operating costs (-2.7 M€2017, or -33%) and depreciation costs (-1.1 M€2017, or -39%). The NSA did not provide explanations for the variations of costs.

▪ MATS spent 2.5 M€2017 in 2022 related to costs of investments, 42% less than determined (4.3 M€2017), as a result of lower depreciation and cost of capital. The NSA did not provide an explanation for the substantial decrease.

▪ The discrepancies regarding costs of investments are significant. The PRB invites the NSA to analyse the discrepancies, identify their reasons, and the Member State to take immediate, adequate, and proportionate action to ensure the implementation of the investment plans to avoid future capacity gaps.

▪ Malta did not provide the required data in time and with the required quality. The PRB recommends that the NSA put in place a solid process for reporting in order to fulfil the Regulation requirements.

▪ The en route actual unit cost incurred by users in 2022 was 34.39€, while the terminal actual unit cost incurred by users was 190.37€.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 40 20 NA NA
Determined costs 42 24 24 26
Difference costs −2 −3 NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 4.7% 2.8% 2.1%
Determined inflation index NA 109.7 112.8 115.1
Actual inflation rate NA 6.1% NA NA
Actual inflation index NA 111.2 NA NA
Difference inflation index (p.p.) NA +1.5 NA NA

AUC vs. DUC

In 2022, the en route AUC was +1.4% (or +0.39 €2017) higher than the planned DUC. This results from the combination of significantly lower than planned TSUs (-17.8%) and significantly lower than the planned en route costs in real terms (-16.6%, or -3.7 M€2017).

En route service units

The difference between 2022 actual and planned TSUs (-17.8%) falls outside the ±10% threshold foreseen in the traffic risk sharing mechanism. The resulting loss of en route revenues is therefore shared between the ANSP and the airspace users, with the ANSP (MATS) bearing a loss of -0.8 M€2017.

En route costs by entity

The 2022 actual real en route costs are -16.6% (-3.7 M€2017) lower than planned. This is the result of lower costs for the main ANSP, MATS (-18.4%, or -3.5 M€2017) and lower NSA/EUROCONTROL costs (-5.7%, or -0.2 M€2017).

En route costs for the main ANSP at charging zone level

Significantly lower than planned en route costs in real terms for MATS in 2022 (-18.4%, or -3.5 M€2017) result from:
- Higher than planned staff costs (+3.4%, or +0.3 M€2017),
- Significantly lower than planned other operating costs (-40.0%, or -2.5 M€2017),
- Significantly lower than planned depreciation costs (-38.6%, or -1.1 M€2017),
- lower than planned cost of capital (-33.7% or -0.2 M€2017).
*There are no explanations available in the Additional information to the reporting tables regarding the differences between the 2022 determined and actual costs.

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

AUCU components (€/SU) – 2022
Components of the AUCU in 2022 €/SU
DUC 29.30
Inflation adjustment 0.34
Cost exempt from cost-sharing −2.78
Traffic risk sharing adjustment 4.00
Traffic adj. (costs not TRS) 1.02
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 2.58
AUCU 31.89
AUCU vs. DUC +8.8%
Cost exempt from cost sharing by item - 2022 €'000 €/SU
New and existing investments −1,810.4 −2.71
Competent authorities and qualified entities costs 0.0 0.00
Eurocontrol costs −43.2 −0.06
Pension costs 0.0 0.00
Interest on loans −0.2 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing −1,853.9 −2.78

The actual en route unit cost incurred by airspace users (AUCU) in respect of the activities performed in 2022 (34.39 €) is +17.4% higher than the nominal DUC (29.30 €). The difference between these two figures (+5.09 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+0.34 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-0.27 €/SU);
- the addition of the traffic risk sharing adjustments (+4.00 €/SU); and
- the addition of the traffic adjustment (+1.02 €/SU) for the costs not subject to traffic risk sharing.
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 14.8%.

Regulatory result (RR)

MATS net gain on activity in the Malta en route charging zone in the year 2022

MATS reported a net gain of +2.9 M€, as a combination of a gain of +3.8 M€ arising from the cost sharing mechanism and a loss of -0.9 M€ arising from the traffic risk sharing mechanism.

MATS 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 (+2.9 M€) and the actual RoE (+0.5 M€) amounts to +3.4 M€ (17.0% of the en route revenues). The resulting ex-post rate of return on equity is 26.6%, which is higher than the 4.0% planned in the PP.