Cost-efficiency - Malta

Terminal charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 9 5 NA NA
Determined costs 10 6 6 7
Difference costs −2 −1 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 terminal AUC was -34.0% (or -58.95 €2017) lower than the planned DUC. This results from the combination of significantly lower than planned terminal costs in real terms (-36.6%, or -2.0 M€2017) and lower than planned TNSUs (-3.9%).

Terminal service units

The difference between the 2022 actual and planned TNSUs (-3.9%) 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 ATSP and the airspace users, with the ATSP (MATS) bearing a loss of -0.1 M€2017.

Terminal costs by entity

The 2022 actual real terminal costs are -36.6% (-2.0 M€2017) lower than planned. This is the result of lower costs for the main ANSP, MATS (-42.6%, or -1.9 M€2017), the other ANSP (MIA, -10.1%, or -0.05 M€2017) and the NSA (-2.1%, or 0.01 M€2017).

Terminal costs for the main ANSP at charging zone level

Significantly lower than planned terminal costs in real terms for MATS in 2022 (-42.6%, or -1.9 M€2017) result from:
- Significantly lower than planned staff costs (-38.2%, or -0.9 M€2017), “due to the fact that during 2022 some ATCOs obtained the area licence and a portion of their wages was apportioned to en route.”
- Significantly lower than planned other operating costs (-58.0%, or -0.8 M€2017),
- Lower than planned depreciation costs (-30.7%, or -0.2 M€2017), “due to the fact that the actual realised CAPEX was much lower than anticipated.”,
- Lower than planned cost of capital (-32.6%, or -0.03 M€2017), mainly due to significantly lower asset base.

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

AUCU components (€/SU) – 2022
Components of the AUCU in 2022 €/SU
DUC 185.71
Inflation adjustment 1.93
Cost exempt from cost-sharing −17.69
Traffic risk sharing adjustment 2.33
Traffic adj. (costs not TRS) 0.70
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 −12.72
AUCU 172.99
AUCU vs. DUC −6.9%
Cost exempt from cost sharing by item - 2022 €'000 €/SU
New and existing investments −517.9 −17.38
Competent authorities and qualified entities costs −9.0 −0.30
Eurocontrol costs 0.0 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 −526.9 −17.69

The actual terminal unit cost incurred by airspace users (AUCU) in respect of the activities performed in 2022 (190.37 €) is +2.5% higher than the nominal DUC (185.71 €). The difference between these two figures (+4.66 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+1.93 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-0.30 €/SU);
- the addition of the traffic risk sharing adjustments (+2.33 €/SU); and
- the addition of the traffic adjustment (+0.70 €/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 36.7%.

Regulatory result (RR)

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

MATS reported a net gain of +2.0 M€, as a combination of a gain of +2.1 M€ arising from the cost sharing mechanism, with a loss of -0.1 M€ arising from the traffic risk sharing mechanism.

MATS overall regulatory results (RR) for the terminal activity

Ex-post, the overall RR taking into account the net gain from the terminal activity mentioned above (+2.0 M€) and the actual RoE (+0.1 M€) amounts to +2.0 M€ (42.9% of the terminal revenues). The resulting ex-post rate of return on equity is 115.8%, which is higher than the 4.0% planned in the PP.