Cost-efficiency - Norway

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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 89 49 54 NA
Determined costs 88 44 46 48
Difference costs 1 5 8 NA
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 2.0% 2.0% 2.0%
Determined inflation index NA 111.2 113.4 115.6
Actual inflation rate NA 6.2% 5.8% NA
Actual inflation index NA 117.7 124.5 NA
Difference inflation index (p.p.) NA +6.5 +11.1 NA

AUC vs. DUC

In 2023, the terminal AUC was +14.2% (or +230.33 NOK2017, +24.69 €2017) higher than the planned DUC. This results from the combination of significantly higher than planned terminal costs in real terms (+8.2%, or +31.9 MNOK2017, +3.4 M€2017) and significantly lower than planned TNSUs (-5.3%). 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 (-5.3%) 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 +8.2% (+3.4 M€2017) higher than planned. This is the result of higher costs for the main ANSP, Avinor (+8.2%, or +3.3 M€2017) and the MET service provider (+11.2%, or +0.1 M€2017) and lower costs for the NSA (-3.9%).

Terminal costs for the main ANSP at charging zone level

Significantly higher than planned terminal costs in real terms for Avinor in 2023 (+8.2%, or +3.3 M€2017) result from:
- Significantly higher staff costs (+36.6%), reflecting i) higher salary, pension and overtime costs and ii) a change in cost accounting methodology which “results in an increase in staff costs and a reduction in other operating costs accordingly”.
- Significantly lower other operating costs (-42.7%), primarily resulting from the change in cost accounting methodology as detailed above.
- Significantly higher depreciation (+9.7%),
- Significantly lower cost of capital (-22.7%) explained by “delay in projects, mainly related to the new OSL tower system.”
- Significantly higher deduction for VFR exempted flights (+7.0%).

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

AUCU components (€/SU) – 2023
Components of the AUCU in 2023 €/SU
DUC 157.08
Inflation adjustment 13.44
Cost exempt from cost-sharing -1.02
Traffic risk sharing adjustment 3.72
Traffic adj. (costs not TRS) 0.19
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 16.33
AUCU 173.41
AUCU vs. DUC + 10.4%
Cost exempt from cost sharing by item - 2023 €'000 €/SU
New and existing investments -369.8 -1.62
Competent authorities and qualified entities costs -3.0 -0.01
Eurocontrol costs 0.0 0.00
Pension costs 140.8 0.62
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -232.1 -1.02

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2023 (1978.56 NOK or 173.41 €) is +10.4% higher than the nominal DUC (1792.22 NOK or 157.08 €). The difference between these two figures (+186.35 NOK/SU or +16.33 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+153.38 NOK/SU or +13.44 €/SU);
- the impact of adjustments resulting from the costs exempted from cost-sharing mechanism (-11.63 NOK/SU or -1.02 €/SU);
- the addition of the traffic risk sharing adjustments (+42.44 NOK/SU or +3.72 €/SU); and
- the addition of the traffic adjustment (+2.16 NOK/SU or +0.19 €/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 -8.3%.

Regulatory result (RR)

Avinor net gain on activity in the Norway terminal charging zone in the year 2023

Avinor reported a net loss of -55.0 MNOK, as a combination of a loss of -42.4 MNOK arising from the cost sharing mechanism, with a loss of -12.6 MNOK arising from the traffic risk sharing mechanism.

Avinor overall regulatory results (RR) for the terminal activity

Ex-post, the overall RR taking into account the net loss from the terminal activity mentioned above (-55.0 MNOK) and the actual RoE (+18.8 MNOK) amounts to -36.2 MNOK (8.2% of the terminal revenues). The resulting ex-post rate of return on equity is -19.6%..