Cost-efficiency - Luxembourg

Download Report

Terminal charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 30 15 17 18
Determined costs 31 15 15 16
Difference costs -1 0 1 2
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 5.6% 2.6% 3.1%
Determined inflation index NA 113.3 119.1 122.8
Actual inflation rate NA 8.2% 2.9% 2.3%
Actual inflation index NA 116.1 119.4 122.2
Difference inflation index (p.p.) NA +2.8 +0.3 -0.7

AUC vs. DUC

In 2024, the terminal AUC was +25.4% (or +55.87 €2017) higher than the planned DUC. This results from the combination of significantly higher than planned terminal costs in real terms (+13.1%, or +1.7 M€2017) and significantly lower than planned TNSUs (-9.8%).

Terminal service units

The difference between actual and planned TNSUs (-9.8%) falls outside the ±2% dead-band, but does not exceed 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 +13.1% (+1.7 M€2017) higher than planned. This is the result of higher costs for the main ANSP, ANA (+13.1%, or +1.7 M€2017).

Terminal costs for the main ANSP at charging zone level

Significantly higher than planned terminal costs in real terms for ANA in 2024 (+13.1%, or +1.7 M€2017) result from:
- Significantly higher staff costs (+18.5%), due to a mandatory 1.49% salary rise for state-employed staff based on career progression. Additionally, staff numbers grew with new hires in several departments to meet rising demands. The full-year impact of experienced staff hired in late 2023 also contributed, as their salaries were adjusted upward after completing the induction period,
- Significantly higher other operating costs (+18.4%), mainly due to one-off expenses such as a study on the triple one concept with Eurocontrol, and temporary support contracts,
- Significantly lower depreciation (-17.4%), due to postponed or cancelled projects, such as the VCS and DVOR updates, the surveillance chain upgrade, and the WAN/LAN replacement, as well as staff still undergoing training, were not fully available for project implementation.

RP3 summary

When considering the whole of RP3 (2020-2024) for Luxembourg terminal charging zone, actual TNSUs are -3.9% lower than planned, while actual costs in real terms are +1.9% higher than the determined costs (some +1.3 M€2017). As a result, the weighted average actual unit cost over RP3 (286.28 €2017) is +6.0% higher than planned in the PP (270.10 €2017).

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

AUCU components (€/SU) – 2024
Components of the AUCU in 2024 €/SU
DUC 262.85
Inflation adjustment -1.40
Cost exempt from cost-sharing -7.49
Traffic risk sharing adjustment 14.16
Traffic adj. (costs not TRS) 3.20
Finantial incentives -0.73
Modulation of charges -1.93
Cross-financing 0.00
Other revenues -42.55
Application of lower unit rate 0.00
Total adjustments -36.72
AUCU 226.12
AUCU vs. DUC -14.0%
Cost exempt from cost sharing by item - 2024 €'000 €/SU
New and existing investments -346.0 -6.38
Competent authorities and qualified entities costs 0.0 0.00
Eurocontrol costs 0.0 0.00
Pension costs -60.2 -1.11
Interest on loans 0.0 0.00
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -406.2 -7.49

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2024 (226.12 €) is -14.0% lower than the nominal DUC (262.85 €). The difference between these two figures (-36.72 €/SU) is due to:
- the negative inflation adjustment resulting from lower than planned inflation (-1.40 €/SU);
- the impact of adjustments resulting from the costs exempted from cost sharing mechanism (-7.49 €/SU);
- the addition of the traffic risk sharing adjustments (+14.16 €/SU);
- the addition of the traffic adjustment (+3.20 €/SU) for the costs not subject to traffic risk sharing;
- financial incentives (-0.73 €/SU);
- the modulation of charges (-1.93 €/SU); and
- the deduction of other revenues (-42.55 €/SU).
The share of the regulatory result (see items 10 to 14) in the AUCU (before the deduction of other revenues) is -22.3%.

Regulatory result (RR)

ANA net gain/loss on activity in the Luxembourg terminal charging zone in the year 2024

ANA reported a net loss of -3.2 M€, as a combination of a loss of -2.6 M€ arising from the cost sharing mechanism, with a loss of -0.6 M€ arising from the traffic risk sharing mechanism and a loss of -0.04 M€ relating to financial incentives.

ANA overall regulatory result (RR) for the Luxembourg terminal charging zone activity

Ex-post, the overall RR taking into account the net loss from the terminal activity mentioned above (-3.2 M€) amounts to -3.2 M€ (-22.1% of the terminal revenues), as the RoE for ANA has been set to zero. The resulting ex-post rate of return on equity is negative (-25.3%).

RP3 summary

When considering the whole of RP3 (2020-2024), ANA generated a cumulative loss in respect of cost sharing of -3.7 M€, as actual total costs for RP3 were higher than planned. The traffic risk sharing mechanism generated a loss of -1.3 M€. Adding the actual RoE (+0.4 M€ over RP3) leads to an overall regulatory result of -4.6 M€, which corresponds to an average ex-post rate of return on equity of -7.1% (compared to 0.5% initially planned in the PP).