Cost-efficiency - Netherlands

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Terminal charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 142 74 NA NA
Determined costs 143 75 78 80
Difference costs −2 −1 NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 1.5% 1.6% 1.6%
Determined inflation index NA 108.6 110.3 112.1
Actual inflation rate NA 11.6% NA NA
Actual inflation index NA 121 NA NA
Difference inflation index (p.p.) NA +12.5 NA NA

AUC vs. DUC

In 2022, the terminal AUC was -17.6% (or -39.00 €2017) lower than the planned DUC. This results from the combination of significantly lower than planned terminal costs in real terms (-10.4%, or -7.3 M€2017) and significantly higher than planned TNSUs (+8.7%). It should be noted that actual inflation index in 2022 was +12.5 p.p. higher than planned.

Terminal service units

The difference between actual and planned TNSUs (+8.7%) falls outside the ±2% dead band, but does not exceed the ±10% threshold foreseen in the traffic risk sharing mechanism. The resulting gain of additional terminal revenues is therefore shared between the ANSP and the airspace users, with the ANSP (LVNL) retaining an amount of +2.4 M€2017.

Terminal costs by entity

Actual real terminal costs are -10.4% (-7.3 M€2017) lower than planned. This is the result of lower costs for the main ANSP, LVNL (-10.3%, or -6.9 M€2017) and the MET service provider (-14.3%, or -0.3 M€2017).

Terminal costs for the main ANSP at charging zone level

Significantly lower than planned terminal costs in real terms for LVNL in 2022 (-10.3%, or -6.9 M€2017) result from:
- Significantly lower staff costs (-10.3%), mainly due to the inflation index impact (+12.5 p.p.) since in nominal terms staff costs are in line with planned (-0.04%);
- Significantly lower other operating costs (-15.7%), mainly due to the inflation index impact (+12.5 p.p.), in nominal terms staff costs are -6.0% lower than planned (no driver information has been provided);
- Slightly lower depreciation (-1.7%),
- Significantly higher cost of capital (+57.6%), due to increased interest rate.

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

AUCU components (€/SU) – 2022
Components of the AUCU in 2022 €/SU
DUC 238.66
Inflation adjustment 22.83
Cost exempt from cost-sharing −2.18
Traffic risk sharing adjustment −9.93
Traffic adj. (costs not TRS) −0.64
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues −2.41
Application of lower unit rate 0.00
Total adjustments 7.67
AUCU 246.33
AUCU vs. DUC +3.2%
Cost exempt from cost sharing by item - 2022 €'000 €/SU
New and existing investments −226.0 −0.66
Competent authorities and qualified entities costs 0.0 0.00
Eurocontrol costs 0.0 0.00
Pension costs −628.0 −1.84
Interest on loans 111.0 0.33
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing −743.0 −2.18

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2022 (246.52 €) is +3.3% higher than the nominal DUC (238.66 €). The difference between these two figures (+7.86 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+22.83 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-2.18 €/SU);
- the deduction of the traffic risk sharing adjustments (-9.93 €/SU);
- the deduction of the traffic adjustment (-0.64 €/SU) for the costs not subject to traffic risk sharing; and
- the deduction of the other revenues (-2.22 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 12.9%.

Regulatory result (RR)

LVNL net gain on activity in the Netherlands terminal charging zone in the year 2022

LVNL reported a net gain of +10.6 M€, as a combination of a gain of +7.7 M€ arising from the cost sharing mechanism, with a gain of +2.9 M€ arising from the traffic risk sharing mechanism.

LVNL overall regulatory results (RR) for the terminal activity

LVNL has no return on equity, as its assets are entirely financed through debt, no ex-ante estimated surplus was embedded in the cost of capital provided in the PP for RP3. Therefore, ex-post, the overall RR is equal to the net gain from the terminal activity mentioned above (+10.6 M€) and corresponds to 12.9% of the en route revenues.