Cost-efficiency - Netherlands

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PRB monitoring

▪ The en route 2024 actual unit cost of the Netherlands was 82.52€2017, +15% higher than the determined unit cost (71.66€2017). The terminal 2024 actual unit cost was 191.16€2017, +6.3% higher than the determined unit cost (179.88€2017).

▪ The en route 2024 actual service units (3.0M) were -8.5% lower than the determined service units (3.3M).

▪ The en route 2024 actual total costs were +13M€2017 (+5.3%) higher than determined. This difference is mainly driven by significant differences in other operating costs and the cost of capital. Other operating costs for LVNL were +14M€2017 (+45%) higher than the determined costs mainly due to the cumulated effect of increased inflation, maintenance and licencing costs. The cost of capital (+7.4M€2017, or +653%) is higher than planned due to higher interest rates.

▪ LVNL costs of investments were 31M€2017 in 2024 for both en route and terminal charging zones, -15% lower than determined (36M€2017). This was mainly d ue to lower depreciation costs driven by the delay of the implementation of iCAS project.

▪ The en route actual unit cost incurred by users in 2024 was 92.89€ (+18% higher than the 2024 DUC), while the terminal actual unit cost incurred by users in 2024 was 223.05€ (+12% higher than the 2024 DUC). These differences between the AUCU and the DUC for both en route and terminal charging zones are primarily attributed to the inflation adjustment.

▪ The en route regulatory result for LVNL amounted to -25M€. The loss is mainly attributable to the cost risk sharing mechanism, in particular the negative difference between determined and actual costs to be borne by the ANSP.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 474 245 281 309
Determined costs 478 246 253 259
Difference costs -4 -1 28 50
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 1.5% 1.6% 1.6%
Determined inflation index NA 108.6 110.3 112.1
Actual inflation rate NA 11.6% 4.1% 3.2%
Actual inflation index NA 121 126 130
Difference inflation index (p.p.) NA +12.5 +15.7 +17.9

AUC vs. DUC

In 2024, the en route AUC was +15.2% (or +10.86 €2017) higher than the planned DUC. This results from the combination of significantly lower than planned TSUs (-8.5%) and significantly higher than planned en route costs in real terms (+5.3%, or +12.6 M€2017). It should be noted that the actual inflation index in 2024 was +17.9 p.p. higher than planned.

En route service units

The difference between actual and planned TSUs (-8.5%) falls outside the ±2% dead-band, but does not exceed the ±10% threshold foreseen in the traffic risk sharing mechanism. The resulting loss of en route revenues is therefore shared between the ANSP and the airspace users (see the main ANSP loss in Box 11).

En route costs by entity

Actual real en route costs are +5.3% (+12.6 M€2017) higher than planned. This is the result of higher costs for the main ANSP, LVNL (+9.5%, or +15.7 M€2017) and the MET service provider (+5.5%, or +0.6 M€2017) and lower costs for the NSA/EUROCONTROL (-1.1%, or -0.2 M€2017) and the other ANSP (MUAC, -8.0%, or -3.4 M€2017).

En route costs for the main ANSP at charging zone level

Significantly higher than planned en route costs in real terms for LVNL in 2024 (+9.5%, or +15.7 M€2017) result from:
- Slightly lower staff costs (-0.5%), due to inflation index impact (+17.9 p.p.) since in nominal terms staff costs are significantly higher than planned (+15.4%), driven by a combination of factors: wage adjustments under the collective agreement to address significant inflation in RP3, expenses for capacity-enhancing measures and increased early retirement payments to ATCOs,
- Significantly higher other operating costs (+44.7%), primarily driven by the cumulative impact of inflation, increased expenditures on maintenance, licensing and outsourced initial training services, partially mitigated by reduced costs related to the recruitment of external personnel,
- Significantly lower depreciation (-19.2%), due to the “delayed implementation of iCAS”, and
- Significantly higher cost of capital (+653.1%), due to higher average interest rates on debts than planned (3.02% vs 0.35% planned).

RP3 summary

When considering the whole of RP3 (2020-2024) for Netherlands en route charging zone, actual TSUs are -4.1% lower than planned, while actual costs in real terms are -1.3% lower than the determined costs (some -14.9 M€2017). As a result, the weighted average actual unit cost over RP3 (99.19 €2017) is +2.9% higher than planned in the PP (96.42 €2017).

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

AUCU components (€/SU) – 2024
Components of the AUCU in 2024 €/SU
DUC 78.65
Inflation adjustment 11.35
Cost exempt from cost-sharing 0.45
Traffic risk sharing adjustment 3.47
Traffic adj. (costs not TRS) 0.84
Finantial incentives 0.00
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -1.87
Application of lower unit rate 0.00
Total adjustments 14.24
AUCU 92.89
AUCU vs. DUC + 18.1%
Cost exempt from cost sharing by item - 2024 €'000 €/SU
New and existing investments -5,506.7 -1.83
Competent authorities and qualified entities costs -85.0 -0.03
Eurocontrol costs -117.8 -0.04
Pension costs -1,040.5 -0.35
Interest on loans 8,117.6 2.69
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing 1,367.7 0.45

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2024 (92.89 €) is +18.1% higher than the nominal DUC (78.65 €). The difference between these two figures (+14.24 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+11.35 €/SU);
- the impact of adjustments resulting from the costs exempted from cost sharing mechanism (+0.45 €/SU);
- the addition of the traffic risk sharing adjustments (+3.47 €/SU);
- the addition of the traffic adjustment (+0.84 €/SU) for the costs not subject to traffic risk sharing; and
- the deduction of other revenues (-1.87 €/SU).
The share of the regulatory result (see items 10 to 14) in the AUCU (before the deduction of other revenues) is -8.2%.

Regulatory result (RR)

LVNL net gain/loss on activity in the Netherlands en route charging zone in the year 2024

LVNL reported a net loss of -25.3 M€, as a combination of a loss of -18.1 M€ arising from the cost sharing mechanism, with a loss of -7.2 M€ arising from the traffic risk sharing mechanism.

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

It should be noted that LVNL has no equity and its assets are entirely financed through debt. Therefore, ex-post, the overall RR is equal to the net loss from the en route activity mentioned above (-25.3 M€) and corresponds to -12.6% of the en route revenues.

RP3 summary

When considering the whole of RP3 (2020-2024), LVNL generated a cumulative gain in respect of cost sharing of +2.4 M€, as actual total costs for the RP3 were lower than planned. The traffic risk sharing mechanism generated a net loss of -8.8 M€ over the reference period which leads to an overall regulatory result of -6.4 M€.