Cost-efficiency - Belgium

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PRB monitoring

▪ The en route 2024 actual unit cost of Belgium-Luxembourg was 87.09€2017, +8.5% higher than the determined unit cost (80.26€2017). The terminal 2024 actual unit cost of Belgium was 232.99€2017, +5.3% higher than the determined unit cost (221.23€2017).

▪ The en route 2024 actual service units (2.5M) were -1.8% lower than the determined service units (2.6M).

▪ The en route 2024 actual total costs were +13M€2017 (+6.6%) higher than determined. The gap was mainly due to the negative exceptional item which was included in the determined costs to achieve the RP3 cost-efficiency targets, but is not included in the actual costs. This was partially offset by lower staff costs than planned (-8.6M€2017, or -8.4%) for skeyes, which the NSA attributed to difficulties in recruitment.

▪ Skeyes costs of investments were 18M€2017 in 2024 for both en route and terminal charging zones, -9.8% less than determined (20M€2017). According to the NSA, this difference is due to projects delays and a lower fixed asset base.

▪ The en route actual unit cost incurred by users in 2024 was 97.80€ (-0.7% below the 2024 DUC). The terminal actual unit cost incurred by users was 186.67€ (-31% below the 2024 DUC) for Belgium and 226.12€ (-14% below the 2024 DUC) for Luxembourg. The differences between the AUCU and the DUC for the terminal charging zones of Belgium and Luxembourg are mainly affected by the adjustment of other revenues.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 432 240 255 269
Determined costs 442 250 262 252
Difference costs -10 -10 -7 17
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 7.8% 4.7% 2.1%
Determined inflation index NA 115.6 123.9 126.5
Actual inflation rate NA 10.3% 2.3% 4.3%
Actual inflation index NA 118.3 121 126.2
Difference inflation index (p.p.) NA +2.7 -2.8 -0.3

AUC vs. DUC

In 2024, the en route AUC was +8.5% (or +6.84 €2017) higher than the planned DUC. This results from the combination of significantly higher than planned en route costs in real terms (+6.6%, or +13.5 M€2017) and lower than planned TSUs (-1.8%).

En route service units

The difference between actual and planned TSUs (-1.8%) falls inside the ±2% dead-band. Hence, the loss of en route revenues is borne by the ANSPs (see items 10 to 14).

En route costs by entity

Actual real en route costs are +6.6% (+13.5 M€2017) higher than planned. This is the result of higher costs for the other ANSP (ANA and MUAC, +16.3%, or +11.0 M€2017) and the main ANSP, skeyes (+2.0%, or +2.5 M€2017) and lower costs for the NSA/EUROCONTROL (-0.3%, or -0.04 M€2017).

En route costs for the main ANSP at charging zone level

Higher than planned en route costs in real terms for skeyes in 2024 (+2.0%, or +2.6 M€2017) result from:
- Significantly lower staff costs (-8.4%), mainly due to “lower number of FTE, which is a direct result of ongoing recruitment challenges in an increasingly tight labour market”,
- Significantly higher other operating costs (+6.9%), primarily due to greater use of external staff to maintain operations and a provision for major building maintenance following the decision to renovate rather than rebuild.
- Significantly lower depreciation (-6.5%), mainly due to delays in commissioning radio sites and IT-related projects, including the VCS Main System and the SAT for WAN, caused by supplier issues and difficulties obtaining permits,
- Significantly lower cost of capital (-15.1%), “mainly due to a lower fixed asset base”,
- Exceptional costs which reflect a reporting of negative amount (-13.7 M€ in nominal terms) in 2024 determined costs for skeyes to correct for the difference between planned and actual costs in 2021-22 resulting from resubmission of the RP3 PP. The same treatment is applied to other ANSPs (-11.6 M€ for MUAC and -0.4 M€ for ANA).

RP3 summary

When considering the whole of RP3 (2020-2024) for Belgium-Luxembourg en route charging zone, actual TSUs are -0.1% lower than planned, while actual costs in real terms are -1.2% lower than the determined costs (some -13.1 M€2017). As a result, the weighted average actual unit cost over RP3 (113.34 €2017) is -1.1% lower than planned in the PP (114.64 €2017).

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

AUCU components (€/SU) – 2024
Components of the AUCU in 2024 €/SU
DUC 98.47
Inflation adjustment -0.18
Cost exempt from cost-sharing -0.21
Traffic risk sharing adjustment 0.00
Traffic adj. (costs not TRS) 0.15
Finantial incentives 0.16
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -0.58
Application of lower unit rate 0.00
Total adjustments -0.67
AUCU 97.80
AUCU vs. DUC -0.7%
Cost exempt from cost sharing by item - 2024 €'000 €/SU
New and existing investments -1,294.4 -0.51
Competent authorities and qualified entities costs 16.0 0.01
Eurocontrol costs -57.8 -0.02
Pension costs 805.2 0.32
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -531.0 -0.21

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2024 (97.80 €) is -0.7% lower than the nominal DUC (98.47 €). The difference between these two figures (-0.67 €/SU) is due to:
- the negative inflation adjustment resulting from lower than planned inflation (-0.18 €/SU);
- the impact of adjustments resulting from the costs exempted from cost sharing mechanism (-0.21 €/SU);
- the addition of the traffic adjustment (+0.15 €/SU) for the costs not subject to traffic risk sharing;
- financial incentives (+0.16 €/SU); and
- the deduction of other revenues (-0.58 €/SU).
The share of the regulatory result (see items 10 to 14) in the AUCU (before the deduction of other revenues) is -7.8%.
It is to be noted that Belgian State did not charge a part of 2024 Eurocontrol costs (3.0 M€2017) to airspace users but covered it through “State intervention”.

Regulatory result (RR)

skeyes net gain/loss on activity in the Belgium-Luxembourg en route charging zone in the year 2024

skeyes reported a net loss of -6.8 M€, as a combination of a loss of -4.5 M€ arising from the cost sharing mechanism, with a loss of -2.7 M€ arising from the traffic risk sharing mechanism and a gain of +0.4 M€ relating to financial incentives.

skeyes overall regulatory result (RR) for the en route activity

Ex-post, the overall RR taking into account the net loss from the en route activity mentioned above (-6.8 M€) and the actual RoE (+2.5 M€) amounts to -4.3 M€ (-2.8% of the en route revenues). The resulting ex-post rate of return on equity is negative (-6.5%).

RP3 summary

When considering the whole of RP3 (2020-2024), skeyes generated a cumulative gain in respect of cost sharing of +14.0 M€, as actual total costs for RP3 were lower than planned. The traffic risk sharing mechanism generated a loss of -0.1 M€. Adding the gain of +0.4 M€ to be retained by the ATSP in respect of financial incentives and the actual RoE (+8.1 M€ over RP3) leads to an overall regulatory result of +22.4 M€, which corresponds to an average ex-post rate of return on equity of 8.1% (compared to 3.0% initially planned in the PP).