Cost-efficiency - Luxembourg

Download Report

Terminal charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 30 15 17 NA
Determined costs 31 15 15 16
Difference costs -1 0 1 NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 5.6% 2.6% 3.1%
Determined inflation index NA 113.3 119.1 122.8
Actual inflation rate NA 8.2% 2.9% NA
Actual inflation index NA 116.1 119.4 NA
Difference inflation index (p.p.) NA +2.8 +0.3 NA

AUC vs. DUC

In 2023, the terminal AUC was +13.9% (or +32.1 €2017) higher than the planned DUC. This results from the combination of significantly higher than planned terminal costs in real terms (+7.3%, or +1.0 M€2017) and significantly lower than planned TNSUs (-5.8%).

Terminal service units

The difference between actual and planned TNSUs (-5.8%) 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, with the ANSP (ANA) bearing a loss of -0.4 M€2017.

Terminal costs by entity

Actual real terminal costs are +7.3% (+1.0 M€2017) higher than planned. This is the result of higher costs for the main ANSP, ANA (+7.3%, or +1.0 M€2017).

Terminal costs for the main ANSP at charging zone level

Significantly higher than planned terminal costs in real terms for ANA in 2023 (+7.3%, or +1.0 M€2017) result from:
- Significantly higher staff costs (+11.3%), due to higher salaries and more employees: Luxembourg’s legal cost-of-living adjustments led to a 5.1% average salary increase in 2023. ANA’s state-employed staff received a 1.49% raise based on career progression. CNS department grew from 14 to 20 employees by year-end 2023, with an average headcount of 15.3. CERT department expanded from 12 to 19.5 FTEs, with an average headcount of 15.9, due to regulatory and workload increases;
- Significantly higher other operating costs (+17.2%), mainly due to support contracts for integrating and training new ATSEPs, expected to decrease by 2025. Additionally, there are costs for analysing ESASSP reports, which will significantly drop as trained ATSEPs take over. Training costs have also risen due to new ATSEP recruitment; and,
- Significantly lower depreciation (-25.9%), mainly due to a revised investment plan, leading to project cancellations and postponements. The two main projects delayed are the surveillance chain upgrade and the replacement of the WAN and LAN infrastructure.

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

AUCU components (€/SU) – 2023
Components of the AUCU in 2023 €/SU
DUC 269.71
Inflation adjustment 0.65
Cost exempt from cost-sharing -9.99
Traffic risk sharing adjustment 6.72
Traffic adj. (costs not TRS) 1.85
Finantial incentives 0.00
Modulation of charges 9.18
Cross-financing 0.00
Other revenues -41.14
Application of lower unit rate 0.00
Total adjustments -32.74
AUCU 236.97
AUCU vs. DUC -12.1%
Cost exempt from cost sharing by item - 2023 €'000 €/SU
New and existing investments -484.4 -9.07
Competent authorities and qualified entities costs 0.0 0.00
Eurocontrol costs 0.0 0.00
Pension costs -49.5 -0.93
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -533.8 -9.99

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2023 (236.97 €) is -12.1% lower than the nominal DUC (269.71 €). The difference between these two figures (-32.74 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+0.65 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-9.99 €/SU);
- the addition of the traffic risk sharing adjustments (+6.72 €/SU);
- the addition of the traffic adjustment (+1.85 €/SU) for the costs not subject to traffic risk sharing;
- the modulation of charges (+9.18 €/SU); and
- the deduction of the other revenues (-41.14 €/SU).
The share of the regulatory result in the AUCU (before the deduction of other revenues) is -14.8%.

Note that the cost exempt from cost sharing presented in this report for 2023 are preliminary figures which are subject to change based on the information that will be provided in the NSA Reports on the verification of the cost sharing to be submitted by the 1st September 2024. These changes may affect the analysis of the Actual Costs for Users and of the regulatory result.

Regulatory result (RR)

ANA net gain on activity in the Luxembourg terminal charging zone in the year 2023

ANA reported a net loss of -2.2 M€, as a combination of a loss of -1.8 M€ arising from the cost sharing mechanism, with a loss of -0.4 M€ arising from the traffic risk sharing mechanism.

ANA overall regulatory results (RR) for the Luxembourg terminal charging zone activity

Ex-post, the overall RR taking into account the net loss from the terminal activity mentioned above (-2.2 M€) amounts to -2.2 M€ (-15.3% of the terminal revenues), as the RoE for ANA has been set to zero. The resulting ex-post rate of return on equity is -15.0%.