Cost-efficiency - Bulgaria
PRB monitoring
▪ The en route 2023 actual unit cost of Bulgaria was 22.82 €2017, -27% lower than the determined unit cost (31.41 €2017). Bulgaria does not have a terminal charging zone.
▪ The en route 2023 actual service units (4.7M) were +26% higher than the determined service units (3.7M).
▪ The en route 2023 actual total costs were -9.9 M€2017 (-8.5%) lower than determined. The gap was attributable to lower other operating costs (-8.2 M€2017, or -37%), mainly due to unpaid 10M BGN “alliance entry fee” (COOPANS or ITEC) which, if unpaid in 2024, will be reimbursed to users through the 2025 unit rate. Additionally, a much lower rate for the increase in energy prices, actual resources versus determined resources, and lower than determined external services costs contributed to overall lower operating costs.
▪ BULATSA spent 19 M€2017 in 2023 related to costs of investments, -7.0% lower than determined (20 M€2017). This difference arose from a reduction in fixed assets (-8.2 M€2017, or -15%) and a corresponding decline in the cost of capital (-1.3 M€2017, or -15%). The NSA explained that the difference is justified by the deduction of the liquidated damages received for two investment projects from the depreciation costs in 2023, which reduced the value of the related assets.
▪ The en route actual unit cost incurred by users in 2023 was 30.54€ (-10% below the 2023 DUC).
▪ The en route regulatory result for BULATSA amounted to +29 M€, or 21% of the 2023 revenue. This may indicate that the airspace users are charged for costs which have not materialised in 2023. The PRB will take into consideration the implementation of the RP3 performance plan when assessing the RP4 cost-efficiency targets.
En route charging zone
Unit cost (KPI#1)
| Actual and determined data |
| Total costs - nominal (M€) |
2020-2021 |
2022 |
2023 |
2024 |
| Actual costs |
200 |
116 |
132 |
NA |
| Determined costs |
205 |
115 |
126 |
129 |
| Difference costs |
−5 |
2 |
6 |
NA |
| Inflation assumptions |
2020-2021 |
2022 |
2023 |
2024 |
| Determined inflation rate |
NA |
2.0% |
2.0% |
2.0% |
| Determined inflation index |
NA |
109.6 |
111.8 |
114 |
| Actual inflation rate |
NA |
13.0% |
8.6% |
NA |
| Actual inflation index |
NA |
123.6 |
134.3 |
NA |
| Difference inflation index (p.p.) |
NA |
+14.1 |
+22.5 |
NA |
AUC vs. DUC
In 2023, the en route AUC was -27.3% (-16.79 BGN2017 or -8.59 €2017) lower than the planned DUC. This results from the combination of significantly higher than planned TSUs (+25.9%) and significantly lower than planned en route costs in real terms (-8.5%, -19.4 MBGN2017, or -9.9 M€2017). It should be noted that the actual inflation index in 2023 was +22.5 p.p. higher than planned.
En route service units
The difference between the 2023 actual and planned TSUs (+25.9%) falls outside the ±10% threshold foreseen in the traffic risk sharing mechanism. The resulting gain of additional en route revenues is therefore shared between the ANSP and the airspace users .
En route costs by entity
The 2023 actual real en route costs are -8.5% (-9.9 M€2017) lower than planned. This is the result of lower than planned costs for the main ANSP, BULATSA (-8.4%, or -9.0 M€2017) and the NSA/EUROCONTROL (-10.2%, or -0.9 M€2017).
En route costs for the main ANSP at charging zone level
The 2023 real en route actual costs for BULATSA are significantly lower than planned (-8.4%, or -9.0 M€2017), mainly due to a higher than planned inflation index (+22.5 p.p.) and resulting from:
- Lower than planned staff costs in real terms (-2.2%), but higher than planned in nominal terms (+17 5%), reported to be mainly due to “normalising levels of payment in line with traffic levels and in response to high inflation in Bulgaria (…)higher staff numbers as well as increase in social security costs (…)”
- Significantly lower than planned other operating costs in real terms (-47.8%), reported to be mainly due to “non-payment of an alliance entry fee of BGN 10 million (COOPANS or ITEC alliances) (….) the amount will be returned to users”
- Lower than planned depreciation costs (-1.2%)
- Higher than planned cost of capital (+2.2%).
Actual unit cost incurred by the users (AUCU) (PI#1)
| AUCU components (€/SU) – 2023 |
| Components of the AUCU in 2023 |
€/SU |
| DUC |
34.07 |
| Inflation adjustment |
4.02 |
| Cost exempt from cost-sharing |
−0.39 |
| Traffic risk sharing adjustment |
−5.16 |
| Traffic adj. (costs not TRS) |
−0.80 |
| Finantial incentives |
0.05 |
| Modulation of charges |
0.00 |
| Cross-financing |
0.00 |
| Other revenues |
−1.19 |
| Application of lower unit rate |
0.00 |
| Total adjustments |
−3.47 |
| AUCU |
30.60 |
| AUCU vs. DUC |
−10.2% |
| Cost exempt from cost sharing by item - 2023 |
€'000 |
€/SU |
| New and existing investments |
−1,432.7 |
−0.31 |
| Competent authorities and qualified entities costs |
−870.4 |
−0.19 |
| Eurocontrol costs |
0.7 |
0.00 |
| Pension costs |
493.0 |
0.11 |
| Interest on loans |
0.0 |
0.00 |
| Changes in law |
0.0 |
0.00 |
| Total cost exempt from cost risk sharing |
−1,809.4 |
−0.39 |
The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2023 (59.71 BGN or 30.54 €) is -10.3% lower than the nominal DUC (66.60 BGN or 34.07 €). The difference between these two figures (-6.89 BGN/SU or -3.52 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+7.86 BGN/SU or +4.02 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-0.76 BGN/SU or -0.39 €/SU);
- the deduction of the traffic risk sharing adjustments (-10.09 BGN/SU or -5.16 €/SU);
- the deduction of the traffic adjustment (-1.56 BGN/SU or -0.80 €/SU) for the costs not subject to traffic risk sharing; and
- the deduction of the other revenues (-2.34 BGN/SU or -1.19 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 19.6%.
BULATSA net gain on activity in the Bulgaria en route charging zone in the year 2023
BULATSA reported a net gain of +31.6 MBGN, as a combination of a gain of +22.0 MBGN arising from the cost sharing mechanism with a gain of +9.6 MBGN arising from the traffic risk sharing mechanism.
BULATSA 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 (+31.6 MBGN) and the actual RoE (+25.4 MBGN) amounts to +56.9 MBGN (20.7% of the en route revenues). The resulting ex-post rate of return on equity is 15.7%, which is higher than the 7.0% planned in the PP.