Cost-efficiency - Portugal

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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 69 38 NA NA
Determined costs 68 39 42 44
Difference costs 1 -1 NA NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 1.2% 1.3% 1.4%
Determined inflation index NA 103.6 104.9 106.4
Actual inflation rate NA 8.1% NA NA
Actual inflation index NA 110.7 NA NA
Difference inflation index (p.p.) NA +7.1 NA NA

AUC vs. DUC

In 2022, the terminal AUC was -18.0% (or -27.01 €2017) lower than the planned DUC. This results from the combination of significantly higher than planned TNSUs (+11.3%) and significantly lower than planned terminal costs in real terms (-8.7%, or -3.3 M€2017). It should be noted that actual inflation index in 2022 was +7.1 p.p. higher than planned.

Terminal service units

The difference between actual and planned TNSUs (+11.3%) falls outside 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 (NAV Portugal) retaining an amount of +1.5 M€2017.

Terminal costs by entity

Actual real terminal costs are -8.7% (-3.3 M€2017) lower than planned. This is the result of lower than planned costs for all the reporting entities: ANSP, NAV Portugal (-8.9%, or -3.2 M€2017), the MET service provider (-4.5%, or -0.1 M€2017) and the NSA (-6.8%, or -0.02 M€2017). It should be noted that, in nominal terms, the costs for the MET service provider were above the plan.

Terminal costs for the main ANSP at charging zone level

Lower than planned terminal costs in real terms for NAV Portugal in 2022 (-8.9%, or -3.2 M€2017) result from:
- Significantly lower staff costs (-9.4%) resulting from the performance of defined benefit pension plans;
- Significantly lower other operating costs (-6.9%) driven by savings on specialist services and travel;
- Lower depreciation (-4.4%); and,
- Significantly lower cost of capital (-9.5%) reflecting a significantly lower than planned asset base.

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

AUCU components (€/SU) – 2022
Components of the AUCU in 2022 €/SU
DUC 155.03
Inflation adjustment 8.58
Cost exempt from cost-sharing -7.82
Traffic risk sharing adjustment -9.18
Traffic adj. (costs not TRS) -0.78
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 -9.21
AUCU 145.82
AUCU vs. DUC -5.9%
Cost exempt from cost sharing by item - 2022 €'000 €/SU
New and existing investments -287.7 -1.03
Competent authorities and qualified entities costs -24.0 -0.09
Eurocontrol costs 0.0 0.00
Pension costs -1,882.5 -6.71
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -2,194.1 -7.82

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2022 (145.82 €) is -5.9% lower than the nominal DUC (155.03 €). The difference between these two figures (-9.21 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+8.58 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-7.82 €/SU);
- the deduction of the traffic risk sharing adjustments (-9.18 €/SU); and
- the deduction of the traffic adjustment (-0.78 €/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 8.5%.

Regulatory result (RR)

NAV Portugal net gain on activity in the Portugal terminal charging zone in the year 2022

NAV Portugal reported a net gain of +3.1 M€, reflecting a combination of a gain of +1.5 M€ arising from the cost sharing mechanism and a gain of +1.6 M€ arising from the traffic risk sharing mechanism.

NAV Portugal overall regulatory result (RR) for the terminal activity

Ex-post, the overall RR taking into account the net gain from the terminal activity mentioned above (+3.1 M€) and the actual RoE (+0.4 M€) amounts to +3.5 M€ (8.9% of the terminal revenues). The resulting ex-post rate of return on equity is 36.2%, which is significantly higher than the 4.2% planned in the PP.