Cost-efficiency - Malta

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Terminal charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 9 5 4 NA
Determined costs 10 6 6 7
Difference costs -2 -1 -2 NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 4.7% 2.8% 2.1%
Determined inflation index NA 109.7 112.8 115.1
Actual inflation rate NA 6.1% 5.6% NA
Actual inflation index NA 111.2 117.4 NA
Difference inflation index (p.p.) NA +1.5 +4.6 NA

AUC vs. DUC

In 2023, the terminal AUC was -33.8% (or -53.81 €2017) lower than the planned DUC. This results from the combination of significantly lower than planned terminal costs in real terms (-29.1%, or -1.6 M€2017) and significantly higher than planned TNSUs (+7.1%). It should be noted that actual inflation index in 2023 was +4.6 p.p. higher than planned.

Terminal service units

The difference between the 2023 actual and planned TNSUs (+7.1%) 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 -29.1% (-1.6 M€2017) lower than planned. This is the result of lower than planned costs for the main ANSP, MATS (-33.8%, or -1.6 M€2017) and the NSA (-16.5%, or -0.1 M€2017) while other ANSP costs are higher (MIA, +6.5%, or +0.03 M€2017) than planned.

Terminal costs for the main ANSP at charging zone level

The 2023 actual real terminal ANS costs for MATS are lower than planned (-33.8%, or -1.6 M€2017), partially due to a higher than planned inflation index in 2023 ( +4.6 p.p.) and resulting from:
- Significantly lower than planned staff costs (-18.0%),
- Significantly lower than planned other operating costs (-60.4%),
- Significantly lower than planned depreciation (-44.5%),
- Significantly higher than planned cost of capital (+6.9%).

No explanations on the differences between the 2023 determined and actual costs is available in the Additional information to the reporting tables. It is noted that the en route actual costs reported are lower than planned for all items but the cost of capital.

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

AUCU components (€/SU) – 2023
Components of the AUCU in 2023 €/SU
DUC 173.96
Inflation adjustment 5.01
Cost exempt from cost-sharing -12.10
Traffic risk sharing adjustment -5.29
Traffic adj. (costs not TRS) -1.03
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues 0.00
Application of lower unit rate 0.00
Total adjustments -13.42
AUCU 160.55
AUCU vs. DUC -7.7%
Cost exempt from cost sharing by item - 2023 €'000 €/SU
New and existing investments -380.8 -10.16
Competent authorities and qualified entities costs -73.0 -1.95
Eurocontrol costs 0.0 0.00
Pension costs 0.0 0.00
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -453.8 -12.10

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2023 (160.96 €) is -7.5% lower than the nominal DUC (173.96 €). The difference between these two figures (-13.01 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+5.01 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-11.70 €/SU);
- the deduction of the traffic risk sharing adjustments (-5.29 €/SU); and
- the deduction of the traffic adjustment (-1.03 €/SU) for the costs not subject to traffic risk sharing.
The share of the regulatory result in the AUCU (before the deduction of other revenues) is 28.5%.

Regulatory result (RR)

MATS net gain on activity in the Malta terminal charging zone in the year 2023

MATS reported a net gain of +1.6 M€, as a combination of a gain of +1.4 M€ arising from the cost sharing mechanism, with a gain of +0.2 M€ arising from the traffic risk sharing mechanism.

MATS overall regulatory results (RR) for the terminal activity

Ex-post, the overall RR taking into account the net gain from the terminal activity mentioned above (+1.6 M€) and the actual RoE (+0.1 M€) amounts to +1.7 M€ (33.7% of the terminal revenues). The resulting ex-post rate of return on equity is 57.1%, which is higher than the 4.0% planned in the PP.