Cost-efficiency - Poland

PRB monitoring

▪ The en route 2022 actual unit cost of Poland was 54.12 €2017, 15% higher than the determined unit cost (47.05 €2017). The terminal zone 1 actual unit cost was 119.14 €2017, in line with the determined unit cost (118.48 €2017), while the terminal zone 2 actual unit cost was 228.41 €2017, 11% lower than the determined unit cost (255.46 €2017).

▪ The en route 2022 actual service units (3,129K) were 22% lower than the determined service units (3,991K).

▪ In 2022, the en route actual total costs were 18 M€2017 (-9.8%) lower than determined. Staff costs decreased (-9.1 M€2017, or -8.6%) as a result of higher inflation than expected, while other operating costs decreased (-8.9 M€2017, or -19%) mainly due to cost containment measures in response to Russia’s war of aggression against Ukraine.

▪ Poland presented a deviation from the criteria to achieve capacity targets, which was considered justified. Considering that costs are significantly lower and that the 2022 en route capacity targets have not been achieved, the situation raises serious concern. The PRB invites the NSA to analyse the discrepancies and identify their reasons and the Member State to rectify the situation to ensure that the additional means granted through the capacity deviation are used to address the capacity issues.

▪ PANSA spent 45 M€2017 in 2022 related to costs of investments, in line with the plan. However, due to COVID-19 and Russia’s war of aggression against Ukraine, some projects had to be adjusted (postponed, change of scope, and change of value). The slow up in investments has been offset by the increase in cost of capital due to higher WACC than planned.

▪ The en route actual unit cost incurred by users in 2022 was 61.12€, while the terminal zone 1 actual unit cost incurred by users was 133.20€ and 258.28€ for terminal zone 2.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 330 202 NA NA
Determined costs 377 206 215 223
Difference costs −47 −4 NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 2.5% 2.5% 2.5%
Determined inflation index NA 113.4 116.2 119.1
Actual inflation rate NA 13.2% NA NA
Actual inflation index NA 127.6 NA NA
Difference inflation index (p.p.) NA +14.2 NA NA

AUC vs. DUC

In 2022, the en route AUC was +15.0% (or +30.09 PLN2017, +7.07 €2017) higher than the planned DUC. This results from the combination of significantly lower than planned TSUs (-21.6%) and significantly lower than planned en route costs in real terms (-9.8%, or -78.4 MPLN2017, -18.4 M€2017). It should be noted that actual inflation index in 2022 was +14.2 p.p. higher than planned.

En route service units

The difference between actual and planned TSUs (-21.6%) 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 (PANSA) bearing a loss of -6.3 M€2017.

En route costs by entity

Actual real en route costs are -9.8% (-18.4 M€2017) lower than planned. This is the result of lower costs for the main ANSP, PANSA (-11.2%, or -18.5 M€2017) and the MET service providers (-8.7%, or -0.6 M€2017) and higher costs for the NSA/EUROCONTROL (+4.6%, or +0.7 M€2017).

En route costs for the main ANSP at charging zone level

Significantly lower than planned en route costs in real terms for PANSA in 2022 (-11.2%, or -18.5 M€2017) result from:
- Significantly lower staff costs (-8.7%), mainly due to inflation index impact (+14.2 p.p.) since in nominal terms staff costs are higher than planned by 2.7%.
- Significantly lower other operating costs (-33.2%), as a consequence of lower traffic and the review of PANSA plan resulting in one-off cost containment initiative and postponement of some activities. This result is also impacted by higher actual inflation index (+14.2 p.p.).
- Lower depreciation (-4.5%),due to the lower execution of investment plan.
- Higher cost of capital (+4.1%), resulting from higher WACC due to the higher interest rate in 2022.
- Significantly lower deduction for VFR exempted flights (-15.6%).

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

AUCU components (€/SU) – 2022
Components of the AUCU in 2022 €/SU
DUC 46.89
Inflation adjustment 5.60
Cost exempt from cost-sharing 0.05
Traffic risk sharing adjustment 9.13
Traffic adj. (costs not TRS) 1.46
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues −1.94
Application of lower unit rate 0.00
Total adjustments 14.29
AUCU 61.18
AUCU vs. DUC +30.5%
Cost exempt from cost sharing by item - 2022 €'000 €/SU
New and existing investments −838.5 −0.27
Competent authorities and qualified entities costs 1.2 0.00
Eurocontrol costs 783.3 0.25
Pension costs 0.0 0.00
Interest on loans 201.8 0.06
Changes in law 0.5 0.00
Total cost exempt from cost risk sharing 148.2 0.05

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2022 (286.06 PLN or 61.12 €) is +30.3% higher than the nominal DUC (219.46 PLN or 46.89 €). The difference between these two figures (+66.60 PLN/SU or +14.23 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+26.18 PLN/SU or +5.60 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-0.04 PLN/SU or -0.01 €/SU);
- the addition of the traffic risk sharing adjustments (+42.72 PLN/SU or +9.13 €/SU);
- the addition of the traffic adjustment (+6.81 PLN/SU or +1.46 €/SU) for the costs not subject to traffic risk sharing; and
- the deduction of the other revenues (-9.08 PLN/SU or -1.94 €/SU).
The share of regulatory result in the AUCU (befored the deduction of other revenues) is 12.0%.

Regulatory result (RR)

PANSA net gain on activity in the Poland en route charging zone in the year 2022

PANSA reported a net gain of +62.6 MPLN, as a combination of a gain of +96.7 MPLN arising from the cost sharing mechanism, with a loss of -34.2 MPLN arising from the traffic risk sharing mechanism.

PANSA 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 (+62.6 MPLN) and the actual RoE (+44.8 MPLN) amounts to +107.3 MPLN (13.1% of the en route revenues). The resulting ex-post rate of return on equity is 11.6%, which is higher than the 4.9% planned in the PP.