Cost-efficiency - Czech Republic

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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 31 17 21 23
Determined costs 32 17 20 21
Difference costs -1 -1 0 2
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 2.0% 2.0% 2.0%
Determined inflation index NA 112.8 115 117.3
Actual inflation rate NA 14.8% 12.0% 2.7%
Actual inflation index NA 128.2 143.6 147.5
Difference inflation index (p.p.) NA +15.4 +28.6 +30.1

AUC vs. DUC

In 2024, the terminal AUC was +3.2% (or +168.76 CZK2017, +6.41 €2017) higher than the planned DUC. This results from the combination of significantly lower than planned TNSUs (-10.8%) and significantly lower than planned terminal costs in real terms (-7.9%, or -38.5 MCZK2017, -1.5 M€2017). It should be noted that the actual inflation index in 2024 was +30.1 p.p. higher than planned.

Terminal service units

The difference between 2024 actual and planned TNSUs (-10.8%) falls outside 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 (see the main ANSP loss in Box 11).

Terminal costs by entity

The 2024 actual real terminal costs are -7.9% (-1.5 M€2017) lower than planned. This is the result of lower than planned costs for the main ANSP, ANS CR (-6.9%, or -1.2 M€2017), the MET service provider (-59.0%, or -0.2 M€2017) while the costs for the NSA are in line with the plan.

Terminal costs for the main ANSP at charging zone level

Significantly lower than planned terminal costs in real terms for ANS CR in 2024 (-6.9%, or -1.2 M€2017) result from:
- Significantly higher than planned staff costs (+10.8%), reflecting the impact of high inflation in 2022 and 2023 (14.8% and 12.0% respectively),
- Significantly lower than planned other operating costs (-34.9%), mainly due to “cost containment measures”,
- Significantly lower than planned depreciation (-25.9%), reflecting the fact that “some of the system upgrades were postponed”,
- Significantly lower than planned cost of capital (-22.4%), mainly due to “a gap in some investments and consequently lower asset base”.

RP3 summary

When considering the whole of RP3 (2020-2024) for Czech Republic terminal charging zone, actual TNSUs are -7.2% lower than planned, while actual costs in real terms are -8.6% lower than the determined costs (some -186.6 MCZK2017 or -7.1 M€2017). As a result, the weighted average actual unit cost over RP3 (7 439.05 CZK2017 or 282.73 €2017) is -1.4% lower than planned in the PP (7 547.00 CZK2017 or 286.83 €2017).

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

AUCU components (€/SU) – 2024
Components of the AUCU in 2024 €/SU
DUC 237.29
Inflation adjustment 48.99
Cost exempt from cost-sharing -18.48
Traffic risk sharing adjustment 16.36
Traffic adj. (costs not TRS) 0.93
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -2.60
Application of lower unit rate -25.22
Total adjustments 19.97
AUCU 257.26
AUCU vs. DUC + 8.4%
Cost exempt from cost sharing by item - 2024 €'000 €/SU
New and existing investments -1,478.3 -18.14
Competent authorities and qualified entities costs 0.0 0.00
Eurocontrol costs 0.0 0.00
Pension costs -27.4 -0.34
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -1,505.7 -18.48

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2024 (6 451.63 CZK or 257.26 €) is +8.4% higher than the nominal DUC (5 950.86 CZK or 237.29 €). The difference between these two figures (+500.77 CZK/SU or +19.97 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+1228.49 CZK/SU or +48.99 €/SU);
- the impact of adjustments resulting from the costs exempted from cost sharing mechanism (-463.35 CZK/SU or -18.48 €/SU);
- the addition of the traffic risk sharing adjustments (+410.22 CZK/SU or +16.36 €/SU);
- the addition of the traffic adjustment (+23.23 CZK/SU or +0.93 €/SU) for the costs not subject to traffic risk sharing;
- the deduction of other revenues (-65.27 CZK/SU or -2.60 €/SU); and
- application of a lower unit rate as foreseen in Art. 29(6) in year 2024 (-632.55 CZK/SU or -25.22 €/SU); and
The share of the regulatory result (see items 10 to 14) in the AUCU (before the deduction of other revenues) is 1.3%.

Regulatory result (RR)

ANS CR net loss on activity in the Czech Republic terminal charging zone in the year 2024

ANS CR reported a net loss of -28.5 MCZK, as a combination of a loss of -5.3 MCZK arising from the cost sharing mechanism, with a loss of -23.1 MCZK arising from the traffic risk sharing mechanism. See also Note 3.

ANS CR overall regulatory result (RR) for the terminal activity

Ex-post, the overall RR taking into account the net loss from the terminal activity mentioned above (-28.5 MCZK) and the actual RoE (+28.9 MCZK) amounts to +0.4 MCZK (0.1% of the terminal revenues). The resulting ex-post rate of return on equity is 0.1%, which is lower than the 8.4% planned in the PP. See also Notes 2 and 3.

RP3 summary

When considering the whole of RP3 (2020-2024), ANS CR generated a cumulative gain in respect of cost sharing of +119.6 MCZK, as actual total costs for RP3 were lower than planned. The traffic risk sharing mechanism generated a loss of -61.5 MCZK. Adding the gain of +2.7 MCZK to be retained by the ATSP in respect of financial incentives and the actual RoE (+85.3 MCZK over RP3) leads to an overall regulatory result of +146.1 MCZK, which corresponds to an average ex-post rate of return on equity of 15.5% (compared to 9.0% initially planned in the PP). See also Notes 2 and 3.

Note 2: It should be noted that, since the Czech Republic caps the terminal Unit Rate, the ex-post RR is partially offset by the loss of revenues due to the application of the lower unit rate as per Art. 29.6 (loss of revenue amounting to -23.0 MCZK in 2020-21, -19.9 MCZK in 2022, -52.5 MCZK in 2023 and -51.6 MCZK in 2024).
Note 3: Czech Republic reported a bonus of 3.0 MCZK for performance in 2024 in the NSA Monitoring Report but has decided not to charge it to the airspace users.