Cost-efficiency - Hungary

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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 35 24 27 35
Determined costs 36 25 28 31
Difference costs -1 0 -2 4
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 3.5% 3.3% 3.0%
Determined inflation index NA 118 121.9 125.5
Actual inflation rate NA 15.3% 17.0% 3.7%
Actual inflation index NA 133.4 156.1 161.9
Difference inflation index (p.p.) NA +15.4 +34.3 +36.4

AUC vs. DUC

In 2024, the terminal AUC was -16.1% (or -16 723.37 HUF2017, -54.12 €2017) lower than the planned DUC. This results from the combination of significantly lower than planned terminal costs in real terms (-10.4%, or -877.0 MHUF2017, -2.8 M€2017) and significantly higher than planned TNSUs (+6.9%). It should be noted that the actual inflation index in 2024 was +36.4 p.p. higher than planned.

Terminal service units

The difference between actual and planned TNSUs (+6.9%) falls outside the ±2% dead-band, but does not exceed the +10% threshold foreseen in the traffic risk sharing mechanism. The resulting gain of additional terminal revenues is therefore shared between the ANSP and the airspace users (see the main ANSP gain in Box 11).

Terminal costs by entity

The 2024 actual real terminal costs are -10.4% (-2.8 M€2017) lower than planned. This is the result of lower than planned costs for the main ANSP, HungaroControl (-10.5%, or -2.8 M€2017) and the MET service provider (-18.5%, or -0.03 M€2017) and higher costs for the NSA (+2.3%, or +0.01 M€2017).

Terminal costs for the main ANSP at charging zone level

The actual real terminal ANS costs are significantly lower than planned for HungaroControl in 2024 (-10.5%, or -2.8 M€2017), and result from:
- Significantly higher than planned staff costs (+15.5%), mainly due to “pay rises (…) for both ATCO and non-ATCO positions”,
- Significantly lower than planned other operating costs (-9.8%), but higher in nominal terms (+16.3%), mainly due to “extra payment to the government (…), energy price (…), local business tax (…), supplier charges (…), aviation liability insurance premiums.”
- Significantly lower than planned depreciation costs (-61.7%), “caused by investment (…) behind schedule (…) and certain assets (…) put into operation later than planned”,
- Significantly higher than planned cost of capital (+50.6%), mainly due to “the recognition of the pension related obligations in the employed capital”.

RP3 summary

When considering the whole of RP3 (2020-2024) for Hungary terminal charging zone, the actual TNSUs are +5.7% higher than planned, while actual costs in real terms are -10.4% lower than the determined costs (some -3 413.8 MHUF2017 or -11.0 M€2017). As a result, the weighted average actual unit cost over RP3 (102 083.69 HUF2017 or 330.38 €2017) is -15.2% lower than planned in the PP (120 357.78 HUF2017 or 389.52 €2017).

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

AUCU components (€/SU) – 2024
Components of the AUCU in 2024 €/SU
DUC 301.01
Inflation adjustment 51.65
Cost exempt from cost-sharing -52.88
Traffic risk sharing adjustment -9.44
Traffic adj. (costs not TRS) -0.43
Finantial incentives 1.41
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -3.07
Application of lower unit rate 0.00
Total adjustments -12.77
AUCU 288.25
AUCU vs. DUC -4.2%
Cost exempt from cost sharing by item - 2024 €'000 €/SU
New and existing investments -4,629.7 -52.98
Competent authorities and qualified entities costs 8.5 0.10
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 -4,621.3 -52.88

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2024 (113 889.45 HUF or 288.25 €) is -4.2% lower than the nominal DUC (118 934.47 HUF or 301.01 €). The difference between these two figures (-5 045.02 HUF/SU or -12.77 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+20407.93 HUF/SU or +51.65 €/SU);
- the impact of adjustments resulting from the costs exempted from cost sharing mechanism (-20894.17 HUF/SU or -52.88 €/SU);
- the deduction of the traffic risk sharing adjustments (-3731.74 HUF/SU or -9.44 €/SU);
- the deduction of the traffic adjustment (-170.14 HUF/SU or -0.43 €/SU) for the costs not subject to traffic risk sharing;
- the financial incentives (+556.29 HUF/SU or +1.41 €/SU); and
- the deduction of other revenues (-1213.19 HUF/SU or -3.07 €/SU).
The share of the regulatory result (see items 10 to 14) in the AUCU (before the deduction of other revenues) is 3.7%.

Regulatory result (RR)

HungaroControl net loss on activity in the Hungary terminal charging zone in the year 2024

HungaroControl reported a net loss of -806.4 MHUF, as a combination of a loss of -1 184.9 MHUF arising from the cost sharing mechanism, with a gain of +329.9 MHUF arising from the traffic risk sharing mechanism and a gain of +48.6 MHUF relating to financial incentives.

HungaroControl 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 (-806.4 MHUF) and the actual RoE (+1 160.4 MHUF) amounts to +354.0 MHUF (3.6% of the terminal revenues). The resulting ex-post rate of return on equity is 2.2%, which is lower than the 7.7% planned in the PP.

RP3 summary

When considering the whole of RP3 (2020-2024), HungaroControl generated a cumulative gain in respect of cost sharing of +555.6 MHUF, as actual total costs for RP3 were lower than planned. The traffic risk sharing mechanism generated gain of +873.5 MHUF. Adding the gain of +92.5 MHUF to be retained by the ATSP in respect of financial incentives and the actual RoE (+3 673.6 MHUF over RP3) leads to an overall regulatory result of +5 195.2 MHUF, which corresponds to an average ex-post rate of return on equity of 9.6% (compared to 7.2% initially planned in the PP).