Cost-efficiency - Italy

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Terminal charging zone - Italy Zone 2

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 110 60 63 NA
Determined costs 111 61 64 66
Difference costs 0 -1 -1 NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 1.8% 1.2% 1.2%
Determined inflation index NA 105.3 106.6 107.9
Actual inflation rate NA 8.7% 5.9% NA
Actual inflation index NA 112.8 119.4 NA
Difference inflation index (p.p.) NA +7.4 +12.9 NA

AUC vs. DUC

In 2023, the terminal AUC was -13.8% (or -26.05 €2017) lower than the planned DUC. This results from the combination of significantly lower than planned terminal costs in real terms (-9.1%, or -5.5 M€2017) and significantly higher than planned TNSUs (+5.4%). It should be noted that actual inflation index in 2023 was +12.9 p.p. higher than planned.

Terminal service units

The difference between the 2023 actual and planned TNSUs (+5.4%) falls outside the ±2% dead band, but does not exceed the ±10% threshold foreseen in the traffic risk sharing mechanism. The resulting gain of additional terminal revenues is therefore shared between the ANSP and the airspace users.

Terminal costs by entity

The 2023 actual real terminal ANS costs are -9.1% (-5.5 M€2017) lower than planned for the TCZ2. This is the result of lower than planned costs for the main ANSP, ENAV (-9.1%, or -5.6 M€2017) and the NSA (-0.8%, or -0.003 M€2017).

Terminal costs for the main ANSP at charging zone level

The 2023 real actual terminal ANS costs are significantly lower than planned for ENAV TCZ2 (-9.1%, or -5.6 M€2017), mainly due to a higher than planned inflation index in 2023 and from:
- Significantly lower than planned staff costs (-9.5%), but slightly higher in nominal terms (+1.4%), reported to be mainly due to “hirings, and agreements with the trade unions with regard to working hours flexibility, recovery of inflation of approximately 5.2%, and increase in salary of 2% per annum over 2023-2025”,
- Significantly lower than planned other operating costs (-21.9%), without explanations,
- Significantly lower than planned depreciation (-10.6%), no explanation is provided beyond the fact that the difference will be reimbursed to users,
- Significantly higher than planned cost of capital (+28.7%), reported to be mainly due to “the increase in the average interest on debt from 1.86% to 5.00% (including the debt risk premium equal to 3.83%)”.

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

AUCU components (€/SU) – 2023
Components of the AUCU in 2023 €/SU
DUC 198.54
Inflation adjustment 16.88
Cost exempt from cost-sharing 1.18
Traffic risk sharing adjustment -4.21
Traffic adj. (costs not TRS) -0.72
Finantial incentives 1.87
Modulation of charges 0.00
Cross-financing 0.00
Other revenues 0.00
Application of lower unit rate 0.00
Total adjustments 15.00
AUCU 213.55
AUCU vs. DUC + 7.6%
Cost exempt from cost sharing by item - 2023 €'000 €/SU
New and existing investments -122.2 -0.36
Competent authorities and qualified entities costs -2.9 -0.01
Eurocontrol costs 0.0 0.00
Pension costs 0.0 0.00
Interest on loans 164.2 0.48
Changes in law 362.4 1.06
Total cost exempt from cost risk sharing 401.5 1.18

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2023 (213.48 €) is +7.5% higher than the nominal DUC (198.54 €). The difference between these two figures (+14.94 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+16.88 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (+1.11 €/SU);
- the deduction of the traffic risk sharing adjustments (-4.21 €/SU);
- the deduction of the traffic adjustment (-0.72 €/SU) for the costs not subject to traffic risk sharing; and
- financial incentives (+1.87 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 19.5%.

Regulatory result (RR)

ENAV net gain on activity in the Italy terminal charging zone 2 in the year 2023

ENAV reported a net gain of +9.5 M€, as a combination of a gain of +7.0 M€ arising from the cost sharing mechanism, with a gain of +1.8 M€ arising from the traffic risk sharing mechanism and a gain of +0.6 M€ relating to financial incentives.

ENAV 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 above mentioned (+9.5 M€) and the actual RoE (+4.7 M€) amounts to +14.1 M€ (19.6% of the terminal revenues in TCZ2). The resulting ex-post rate of return on equity is 14.9%, which is higher than the 4.9% planned in the PP.