PRB monitoring
▪ The en route 2024 actual unit cost of Latvia was 33.82€2017, +0.7% higher than the determined unit cost (33.59€2017). The terminal 2024 actual unit cost was 159.18€2017, +22.4% higher than the determined unit cost (130.10€2017).
▪ The en route 2024 actual service units (0.58M) were +1.2% higher than the determined service units (0.57M).
▪ The en route 2024 actual total costs were +0.4M€2017 (+1.9%) higher than determined. The difference is mainly the result of higher actual depreciation costs than determined for LGS (+1.1M €2017, or +43%), partially offset by lower than determined staff costs (-0.9M €2017, or -9.1%).
▪ LGS costs of investments were 6.8M€2017 in 2024 for both en route and terminal charging zones, +11% more than determined (6.1M€2017), mainly due to higher than planned depreciation . According to the NSA , this is due to the commissioning of investments that had been delayed since 2020.
▪ The en route actual unit cost incurred by users in 2024 was 44.46€ (+11% above the 2024 DUC), while the terminal actual unit cost incurred by users was 148.85€ (-1.0% below the 2024 DUC). The difference between the AUCU and the DUC for the en route charging zone is mainly driven by the positive inflation adjustment.
▪ Latvia 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
| Actual and determined data |
| Total costs - nominal (M€) |
2020-2021 |
2022 |
2023 |
2024 |
| Actual costs |
38 |
20 |
22 |
25 |
| Determined costs |
40 |
20 |
23 |
23 |
| Difference costs |
-2 |
0 |
0 |
2 |
| Inflation assumptions |
2020-2021 |
2022 |
2023 |
2024 |
| Determined inflation rate |
NA |
10.0% |
3.9% |
3.1% |
| Determined inflation index |
NA |
119.7 |
124.3 |
128.1 |
| Actual inflation rate |
NA |
17.2% |
9.1% |
1.3% |
| Actual inflation index |
NA |
127.5 |
139.2 |
141 |
| Difference inflation index (p.p.) |
NA |
+7.8 |
+14.8 |
+12.8 |
AUC vs. DUC
In 2024, the en route AUC was +0.7% (or +0.23 €2017) higher than the planned DUC. This results from the combination of higher than planned en route costs in real terms (+1.9%, or +0.4 M€2017) and higher than planned TSUs (+1.2%). It should be noted that the actual inflation index in 2024 was +12.8 p.p. higher than planned.
En route service units
The difference between actual and planned TSUs (+1.2%) falls inside the ±2% dead-band. Hence, the gain of additional en route revenues is kept by the ANSPs (see items 10 to 14).
En route costs by entity
Actual real en route costs are +1.9% (+0.4 M€2017) higher than planned. This is the result of higher costs for the main ANSP, LGS (+4.8%, or +0.8 M€2017) and lower costs for the MET service provider (-26.1%, or -0.1 M€2017) and the NSA/EUROCONTROL (-13.4%, or -0.3 M€2017).
En route costs for the main ANSP at charging zone level
Higher than planned en route costs in real terms for LGS in 2024 (+4.8%, or +0.8 M€2017) result from:
- Significantly lower staff costs (-9.1%) in real terms due to the impact of the inflation index (+12.8 p.p.) since, in nominal terms, staff costs were in line with the plan (+0.02%),
- Significantly higher other operating costs (+29.6%) reflecting mainly an “increase in provision of bad debts due to non-payment of operators based in Russia”,
- Significantly higher depreciation (+43.1%) explained by “commissioning initially (2020-2021) delayed investments in 2023“,
- Significantly lower cost of capital (-6.2%) reflecting lower than planned asset base,
- Significantly higher deduction for VFR exempted flights (+116.9%).
RP3 summary
When considering the whole of RP3 (2020-2024) for Latvia en route charging zone, actual TSUs are -2.0% lower than planned, while actual costs in real terms are -4.2% lower than the determined costs (some -4.0 M€2017). As a result, the weighted average actual unit cost over RP3 (36.44 €2017) is -2.2% lower than planned in the PP (37.28 €2017).
Actual unit cost incurred by the users (AUCU) (PI#1)
| AUCU components (€/SU) – 2024 |
| Components of the AUCU in 2024 |
€/SU |
| DUC |
40.05 |
| Inflation adjustment |
2.91 |
| Cost exempt from cost-sharing |
1.34 |
| Traffic risk sharing adjustment |
0.00 |
| Traffic adj. (costs not TRS) |
-0.08 |
| Finantial incentives |
0.40 |
| Modulation of charges |
0.00 |
| Cross-financing |
0.00 |
| Other revenues |
-0.17 |
| Application of lower unit rate |
0.00 |
| Total adjustments |
4.41 |
| AUCU |
44.46 |
| AUCU vs. DUC |
+ 11.0% |
| Cost exempt from cost sharing by item - 2024 |
€'000 |
€/SU |
| New and existing investments |
1,075.7 |
1.86 |
| Competent authorities and qualified entities costs |
-95.0 |
-0.16 |
| Eurocontrol costs |
-205.6 |
-0.36 |
| 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 |
775.1 |
1.34 |
The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2024 (44.46 €) is +11.0% higher than the nominal DUC (40.05 €). The difference between these two figures (+4.41 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+2.91 €/SU);
- the impact of adjustments resulting from the costs exempted from cost sharing mechanism (+1.34 €/SU);
- the deduction of the traffic adjustment (-0.08 €/SU) for the costs not subject to traffic risk sharing;
- financial incentives (+0.40 €/SU); and
- the deduction of other revenues (-0.17 €/SU).
The share of the regulatory result (see items 10 to 14) in the AUCU (before the deduction of other revenues) is 8.2%.
LGS net gain/loss on activity in the Latvia en route charging zone in the year 2024
LGS reported a net gain of +0.9 M€, as a combination of a gain of +0.4 M€ arising from the cost sharing mechanism, with a gain of +0.2 M€ arising from the traffic risk sharing mechanism and a gain of +0.2 M€ relating to financial incentives.
LGS 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 (+0.9 M€) and the actual RoE (+1.1 M€) amounts to +2.0 M€ (8.5% of the en route revenues). The resulting ex-post rate of return on equity is 9.0%, which is higher than the 5.0% planned in the PP.
RP3 summary
When considering the whole of RP3 (2020-2024), LGS generated a cumulative gain in respect of cost sharing of +5.1 M€, as actual total costs for RP3 were lower than planned. The traffic risk sharing mechanism generated a gain of +0.1 M€. Adding the gain of +0.6 M€ to be retained by the ATSP in respect of financial incentives and the actual RoE (+5.8 M€ over RP3) leads to an overall regulatory result of +11.6 M€, which corresponds to an average ex-post rate of return on equity of 11.2% (compared to 5.6% initially planned in the PP).