Cost-efficiency - France

PRB monitoring

▪ The en route 2023 actual unit cost of France was 59.30 €2017, -4.5% lower than the determined unit cost (62.09 €2017). The terminal zone 1 2023 actual unit cost was 87.94 €2017, -14% lower than the determined unit cost (102.21 €2017), while the terminal zone 2 2023 actual unit cost was 348.64 €2017, +2.9% higher than the determined unit cost (338.81 €2017).

▪ The en route 2023 actual service units (21.1M) were +0.3% higher than the determined service units (21.0M).

▪ In 2023, the en route actual total costs were -55 M€2017 lower (-4.2%) than determined, mainly due to a reduction in staff cost (-49 M€2017, or -6.8%). However, in nominal terms, the actual staff costs show an increase of +2.8% compared to the determined figures. Additionally, France registered lower depreciation costs (-12 M€2017, or -7.0%), mainly due to postponement of investments.

▪ DSNA spent 220 M€2017 in 2023 related to costs of investments for both en route and terminal charging zones, -5.8% lower than determined (233 M€2017). The primary reasons for this reduction were associated with the postponement of a major project’s commissioning, delays in projects from previous years, and the reclassification of some investment costs to project-related OPEX costs given specific public accounting rules of the French State.

▪ The en route actual unit cost incurred by users in 2023 was 69.11€ (+5.1% above the 2023 DUC), while the terminal zone 1 actual unit cost incurred by users was 174.77€ (+62% above the 2023 DUC), and 261.74€ (-28% below the 2023 DUC) for terminal zone 2. The difference between the AUCU and the DUC in terminal charging zones is primarily attributed to the cross-financing adjustment that transferred 44 M€ from terminal zone 2 to terminal zone 1.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 2,650 1,355 1,429 NA
Determined costs 2,668 1,357 1,382 1,407
Difference costs −18 −1 47 NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 1.2% 1.3% 1.4%
Determined inflation index NA 106.3 107.7 109.3
Actual inflation rate NA 5.9% 5.7% NA
Actual inflation index NA 112.4 118.8 NA
Difference inflation index (p.p.) NA +6.1 +11.1 NA

AUC vs. DUC

In 2023, the en route AUC was -4.5% (or -2.79 €2017) lower than the planned DUC. This results from the combination of lower than planned en route costs in real terms (-4.2%, or -54.7 M€2017) and slightly higher than planned TSUs (+0.3%). It should be noted that actual inflation index in 2023 was +11.1 p.p. higher than planned.

En route service units

The difference between actual and planned TSUs (+0.3%) falls inside the ±2% dead band. Hence gain of additional en route revenues is kept by the ANSPs .

En route costs by entity

Actual real en route costs are -4.2% (-54.7 M€2017) lower than planned. This is the result of lower costs for the main ANSP, DSNA (-4.8%, or -56.0 M€2017) and the MET service provider (-8.1%, or -5.3 M€2017), while NSA/EUROCONTROL costs are higher (+7.8%, or +6.6 M€2017) than planned.

En route costs for the main ANSP at charging zone level

Lower than planned en route costs in real terms for DSNA in 2023 (-4.8%, or -56.0 M€2017) result from:
- Significantly lower staff costs (-6.3%), mainly due to the inflation index impact (+11.1 p.p.) since in nominal terms the costs are higher than planned by +3.4%, “due to the payment of measures implemented after covid crisis in 2022”;
- Slightly lower other operating costs (-0.9%), mainly due to the inflation index impact (+11.1 p.p.) since in nominal terms the costs are higher than planned by +9.3%, due to the increase of energy prices and an increase of project related OPEX costs (see below);
- Significantly lower depreciation (-7.7%), mainly in relation with the postponement of a major project’s commissioning, projects delays in previous years, and the transfer of some investment costs to project-related OPEX costs;
- Slightly higher cost of capital (+0.2%); and,
- Significantly lower deduction for VFR exempted flights (-15.0%).
Note: It is understood that DSNA operating costs include costs of investments that are not capitalised (T3 TECH).

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

AUCU components (€/SU) – 2023
Components of the AUCU in 2023 €/SU
DUC 65.75
Inflation adjustment 5.25
Cost exempt from cost-sharing 0.26
Traffic risk sharing adjustment 0.00
Traffic adj. (costs not TRS) −0.02
Finantial incentives −0.29
Modulation of charges 0.00
Cross-financing 0.00
Other revenues −1.83
Application of lower unit rate 0.00
Total adjustments 3.36
AUCU 69.11
AUCU vs. DUC +5.1%
Cost exempt from cost sharing by item - 2023 €'000 €/SU
New and existing investments −4,713.4 −0.22
Competent authorities and qualified entities costs −1,104.0 −0.05
Eurocontrol costs 7,679.0 0.36
Pension costs 0.0 0.00
Interest on loans 3,547.6 0.17
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing 5,409.3 0.26

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2023 (69.11 €) is +5.1% higher than the nominal DUC (65.75 €). The difference between these two figures (+3.36 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+5.25 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (+0.26 €/SU);
- the deduction of the traffic adjustment (-0.02 €/SU) for the costs not subject to traffic risk sharing;
- financial incentives (-0.29 €/SU); and
- the deduction of the other revenues (-1.83 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 6.7%.

Regulatory result (RR)

DSNA net gain on activity in the France en route charging zone in the year 2023

DSNA reported a net gain of +60.1 M€, as a combination of a gain of +62.3 M€ arising from the cost sharing mechanism, with a gain of +4.0 M€ arising from the traffic risk sharing mechanism and a loss of -6.1 M€ relating to financial incentives.

DSNA 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 (+60.1 M€) and the actual RoE (+32.7 M€) amounts to +92.8 M€ (7.0% of the en route revenues). The resulting ex-post rate of return on equity is 39.0%, which is higher than the 13.7% planned in the PP.