Cost-efficiency - France

Terminal charging zone - France Zone 2

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 392 194 198 NA
Determined costs 382 190 191 192
Difference costs 10 4 7 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 terminal AUC was +2.9% (or +9.83 €2017) higher than the planned DUC. This results from the combination of significantly lower than planned TNSUs (-7.6%) and lower than planned terminal costs in real terms (-4.9%, or -8.8 M€2017). It should be noted that actual inflation index in 2023 was +11.1 p.p. higher than planned.

Terminal service units

The difference between actual and planned TNSUs (-7.6%) 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 -4.9% (-8.8 M€2017) lower than planned. This is the result of lower costs for the main ANSP, DSNA (-4.2%, or -6.8 M€2017), the MET service provider (-12.8%, or -1.9 M€2017) and the NSA (-3.0%, or 0.03 M€2017).

Terminal costs for the main ANSP at charging zone level

Lower than planned terminal costs in real terms for DSNA in 2023 (-4.2%, or -6.8 M€2017) result from:
- Significantly lower staff costs (-5.8%), mainly due to the inflation index impact (+11.1 p.p.) since in nominal terms the costs are higher than planned by +3.9%, “due to the payment of measures implemented after covid crisis in 2022”;
- Slightly lower other operating costs (-1.1%), due to the inflation index impact (+11.1 p.p.) since in nominal terms the costs are higher than planned by +9.1%, due to the increase of energy prices and an increase of project-related OPEX costs (see below);
- Significantly lower depreciation (-5.1%),“mainly in relation with the delay of new Towers projects and the transfer of part of the investment costs to project-related OPEX costs”;
- Significantly higher cost of capital (+14.1%), mainly due to higher asset base and higher interest on debt; and,
- Lower deduction for VFR exempted flights (-4.8%).
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 361.30
Inflation adjustment 35.00
Cost exempt from cost-sharing 1.08
Traffic risk sharing adjustment 13.84
Traffic adj. (costs not TRS) 2.65
Finantial incentives −1.41
Modulation of charges 0.00
Cross-financing −89.48
Other revenues −61.23
Application of lower unit rate 0.00
Total adjustments −99.55
AUCU 261.74
AUCU vs. DUC −27.6%
Cost exempt from cost sharing by item - 2023 €'000 €/SU
New and existing investments 200.7 0.41
Competent authorities and qualified entities costs −31.9 −0.07
Eurocontrol costs 0.0 0.00
Pension costs 0.0 0.00
Interest on loans 358.0 0.73
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing 526.8 1.08

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2023 (261.74 €) is -27.6% lower than the nominal DUC (361.30 €). The difference between these two figures (-99.55 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+35.00 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (+1.08 €/SU);
- the addition of the traffic risk sharing adjustments (+13.84 €/SU);
- the addition of the traffic adjustment (+2.65 €/SU) for the costs not subject to traffic risk sharing;
- financial incentives (-1.41 €/SU);
- cross-financing (-89.48 €/SU); and
- the deduction of the other revenues (-61.23 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 5.0%.

Regulatory result (RR)

DSNA net gain on activity in the France terminal charging zone 2 in the year 2023

DSNA reported a net gain of +1.5 M€, as a combination of a gain of +8.6 M€ arising from the cost sharing mechanism, with a loss of -6.4 M€ arising from the traffic risk sharing mechanism and a loss of -0.7 M€ relating to financial incentives.

DSNA overall regulatory results (RR) for the terminal charging zone 2 activity

Ex-post, the overall RR taking into account the net gain from the terminal activity mentioned above (+1.5 M€) and the actual RoE (+4.0 M€) amounts to +5.5 M€ (3.0% of the terminal revenues). The resulting ex-post rate of return on equity is 18.9%, which is higher than the 13.7% planned in the PP.