Cost-efficiency - Denmark

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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 48 24 26 29
Determined costs 48 24 25 25
Difference costs 0 0 1 4
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 1.4% 1.5% 1.6%
Determined inflation index NA 104.2 105.7 107.4
Actual inflation rate NA 8.5% 3.4% 1.3%
Actual inflation index NA 112.5 116.3 117.8
Difference inflation index (p.p.) NA +8.2 +10.5 +10.4

AUC vs. DUC

In 2024, the terminal AUC was +13.2% (or +136.32 DKK2017, +18.33 €2017) higher than the planned DUC. This results from the combination of significantly higher than planned terminal costs in real terms (+7.4%, or +13.1 MDKK2017, +1.8 M€2017) and significantly lower than planned TNSUs (-5.1%). It should be noted that the actual inflation index in 2024 was +10.4 p.p. higher than planned.

Terminal service units

The difference between actual and planned TNSUs (-5.1%) 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 (see the main ANSP loss in Box 11).

Terminal costs by entity

Actual real terminal costs are +7.4% (+1.8 M€2017) higher than planned. This is the result of higher costs for the main ANSP, NAVIAIR (+7.2%, or +1.7 M€2017) and the MET service provider (+31.6%, or +0.1 M€2017).

Terminal costs for the main ANSP at charging zone level

Significantly higher than planned terminal costs in real terms for NAVIAIR in 2024 (+7.2%, or +1.7 M€2017) result from:
- Significantly higher staff costs (+7.5%), explained by i) higher than expected “wage increases due to collective agreement regarding all government employees”, ii) effects from a capacity-oriented collective agreement with ATCOs made in 2023, and iii) a high level of extra shifts.
- Significantly higher other operating costs (+14.9%) reflecting additional costs for training as well as inflation,
- Significantly lower depreciation (-11.5%) reflecting “fewer and postponed investments, and later dates of entry into operation than planned”,
- Significantly higher cost of capital (+18.5%) resulting from a combination of higher interest rates and a higher than planned asset base,
- No deduction through exceptional costs which was included in the RP3 PP to reduce the level of the terminal cost-base.

RP3 summary

When considering the whole of RP3 (2020-2024) for Denmark terminal charging zone, actual TNSUs are -4.6% lower than planned, while actual costs in real terms are -0.1% lower than the determined costs (some -0.6 MDKK2017 or -0.1 M€2017). As a result, the weighted average actual unit cost over RP3 (1 516.81 DKK2017 or 203.96 €2017) is +4.8% higher than planned in the PP (1 447.61 DKK2017 or 194.65 €2017).

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

AUCU components (€/SU) – 2024
Components of the AUCU in 2024 €/SU
DUC 147.31
Inflation adjustment 12.60
Cost exempt from cost-sharing -1.38
Traffic risk sharing adjustment 3.36
Traffic adj. (costs not TRS) 0.06
Finantial incentives -0.77
Modulation of charges 0.00
Cross-financing 0.00
Other revenues 0.97
Application of lower unit rate 0.00
Total adjustments 14.84
AUCU 162.15
AUCU vs. DUC + 10.1%
Cost exempt from cost sharing by item - 2024 €'000 €/SU
New and existing investments -223.1 -1.38
Competent authorities and qualified entities costs 0.0 0.00
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 -223.1 -1.38

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2024 (1 209.13 DKK or 162.15 €) is +10.1% higher than the nominal DUC (1 098.46 DKK or 147.31 €). The difference between these two figures (+110.67 DKK/SU or +14.84 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+93.94 DKK/SU or +12.60 €/SU);
- the impact of adjustments resulting from the costs exempted from cost sharing mechanism (-10.26 DKK/SU or -1.38 €/SU);
- the addition of the traffic risk sharing adjustments (+25.04 DKK/SU or +3.36 €/SU);
- the addition of the traffic adjustment (+0.48 DKK/SU or +0.06 €/SU) for the costs not subject to traffic risk sharing;
- financial incentives (-5.74 DKK/SU or -0.77 €/SU); and
- the addition of other revenues (+7.21 DKK/SU or +0.97 €/SU) which reflect the recovery of overestimated amounts of funding received from Union assistance programmes returned to airspace users in the previous years.
The share of the regulatory result (see items 10 to 14) in the AUCU (before the deduction of other revenues) is -6.6%.

Regulatory result (RR)

NAVIAIR net gain/loss on activity in the Denmark terminal charging zone in the year 2024

NAVIAIR reported a net loss of -22.8 MDKK, as a combination of a loss of -16.4 MDKK arising from the cost sharing mechanism, with a loss of -5.5 MDKK arising from the traffic risk sharing mechanism and a loss of -0.9 MDKK relating to financial incentives.

NAVIAIR 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 (-22.8 MDKK) and the actual RoE (+10.6 MDKK) amounts to -12.3 MDKK (-6.4% of the terminal revenues). The resulting ex-post rate of return on equity is negative (-5.8%).

RP3 summary

When considering the whole of RP3 (2020-2024), NAVIAIR generated a cumulative loss in respect of cost sharing of -4.4 MDKK, as actual total costs for RP3 were higher than planned. The traffic risk sharing mechanism generated a loss of -11.2 MDKK. Adding the loss of -1.8 MDKK to be retained by the ATSP in respect of financial incentives and the actual RoE (+53.3 MDKK over RP3) leads to an overall regulatory result of +35.9 MDKK, which corresponds to an average ex-post rate of return on equity of 3.4% (compared to 5.0% initially planned in the PP).