Cost-efficiency - Germany

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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 576 313 321 337
Determined costs 584 294 305 327
Difference costs -8 19 16 11
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 1.1% 1.5% 1.7%
Determined inflation index NA 107.2 108.8 110.6
Actual inflation rate NA 8.7% 6.0% 2.5%
Actual inflation index NA 116.4 123.4 126.4
Difference inflation index (p.p.) NA +9.1 +14.5 +15.8

AUC vs. DUC

In 2024, the terminal AUC was +12.2% (or +24.29 €2017) higher than the planned DUC. This results from the combination of significantly lower than planned TNSUs (-18.7%) and significantly lower than planned terminal costs in real terms (-8.8%, or -26.2 M€2017). It should be noted that the actual inflation index in 2024 was +15.8 p.p. higher than planned.

Terminal service units

The difference between actual and planned TNSUs (-18.7%) 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

Actual real terminal costs are -8.8% (-26.2 M€2017) lower than planned. This is the result of lower costs for the main ANSP, DFS (-8.8%, or -25.8 M€2017), the MET service provider (-6.0%, or -0.3 M€2017) and the NSA (-15.0%, or -0.2 M€2017).

Terminal costs for the main ANSP at charging zone level

Significantly lower than planned terminal costs in real terms for DFS in 2024 (-8.8%, or -25.8 M€2017) result from:
- Significantly lower staff costs (-5.7%), mainly due to inflation index impact (+15.8 p.p.) as in nominal terms staff costs are higher than planned by +7.8%, due to the 2023-2026 wage collective agreement, compensation for the inflation and extraordinary payments for additional shifts and overtime partially compensated by -46 operational FTEs than planned,
- Significantly lower other operating costs (-6.0%) mainly due to inflation index impact as in nominal terms other operating costs are higher than planned by 7.4%, as a result of inflation, higher prices of gas, more external staff employed than programmed and training needs,
- Significantly lower depreciation (-26.3%), “mainly caused by the project Tower ATS next Generation due to an updated implementation plan”. (…)”In addition, DFS has decided to no longer continue the Drone Detection System project”,
- Significantly lower cost of capital (-45.8%) mainly due to “the coverage gap for interest on pensions, which is recalculated annually based on differences between planned and actual interest rates”. The 2024 cost of capital exclude the income of commercial papers.

RP3 summary

When considering the whole of RP3 (2020-2024) for Germany terminal charging zone , actual TNSUs are -13.4% lower than planned, while actual costs in real terms are -3.9% lower than the determined costs (some -55.4 M€2017). As a result, the weighted average actual unit cost over RP3 (284.85 €2017) is +11.0% higher than planned in the PP (256.71 €2017).

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

AUCU components (€/SU) – 2024
Components of the AUCU in 2024 €/SU
DUC 218.16
Inflation adjustment 33.56
Cost exempt from cost-sharing -7.75
Traffic risk sharing adjustment 37.47
Traffic adj. (costs not TRS) 0.99
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -0.42
Application of lower unit rate -27.72
Total adjustments 36.13
AUCU 254.29
AUCU vs. DUC + 16.6%
Cost exempt from cost sharing by item - 2024 €'000 €/SU
New and existing investments -8,831.1 -7.25
Competent authorities and qualified entities costs -184.6 -0.15
Eurocontrol costs 0.0 0.00
Pension costs -1,192.6 -0.98
Interest on loans 0.0 0.00
Changes in law 763.3 0.63
Total cost exempt from cost risk sharing -9,445.0 -7.75

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2024 (254.29 €) is +16.6% higher than the nominal DUC (218.16 €). The difference between these two figures (+36.13 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+33.56 €/SU);
- the impact of adjustments resulting from the costs exempted from cost sharing mechanism (-7.75 €/SU);
- the addition of the traffic risk sharing adjustments (+37.47 €/SU);
- the addition of the traffic adjustment (+0.99 €/SU) for the costs not subject to traffic risk sharing;
- the deduction of other revenues (-0.42 €/SU); and
- application of a lower unit rate as foreseen in Art. 29(6) in year 2024 (-27.72 €/SU).
The share of the regulatory result (see items 10 to 14) in the AUCU (before the deduction of other revenues) is 2.2%.

Regulatory result (RR)

DFS net gain/loss on activity in the Germany terminal charging zone in the year 2024

DFS reported a net gain of +6.3 M€, as a combination of a gain of +20.4 M€ arising from the cost sharing mechanism, with a loss of -14.1 M€ arising from the traffic risk sharing mechanism.

DFS overall regulatory result (RR) for the terminal activity

Ex-post, the overall RR comprises only the net gain from the terminal activity mentioned above (+6.3 M€) and amounts to 1.9% of the terminal revenues, as the RoE for DFS has been set to zero. The resulting ex-post rate of return on equity is 1.4%. See also Note 3 in Box 10 above.

RP3 summary

When considering the whole of RP3 (2020-2024), DFS generated a cumulative gain in respect of cost sharing of +35.7 M€, as actual total costs for RP3 were lower than planned. The traffic risk sharing mechanism generated a loss of -35.1 M€. Adding the gain of +3.0 M€ to be retained by the ATSP in respect of financial incentives leads to an overall regulatory result of +3.5 M€ (the RoE for DFS has been set to zero), which corresponds to an average ex-post rate of return on equity of 0.3%. See also Note 3 in Box 10 above.

Note 2: The proportion of financing through equity for 2021A and 2022A should be corrected to reflect the actual share, in spite of the specific composition of the asset base and the significantly higher than planned cost of capital reported to be due to “the negative development of the commercial papers”. For the purpose of the analysis, it has been set at the level of the 2021D and 2022D presented in the revised draft performance plan.
Note 3: Ex-post RR does not take into account the application of lower unit rates as per Art. 29.6 (loss in revenues for DFS corresponds to -2.8 M€ for 2020-2021 and -33.8 M€ for 2024).