Cost-efficiency - Denmark
PRB monitoring
▪ The en route 2023 actual unit cost of Denmark was 68.15 €2017, +20% higher than the determined unit cost (56.92 €2017). The terminal 2023 actual unit cost was 154.36 €2017, +4.1% higher than the determined unit cost (148.24 €2017).
▪ The en route 2023 actual service units (1.5M) were -12% lower than the determined service units (1.7M), mainly due to shifted traffic flows caused by the Russia’s war of aggression against Ukraine.
▪ The en route 2023 actual total costs were +4.9 M€2017 (+5.2%) higher than the determined. This was mainly due to higher staff costs (+5.5 M€2017, or +11%). The NSA attributed this gap to several factors: A high number of additional shifts, the limited effects of the determined cost-saving strategy, and the execution of an agreement with the ATCO union. The NSA did not provide sufficient information on the reason for these additional shifts, which contrasts with the significant reduction in service units compared to the plan.
▪ The PRB highlights that the pension costs are +13% higher than planned. The NSA decided not to adjust this amount via cost-exempt mechanism.
▪ NAVIAIR spent 20.1 M€2017 in 2023 related to costs of investments for both en route and terminal charging zones, -3.5% less than determined (19.7 M€2017), due to fewer and delayed investments.
▪ The en route actual unit cost incurred by users in 2023 was 68.38€ (+16% above the 2023 DUC), while the terminal actual unit cost incurred by users was 171.47€ (+11% above the 2023 DUC). The difference between the AUCU and the DUC for the en route charging zone is primarily attributed to lower than planned SUs, while for the terminal charging zone, it is mainly due to the inflation adjustment (+19.7 M€).
En route charging zone
Unit cost (KPI#1)
| Actual and determined data |
| Total costs - nominal (M€) |
2020-2021 |
2022 |
2023 |
2024 |
| Actual costs |
190 |
100 |
111 |
NA |
| Determined costs |
190 |
96 |
98 |
99 |
| Difference costs |
0 |
4 |
12 |
NA |
| Inflation assumptions |
2020-2021 |
2022 |
2023 |
2024 |
| Determined inflation rate |
NA |
1.4% |
1.5% |
1.6% |
| Determined inflation index |
NA |
104.2 |
105.7 |
107.4 |
| Actual inflation rate |
NA |
8.5% |
3.4% |
NA |
| Actual inflation index |
NA |
112.5 |
116.3 |
NA |
| Difference inflation index (p.p.) |
NA |
+8.2 |
+10.5 |
NA |
AUC vs. DUC
In 2023, the en route AUC was +19.7% (or +83.56 DKK2017, +11.24 €2017) higher than the planned DUC. This results from the combination of significantly lower than planned TSUs (-12.2%) and significantly higher than planned en route costs in real terms (+5.2%, or +36.3 MDKK2017, +4.9 M€2017). It should be noted that actual inflation index in 2023 was +10.5 p.p. higher than planned.
En route service units
The difference between actual and planned TSUs (-12.2%) 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.
En route costs by entity
Actual real en route costs are +5.2% (+4.9 M€2017) higher than planned. This is the result of higher costs for the main ANSP, NAVIAIR (+6.4%, or +5.1 M€2017) and the NSA/EUROCONTROL (+5.8%, or +0.6 M€2017) and lower costs for the MET service provider (-15.6%, or -0.8 M€2017).
En route costs for the main ANSP at charging zone level
Significantly higher than planned en route costs in real terms for NAVIAIR in 2023 (+6.4%, or +5.1 M€2017) result from:
- Significantly higher staff costs (+9.4%), reflecting “high level of extra shifts, and not realised effects from the implementation of the Strategy”.
- Lower other operating costs (-4.0%) in real terms due to the inflation index impact (+10.5 p.p.). In nominal terms other operating costs are above the plan (+5.6%), which result from higher energy and training costs.
- Significantly lower depreciation (-6.0%), reflecting “fewer and delayed investments and later deployment”;
- Significantly higher cost of capital (+18.1%), resulting from “higher interest rate on loan and increased asset base”;
- No deduction through exceptional costs which was included in the PP to reduce the level of en-route cost-base.
Actual unit cost incurred by the users (AUCU) (PI#1)
| AUCU components (€/SU) – 2023 |
| Components of the AUCU in 2023 |
€/SU |
| DUC |
59.04 |
| Inflation adjustment |
4.65 |
| Cost exempt from cost-sharing |
−0.15 |
| Traffic risk sharing adjustment |
4.40 |
| Traffic adj. (costs not TRS) |
1.29 |
| Finantial incentives |
0.00 |
| Modulation of charges |
0.00 |
| Cross-financing |
0.00 |
| Other revenues |
−0.86 |
| Application of lower unit rate |
0.00 |
| Total adjustments |
9.33 |
| AUCU |
68.38 |
| AUCU vs. DUC |
+15.8% |
| Cost exempt from cost sharing by item - 2023 |
€'000 |
€/SU |
| New and existing investments |
−806.8 |
−0.55 |
| Competent authorities and qualified entities costs |
−239.9 |
−0.16 |
| Eurocontrol costs |
826.2 |
0.57 |
| Pension costs |
0.0 |
0.00 |
| Interest on loans |
0.0 |
0.00 |
| Changes in law |
0.0 |
0.00 |
| Total cost exempt from cost risk sharing |
−220.5 |
−0.15 |
The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2023 (509.33 DKK or 68.38 €) is +15.8% higher than the nominal DUC (439.81 DKK or 59.04 €). The difference between these two figures (+69.52 DKK/SU or +9.33 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+34.66 DKK/SU or +4.65 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-1.13 DKK/SU or -0.15 €/SU);
- the addition of the traffic risk sharing adjustments (+32.79 DKK/SU or +4.40 €/SU);
- the addition of the traffic adjustment (+9.58 DKK/SU or +1.29 €/SU) for the costs not subject to traffic risk sharing; and
- the deduction of the other revenues (-6.38 DKK/SU or -0.86 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is -4.7%.
NAVIAIR net gain on activity in the Denmark en route charging zone in the year 2023
NAVIAIR reported a net loss of -74.9 MDKK, as a combination of a loss of -47.8 MDKK arising from the cost sharing mechanism, with a loss of -27.1 MDKK arising from the traffic risk sharing mechanism.
NAVIAIR overall regulatory results (RR) for the en route activity
Ex-post, the overall RR taking into account the net loss from the en route activity mentioned above (-74.9 MDKK) and the actual RoE (+35.0 MDKK) amounts to -39.9 MDKK (-6.3% of the en route revenues). The resulting ex-post rate of return on equity is -5.7%.