Cost-efficiency - Lithuania

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▪ The en route 2024 actual unit cost of Lithuania was 44.07€2017, -4.1% lower than the determined unit cost (45.96€2017). Lithuania does not have a terminal charging zone.

▪ The en route 2024 actual service units (0.5M) were +5.0% higher than the determined service units (0.4M).

▪ The en route 2024 actual total costs were +0.1M€2017 (+0.7%) higher than determined. The difference is the result of an increase in staff costs for SE Oro Navigacija (+0.5M €2017, or +4.8%), partially offset by a decrease in depreciation costs (-0.5M €2017, or -15%). The NSA stated that these deviations are attributable to changes in cost-allocation between en-route and terminal of shared administrative and other costs.

▪ SE Oro Navigacija costs of investments were 3.7M€2017 in 2024, -19% less than determined (4.6M€2017). The main driver is a lower than determined depreciation (-0.5M €2017, or -15%). According to the NSA, this reduction is due to a change in cost-allocation key, similarly for the other cost categories, and delays on planned investments.

▪ The en route actual unit cost incurred by users in 2024 was 56.60€ (-5.6% below the 2024 DUC). The difference between the AUCU and the DUC for the en route charging zone is mainly driven by the cost risk sharing adjustment.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 41 22 24 26
Determined costs 40 22 25 26
Difference costs 1 0 -1 0
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 17.9% 8.5% 3.0%
Determined inflation index NA 130.6 141.7 146
Actual inflation rate NA 18.9% 8.7% 0.9%
Actual inflation index NA 131.7 143.2 144.5
Difference inflation index (p.p.) NA +1.1 +1.5 -1.5

AUC vs. DUC

In 2024, the en route AUC was -4.1% (or -1.89 €2017) lower than the planned DUC. This results from the combination of significantly higher than planned TSUs (+5.0%) and slightly higher than planned en route costs in real terms (+0.7%, or +0.1 M€2017).

En route service units

The difference between actual and planned TSUs (+5.0%) 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

Actual real en route costs are +0.7% (+0.1 M€2017) higher than planned. This is the result of slightly higher costs for the main ANSP, Oro Navigacija (+0.3%, or +0.1 M€2017), the MET service provider (+7.2%, or +0.04 M€2017), the NSA/EUROCONTROL (+2.4%, or +0.1 M€2017) and slightly lower costs for the other ANSP (LGS -Ninta Adaxa, -1.3%).

En route costs for the main ANSP at charging zone level

Slightly higher than planned en route costs in real terms for Oro Navigacija in 2024 (+0.3%, or +0.1 M€2017) result from:
- Higher staff costs (+4.8%), which is reported to reflect growth of average salaries and changes in cost-allocation between en-route and terminal of shared administrative and other overhead costs.
- Higher other operating costs (+5.6%) reflecting the combination of above-described changes in cost-allocation, higher costs of goods and services and higher maintenance and servicing expenses for the main ATM system.
- Significantly lower depreciation (-15.1%) due to delays in the execution of investment plan.
- Significantly lower cost of capital (-16.1%) resulting from lower level of asset base.
- Exceptional costs which were not foreseen in the PP reflecting correction of accounting errors from 2023 related to “cost accounting principles requested by independent financial auditor during annual audit procedure”.

RP3 summary

When considering the whole of RP3 (2020-2024) for Lithuania en route charging zone, actual TSUs are +1.6% higher than planned, while actual costs in real terms are -0.7% lower than the determined costs (some -0.6 M€2017). As a result, the weighted average actual unit cost over RP3 (47.37 €2017) is -2.2% lower than planned in the PP (48.45 €2017).

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

AUCU components (€/SU) – 2024
Components of the AUCU in 2024 €/SU
DUC 59.97
Inflation adjustment -0.43
Cost exempt from cost-sharing -1.77
Traffic risk sharing adjustment -1.09
Traffic adj. (costs not TRS) -0.30
Finantial incentives 0.50
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -0.28
Application of lower unit rate 0.00
Total adjustments -3.37
AUCU 56.60
AUCU vs. DUC -5.6%
Cost exempt from cost sharing by item - 2024 €'000 €/SU
New and existing investments -854.7 -1.87
Competent authorities and qualified entities costs 60.2 0.13
Eurocontrol costs -14.0 -0.03
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 -808.5 -1.77

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2024 (56.60 €) is -5.6% lower than the nominal DUC (59.97 €). The difference between these two figures (-3.37 €/SU) is due to:
- the negative inflation adjustment resulting from lower than planned inflation (-0.43 €/SU);
- the impact of adjustments resulting from the costs exempted from cost sharing mechanism (-1.77 €/SU);
- the deduction of the traffic risk sharing adjustments (-1.09 €/SU);
- the deduction of the traffic adjustment (-0.30 €/SU) for the costs not subject to traffic risk sharing;
- financial incentives (+0.50 €/SU); and
- the deduction of other revenues (-0.28 €/SU).
The share of the regulatory result (see items 10 to 14) in the AUCU (before the deduction of other revenues) is 3.8%.

Regulatory result (RR)

Oro Navigacija net gain/loss on activity in the Lithuania en route charging zone in the year 2024

Oro Navigacija reported a net loss of -0.4 M€, as a combination of a loss of -1.3 M€ arising from the cost sharing mechanism, with a gain of +0.7 M€ arising from the traffic risk sharing mechanism and a gain of +0.2 M€ relating to financial incentives.

Oro Navigacija overall regulatory result (RR) for the en route activity

Ex-post, the overall RR taking into account the net loss from the en route activity mentioned above (-0.4 M€) and the actual RoE (+1.4 M€) amounts to +1.0 M€ (4.4% of the en route revenues). The resulting ex-post rate of return on equity is 3.6%, which is lower than the 5.0% planned in the PP.

RP3 summary

When considering the whole of RP3 (2020-2024), Oro Navigacija generated a cumulative loss in respect of cost sharing of -0.7 M€, as actual total costs for RP3 were higher than planned. The traffic risk sharing mechanism generated a gain of +1.1 M€. Adding the gain of +0.4 M€ to be retained by the ATSP in respect of financial incentives and the actual RoE (+4.8 M€ over RP3) leads to an overall regulatory result of +5.6 M€, which corresponds to an average ex-post rate of return on equity of 3.5% (compared to 3.1% initially planned in the PP).