Cost-efficiency - Estonia
PRB monitoring
▪ The en route 2023 actual unit cost of Estonia was 48.69 €2017, +59% higher than the determined unit cost (30.57 €2017). The terminal 2023 actual unit cost was 155.89 €2017, +24% higher than the determined unit cost (125.37 €2017).
▪ The en route 2023 actual service units (0.4M) were -48% lower than the determined service units (0.9K) mainly due to shifted traffic flows caused by the Russia’s war of aggression against Ukraine.
▪ In 2023, the en route actual total costs were -4.7 M€2017 (-18%) lower than determined. The main contributor was the difference in staff costs (-2.3 M€2017, or -17%). However, in nominal terms, the actual staff costs show a slight gap of +1.6% compared to the determined figures.
▪ EANS spent 3.7 M€2017 in 2023 related to costs of investments for both en route and terminal charging zones, which is -28% less than determined. This reduction was largely due to a gap in depreciation costs (-1.2 M€2017, -32%) stemming from delays in the implementation dates of investments.
▪ The en route actual unit cost incurred by users in 2023 was 70.08€ (+114% above the 2023 DUC), while the terminal actual unit cost incurred by users was 135.95€ (+1.0% 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 (+0.4 M€).
▪ The en route regulatory result for EANS amounted to +5.2 M€, or 22% 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 |
53 |
26 |
27 |
NA |
| Determined costs |
54 |
27 |
28 |
30 |
| Difference costs |
0 |
−1 |
−2 |
NA |
| Inflation assumptions |
2020-2021 |
2022 |
2023 |
2024 |
| Determined inflation rate |
NA |
2.5% |
2.1% |
1.9% |
| Determined inflation index |
NA |
110.4 |
112.7 |
114.8 |
| Actual inflation rate |
NA |
19.4% |
9.1% |
NA |
| Actual inflation index |
NA |
132 |
144 |
NA |
| Difference inflation index (p.p.) |
NA |
+21.6 |
+31.3 |
NA |
AUC vs. DUC
In 2023, the en route AUC was +59.3% (or +18.12 €2017) higher than the planned DUC. This results from the combination of significantly lower than planned TSUs (-48.4%) and significantly lower than planned en route costs in real terms (-17.9%, or -4.7 M€2017). It should be noted that actual inflation index in 2023 was +31.3 p.p. higher than planned.
En route service units
The difference between actual and planned TSUs (-48.4%) 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 -17.9% (-4.7 M€2017) lower than planned. This is the result of lower costs for the main ANSP, EANS (-28.0%, or -5.6 M€2017) and higher costs for the NSA/EUROCONTROL (+13.1%, or +0.9 M€2017).
En route costs for the main ANSP at charging zone level
Significantly lower than planned en route costs in real terms for EANS in 2023 (-28.0%, or -5.6 M€2017) result from:
- Significantly lower staff costs (-21.7%) in real terms due to the inflation index impact (+31.3 p.p.) since, in nominal terms, staff costs are in line with the plan (+0.03%).
- Significantly lower other operating costs (-31.0%) reflecting the impact of inflation index but also “extensive cost-cutting measures to reduce losses. Travelling expenses, equipment maintenance costs and training expenses were the main items for savings”,
- Significantly lower depreciation (-42.0%), reflecting “changes in actual investment costs of new investments due to a delayed/postponed implementation”,
- Significantly lower cost of capital (-36.9%) reflecting the use of lower than planned share of financing through equity.
Actual unit cost incurred by the users (AUCU) (PI#1)
| AUCU components (€/SU) – 2023 |
| Components of the AUCU in 2023 |
€/SU |
| DUC |
32.75 |
| Inflation adjustment |
10.44 |
| Cost exempt from cost-sharing |
−1.70 |
| Traffic risk sharing adjustment |
21.25 |
| Traffic adj. (costs not TRS) |
7.37 |
| Finantial incentives |
0.00 |
| Modulation of charges |
0.00 |
| Cross-financing |
0.00 |
| Other revenues |
−0.03 |
| Application of lower unit rate |
0.00 |
| Total adjustments |
37.33 |
| AUCU |
70.08 |
| AUCU vs. DUC |
+114.0% |
| Cost exempt from cost sharing by item - 2023 |
€'000 |
€/SU |
| New and existing investments |
−1,688.9 |
−3.78 |
| Competent authorities and qualified entities costs |
838.8 |
1.88 |
| Eurocontrol costs |
18.9 |
0.04 |
| Pension costs |
71.6 |
0.16 |
| Interest on loans |
0.0 |
0.00 |
| Changes in law |
0.0 |
0.00 |
| Total cost exempt from cost risk sharing |
−759.6 |
−1.70 |
The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2023 (70.08 €) is +114.0% higher than the nominal DUC (32.75 €). The difference between these two figures (+37.33 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+10.44 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-1.70 €/SU);
- the addition of the traffic risk sharing adjustments (+21.25 €/SU);
- the addition of the traffic adjustment (+7.37 €/SU) for the costs not subject to traffic risk sharing; and
- the deduction of the other revenues (-0.03 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 16.8%.
EANS net gain on activity in the Estonia en route charging zone in the year 2023
EANS reported a net gain of +4.6 M€, as a combination of a gain of +5.5 M€ arising from the cost sharing mechanism, with a loss of -0.9 M€ arising from the traffic risk sharing mechanism.
EANS 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 (+4.6 M€) and the actual RoE (+0.7 M€) amounts to +5.2 M€ (21.9% of the en route revenues). The resulting ex-post rate of return on equity is 57.6%, which is higher than the 7.3% planned in the PP.