Cost-efficiency - Latvia
PRB monitoring
▪ The en route 2023 actual unit cost of Latvia was 38.45 €2017, +8.0% higher than the determined unit cost (35.62 €2017). The terminal 2023 actual unit cost was 152.45 €2017, +16% higher than the determined unit cost (131.92 €2017).
▪ The en route 2023 actual service units (0.47M) were -15% lower than the determined service units (0.55M), mainly due to shifted traffic flows caused by the Russia’s war of aggression against Ukraine.
▪ The en route 2023 actual total costs were -1.6 M€2017 (-8.2%) lower than determined. The reduction in total cost was due to the lower staff costs (-1.3 M€2017, or -12%) which was a result of a reduction in staff numbers driven by lower than anticipated traffic volumes. In addition, other operating costs were lower than planned (-0.6 M€2017 or -13%), largely attributable to the MET provider LVĢMC, stemming from the cancellation and deferral of planned acquisitions.
▪ The ANSPs spent 6.7 M€2017 in 2023 related to costs of investments for both en route and terminal charging zones, -2.4% less than determined (6.9 M€2017). Although there was a difference in depreciation costs (+0.1 M€2017 or +2.2%) due to the commissioning of several assets that had been delayed since 2020, the cost of capital showed a gap (-0.3 M€2017 or -15%) primarily due to a significant reduction in net current assets (-2.1 M€2017 or -85%). However, the NSA did not provide a detailed explanation for this substantial reduction in net current assets.
▪ The en route actual unit cost incurred by users in 2023 was 50.65€ (+22% above the 2023 DUC), while the terminal actual unit cost incurred by users was 156.13€ (+4.6% above the 2023 DUC). The difference between the AUCU and the DUC for en route charging zone is strongly affected by the difference between the determined and actual SUs.
▪ The en route regulatory result for LGS amounted to +2.3 M€, or 11% 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 | 38 | 20 | 22 | NA |
| Determined costs | 40 | 20 | 23 | 23 |
| Difference costs | −2 | 0 | 0 | NA |
| Inflation assumptions | 2020-2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Determined inflation rate | NA | 10.0% | 3.9% | 3.1% |
| Determined inflation index | NA | 119.7 | 124.3 | 128.1 |
| Actual inflation rate | NA | 17.2% | 9.1% | NA |
| Actual inflation index | NA | 127.5 | 139.2 | NA |
| Difference inflation index (p.p.) | NA | +7.8 | +14.8 | NA |
Actual unit cost incurred by the users (AUCU) (PI#1)
| AUCU components (€/SU) – 2023 | |
| Components of the AUCU in 2023 | €/SU |
|---|---|
| DUC | 41.44 |
| Inflation adjustment | 4.17 |
| Cost exempt from cost-sharing | −0.13 |
| Traffic risk sharing adjustment | 4.33 |
| Traffic adj. (costs not TRS) | 1.18 |
| Finantial incentives | 0.00 |
| Modulation of charges | 0.00 |
| Cross-financing | 0.00 |
| Other revenues | −0.33 |
| Application of lower unit rate | 0.00 |
| Total adjustments | 9.22 |
| AUCU | 50.65 |
| AUCU vs. DUC | +22.2% |
| Cost exempt from cost sharing by item - 2023 | €'000 | €/SU |
|---|---|---|
| New and existing investments | 95.6 | 0.21 |
| Competent authorities and qualified entities costs | −11.9 | −0.03 |
| Eurocontrol costs | −80.8 | −0.17 |
| Pension costs | −63.5 | −0.14 |
| Interest on loans | 0.0 | 0.00 |
| Changes in law | 0.0 | 0.00 |
| Total cost exempt from cost risk sharing | −60.6 | −0.13 |