Cost-efficiency - Malta

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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 9 5 4 6
Determined costs 10 6 6 7
Difference costs -2 -1 -2 0
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 4.7% 2.8% 2.1%
Determined inflation index NA 109.7 112.8 115.1
Actual inflation rate NA 6.1% 5.6% 2.4%
Actual inflation index NA 111.2 117.4 120.2
Difference inflation index (p.p.) NA +1.5 +4.6 +5.1

AUC vs. DUC

In 2024, the terminal AUC was -23.6% (or -39.27 €2017) lower than the planned DUC. This results from the combination of significantly higher than planned TNSUs (+18.0%) and significantly lower than planned terminal costs in real terms (-9.8%, or -0.6 M€2017). It should be noted that the actual inflation index in 2024 was +5.1 p.p. higher than planned.

Terminal service units

The difference between actual and planned TNSUs (+18.0%) falls outside 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

Actual real terminal costs are -9.8% (-0.6 M€2017) lower than planned. This is the result of lower costs for the main ANSP, MATS (-15.1%, or -0.8 M€2017) and and higher costs for the other ANSP (Malta International Airport - MIA, +40.2%, or +0.2 M€2017) while the NSA costs were in line with the plan.

Terminal costs for the main ANSP at charging zone level

Significantly lower than planned terminal costs in real terms for MATS in 2024 (-15.1%, or -0.8 M€2017) result from:
- Significantly higher than planned staff costs (+9.3%), mainly due to “increase in headcount, collective agreement increases awarded to all staff and a redistribution exercise carried out to identify job duties and re-allocated between En-Route and Terminal Costs”,
- Significantly lower than planned other operating costs (-57.1%),
- Significantly lower than planned depreciation (-63.7%), mainly due to “an extensive exercise to allocate depreciation (…) according to usage of asset between En-Route and TNC”,
- Significantly higher than planned cost of capital (+211.9%), mainly due to “the increase in the net current asset value”.

RP3 summary

When considering the whole of RP3 (2020-2024) for Malta terminal charging zone, actual TNSUs are +5.9% higher than planned, while actual costs in real terms are -17.5% lower than the determined costs (some -4.7 M€2017). As a result, the weighted average actual unit cost over RP3 (155.27 €2017) is -22.1% lower than planned in the PP (199.37 €2017).

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

AUCU components (€/SU) – 2024
Components of the AUCU in 2024 €/SU
DUC 185.38
Inflation adjustment 5.35
Cost exempt from cost-sharing -8.04
Traffic risk sharing adjustment -19.58
Traffic adj. (costs not TRS) -2.39
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 -24.64
AUCU 160.74
AUCU vs. DUC -13.3%
Cost exempt from cost sharing by item - 2024 €'000 €/SU
New and existing investments -341.4 -8.04
Competent authorities and qualified entities costs 0.0 0.00
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 -341.4 -8.04

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2024 (160.74 €) is -13.3% lower than the nominal DUC (185.38 €). The difference between these two figures (-24.64 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+5.35 €/SU);
- the impact of adjustments resulting from the costs exempted from cost sharing mechanism (-8.04 €/SU);
- the deduction of the traffic risk sharing adjustments (-19.58 €/SU); and
- the deduction of the traffic adjustment (-2.39 €/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 14.4%.

Regulatory result (RR)

MATS net gain on activity in the Malta terminal charging zone in the year 2024

MATS reported a net gain of +0.8 M€, as a combination of a gain of +0.5 M€ arising from the cost sharing mechanism, with a gain of +0.2 M€ arising from the traffic risk sharing mechanism.

MATS overall regulatory result (RR) for the terminal activity

Ex-post, the overall RR taking into account the net gain from the terminal activity mentioned above (+0.8 M€) and the actual RoE (+0.4 M€) amounts to +1.2 M€ (20.0% of the terminal revenues). The resulting ex-post rate of return on equity is 12.1%, which is higher than the 4.0% planned in the PP.

RP3 summary

When considering the whole of RP3 (2020-2024), MATS generated a cumulative gain in respect of cost sharing of +3.6 M€, as actual total costs for RP3 were lower than planned. The traffic risk sharing mechanism generated gain of +0.4 M€. Adding the actual RoE (+0.7 M€ over RP3) leads to an overall regulatory result of +4.7 M€, which corresponds to an average ex-post rate of return on equity of 26.1% (compared to 4.2% initially planned in the PP).