Cost-efficiency - Italy

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PRB monitoring

▪ The en route 2024 actual unit cost of Italy was 50.65€2017, -12% lower than the determined unit cost (57.80€2017). The terminal zone 1 2024 actual unit cost was 125.26€2017, -11% lower than the determined unit cost (141.52€2017), while the terminal zone 2 2024 actual unit cost was 154.66€2017, -16% lower than the determined unit cost (183.14€2017).

▪ The en route 2024 actual service units (11.7M) were +4.0% higher than the determined service units (11.3M).

▪ The en route 2024 actual total costs were -58M€2017 (-8.8%) lower than determined. This is mainly driven by lower staff costs than planner for ENAV (-31M€2017, or -9.2%), as well as other operating costs (-19M€2017, or -20%). However, staff costs in nominal terms were higher than planned (+1.6%), due to higher traffic than expected and salary increases. With respect to other operating costs, the NSA explained that the reduction compared to the plan is mainly due to cost containment measures introduced during the pandemic years.

▪ ENAV costs of investments were 140M€2017 in 2024 for both en route and terminal charging zones, -1.3% less than determined (142M€2017).

▪ The en route actual unit cost incurred by users in 2024 was 65.42€ (+7.1% above the 2024 DUC), while the terminal actual unit cost incurred by users for zone 1 was 157.77€ (+5.9% above the 2024 DUC), and 205.35€ (+6.0% above the 2024 DUC) for zone 2. The differences were mainly driven by positive inflation adjustments.

▪ The en route regulatory result for ENAV amounted to +116M€, or 18% of the 2024 revenue.

▪ Italy should ensure that any excessive regulatory result, including excess funds received by the ANSP due to the inflation mechanism, is either reinvested to improve the quality of services delivered to airspace users or reimbursed to them.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 1,186 641 667 681
Determined costs 1,197 651 674 689
Difference costs -12 -9 -7 -8
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 1.8% 1.2% 1.2%
Determined inflation index NA 105.3 106.6 107.9
Actual inflation rate NA 8.7% 5.9% 1.1%
Actual inflation index NA 112.8 119.4 120.7
Difference inflation index (p.p.) NA +7.4 +12.9 +12.9

AUC vs. DUC

In 2024, the en route AUC was -12.4% (or -7.15 €2017) lower than the planned DUC. This results from the combination of significantly lower than planned en route costs in real terms (-8.8%, or -57.6 M€2017) and higher than planned TSUs (+4.0%). It should be noted that the actual inflation index in 2024 was +12.9 p.p. higher than planned.

En route service units

The difference between 2024 actual and planned TSUs (+4.0%) 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 en route revenues is therefore shared between the ANSP and the airspace users (see the main ANSP gain in Box 11).

En route costs by entity

The 2024 actual real en route costs are -8.8% (-57.6 M€2017) lower than planned. This is the result of lower than planned costs for the main ANSP, ENAV (-8.9%, or -49.5 M€2017), the other ANSP (ITAF, -11.2%, or -5.7 M€2017) and the NSA/EUROCONTROL (-5.2%, or -2.4 M€2017).

En route costs for the main ANSP at charging zone level

Significantly lower than planned en route costs in real terms for ENAV in 2024 (-8.9%, or -49.5 M€2017) are mainly due to an actual inflation index which is +12.9 p.p. higher than planned and also result from:
- Staff costs were significantly lower than planned in real terms (-9.2%) but higher in nominal terms (+1.6%), mainly due to increased assisted air traffic impacting the variable part of remuneration, particularly overtime, a 2% revaluation of contractual minimums following the November 2022 agreements and an increase in the workforce.
- Significantly lower than planned other operating costs (-20.4%), mainly due to cost reduction actions implemented during the pandemic, which continue to have a positive effect in 2024.
- Significantly lower than planned depreciation costs (-8.8%).
- Significantly higher than planned cost of capital (+20.3%), mainly due to a revision of the actual cost of debt calculation (4.06% in 2024), excluding the Risk-Free Rate, in line with Commission Decision (EU) 2024/2035 of 29 July 2024.

RP3 summary

When considering the whole of RP3 (2020-2024) for Italy en route charging zone, actual TSUs are +4.9% higher than planned, while actual costs in real terms are -5.3% lower than the determined costs (some -164.0 M€2017). As a result, the weighted average actual unit cost over RP3 (70.38 €2017) is -9.7% lower than planned in the PP (77.94 €2017).

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

AUCU components (€/SU) – 2024
Components of the AUCU in 2024 €/SU
DUC 61.10
Inflation adjustment 5.18
Cost exempt from cost-sharing 0.23
Traffic risk sharing adjustment -0.69
Traffic adj. (costs not TRS) -0.40
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues 0.00
Application of lower unit rate 0.00
Total adjustments 4.32
AUCU 65.42
AUCU vs. DUC + 7.1%
Cost exempt from cost sharing by item - 2024 €'000 €/SU
New and existing investments -1,709.9 -0.15
Competent authorities and qualified entities costs -30.1 0.00
Eurocontrol costs -2,384.7 -0.20
Pension costs 0.0 0.00
Interest on loans 1,302.4 0.11
Changes in law 5,552.9 0.47
Total cost exempt from cost risk sharing 2,730.6 0.23

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2024 (65.42 €) is +7.1% higher than the nominal DUC (61.10 €). The difference between these two figures (+4.32 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+5.18 €/SU);
- the impact of adjustments resulting from the costs exempted from cost sharing mechanism (+0.23 €/SU);
- the deduction of the traffic risk sharing adjustments (-0.69 €/SU); and
- the deduction of the traffic adjustment (-0.40 €/SU) for the costs not subject to traffic risk sharing.
The share of the regulatory result (see items 10 to 14) in the AUCU (before the deduction of other revenues) is 16.1%.

Regulatory result (RR)

ENAV net gain on activity in the Italy en route charging zone in the year 2024

ENAV reported a net gain of +79.8 M€, as a combination of a gain of +64.8 M€ arising from the cost sharing mechanism, with a gain of +15.0 M€ arising from the traffic risk sharing mechanism.

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

Ex-post, the overall RR taking into account the net gain from the en route activity mentioned above (+79.8 M€) and the actual RoE (+36.6 M€) amounts to +116.4 M€ (17.5% of the en route revenues). The resulting ex-post rate of return on equity is 16.1%, which is higher than the 5.0% planned in the PP.

RP3 summary

When considering the whole of RP3 (2020-2024), ENAV generated a cumulative gain in respect of cost sharing of +166.9 M€, as actual total costs for RP3 were lower than planned. The traffic risk sharing mechanism generated a gain of +69.4 M€. Adding the gain of +8.5 M€ to be retained by the ATSP in respect of financial incentives and the actual RoE (+193.1 M€ over RP3) leads to an overall regulatory result of +437.9 M€, which corresponds to an average ex-post rate of return on equity of 11.6% (compared to 5.2% initially planned in the PP).