Cost-efficiency - Czech Republic

Terminal charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 31 17 21 NA
Determined costs 32 17 20 21
Difference costs −1 −1 0 NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 2.0% 2.0% 2.0%
Determined inflation index NA 112.8 115 117.3
Actual inflation rate NA 14.8% 12.0% NA
Actual inflation index NA 128.2 143.6 NA
Difference inflation index (p.p.) NA +15.4 +28.6 NA

AUC vs. DUC

In 2023, the terminal AUC was -5.2% (or -328.91 CZK2017, -12.5 €2017) lower than the planned DUC. This results from the combination of significantly lower than planned terminal costs in real terms (-14.4%, or -70.0 MCZK2017, -2.7 M€2017) and significantly lower than planned TNSUs (-9.7%). It should be noted that actual inflation index in 2023 was +28.6 p.p. higher than planned.

Terminal service units

The difference between actual and planned TNSUs (-9.7%) 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 ANSP and the airspace users.

Terminal costs by entity

Actual real terminal costs are -14.4% (-2.7 M€2017) lower than planned. This is the result of lower costs for the main ANSP, ANS CR (-14.5%, or -2.6 M€2017), the MET service provider (-16.6%, or -0.1 M€2017) and the NSA (-3.5%, 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 ANS CR in 2023 (-14.5%, or -2.6 M€2017) result from:
- Lower staff costs (-4.7%), but higher costs in nominal terms (+19.0%), impacted by much higher-than-expected inflation rate;
- Significantly lower other operating costs (-36.3%), thanks to cost containment measures in the areas of repairs, travel expenses and software support;
- Significantly lower depreciation (-23.8%), reflecting deferred system upgrades and supplier delays in the DPS area, but also cash flow issues due to lower traffic levels leading to a reprioritisation of investment;
- Significantly lower cost of capital (-15.7%), as a result of “a gap in some investments and consequently lower asset base”.

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

AUCU components (€/SU) – 2023
Components of the AUCU in 2023 €/SU
DUC 289.29
Inflation adjustment 56.53
Cost exempt from cost-sharing −17.67
Traffic risk sharing adjustment 16.67
Traffic adj. (costs not TRS) 1.00
Finantial incentives 1.63
Modulation of charges 0.00
Cross-financing 0.00
Other revenues 0.00
Application of lower unit rate −31.43
Total adjustments 26.71
AUCU 316.01
AUCU vs. DUC +9.2%
Cost exempt from cost sharing by item - 2023 €'000 €/SU
New and existing investments −1,323.6 −18.98
Competent authorities and qualified entities costs −8.9 −0.13
Eurocontrol costs 0.0 0.00
Pension costs 100.4 1.44
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing −1,232.2 −17.67

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2023 (7 573.97 CZK or 316.01 €) is +9.2% higher than the nominal DUC (6 933.70 CZK or 289.29 €). The difference between these two figures (+640.27 CZK/SU or +26.71 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+1 354.78 CZK/SU or +56.53 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-423.49 CZK/SU or -17.67 €/SU);
- the addition of the traffic risk sharing adjustments (+399.50 CZK/SU or +16.67 €/SU);
- the addition of the traffic adjustment (+23.93 CZK/SU or +1.00 €/SU) for the costs not subject to traffic risk sharing;
- financial incentives (+38.97 CZK/SU or +1.63 €/SU); and
- application of a lower unit rate as foreseen in Art. 29(6) in year 2023 (-753.42 CZK/SU or -31.43 €/SU); and
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 12.8%.

Regulatory result (RR)

ANS CR net gain on activity in the Czech Republic terminal charging zone in the year 2023

ANS CR reported a net gain of +35.3 MCZK, as a combination of a gain of +54.8 MCZK arising from the cost sharing mechanism, with a loss of -22.3 MCZK arising from the traffic risk sharing mechanism and a gain of +2.7 MCZK relating to financial incentives.

ANS CR 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 (+35.3 MCZK) and the actual RoE (+29.9 MCZK) amounts to +65.1 MCZK (11.6% of the terminal revenues). The resulting ex-post rate of return on equity is 19.5%, which is higher than the 9.0% planned in the PP.