Cost-efficiency - Netherlands

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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 142 74 85 94
Determined costs 143 75 78 80
Difference costs -2 -1 7 14
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 terminal AUC was +6.3% (or +11.27 €2017) higher than the planned DUC. This results from the combination of higher than planned terminal costs in real terms (+4.1%, or +3.0 M€2017) and lower than planned TNSUs (-2.0%). It should be noted that the actual inflation index in 2024 was +17.9 p.p. higher than planned.

Terminal service units

The difference between actual and planned TNSUs (-2.0%) falls inside the ±2% dead-band. Hence, the loss of terminal revenues is borne by the ANSPs (see items 10 to 14).

Terminal costs by entity

Actual real terminal costs are +4.1% (+3.0 M€2017) higher than planned. This is the result of higher costs for the main ANSP, LVNL (+4.0%, or +2.8 M€2017) and the MET service provider (+6.3%, or +0.1 M€2017).

Terminal costs for the main ANSP at charging zone level

Higher than planned terminal costs in real terms for LVNL in 2024 (+4.0%, or +2.8 M€2017) result from:
- Higher staff costs (+3.6%), 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,
- Lower other operating costs (-3.4%) due to inflation index impact (+17.9 p.p.) since in nominal terms costs are significantly higher than planned (+12.1%) primarily driven by the cumulative impact of inflation, increased expenditures on maintenance, licensing, and outsourced initial training services,
- Significantly lower depreciation (-15.2%), due to the “delayed implementation of the remote tower at two regional airports”,
- Significantly higher cost of capital (+653.9%), due to higher average interest rates on debts than planned (4.92% vs 0.76% planned) and higher asset base.

RP3 summary

When considering the whole of RP3 (2020-2024) for Netherlands terminal charging zone, actual TNSUs are +0.8% higher than planned, while actual costs in real terms are -2.4% lower than the determined costs (some -8.4 M€2017). As a result, the weighted average actual unit cost over RP3 (218.56 €2017) is -3.1% lower than planned in the PP (225.66 €2017).

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

AUCU components (€/SU) – 2024
Components of the AUCU in 2024 €/SU
DUC 198.32
Inflation adjustment 27.96
Cost exempt from cost-sharing -3.65
Traffic risk sharing adjustment 0.03
Traffic adj. (costs not TRS) 0.13
Finantial incentives 0.98
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -0.71
Application of lower unit rate 0.00
Total adjustments 24.73
AUCU 223.05
AUCU vs. DUC + 12.5%
Cost exempt from cost sharing by item - 2024 €'000 €/SU
New and existing investments -2,530.8 -6.44
Competent authorities and qualified entities costs 0.0 0.00
Eurocontrol costs 0.0 0.00
Pension costs -628.0 -1.60
Interest on loans 1,723.0 4.39
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -1,435.8 -3.65

The actual terminal unit cost incurred by airspace users (AUCU) in respect of activities performed in 2024 (223.05 €) is +12.5% higher than the nominal DUC (198.32 €). The difference between these two figures (+24.73 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+27.96 €/SU);
- the impact of adjustments resulting from the costs exempted from cost sharing mechanism (-3.65 €/SU);
- the addition of the traffic risk sharing adjustments (+0.03 €/SU);
- the addition of the traffic adjustment (+0.13 €/SU) for the costs not subject to traffic risk sharing;
- financial incentives (+0.98 €/SU); and
- the deduction of other revenues (-0.71 €/SU).
The share of the regulatory result (see items 10 to 14) in the AUCU (before the deduction of other revenues) is -6.8%.

Regulatory result (RR)

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

LVNL reported a net loss of -5.8 M€, as a combination of a loss of -4.6 M€ arising from the cost sharing mechanism, with a loss of -1.5 M€ arising from the traffic risk sharing mechanism and a gain of +0.4 M€ relating to financial incentives.

LVNL overall regulatory result (RR) for the terminal 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 terminal activity mentioned above (-5.8 M€) and corresponds to -6.8% of the terminal revenues.

RP3 summary

When considering the whole of RP3 (2020-2024), LVNL generated a cumulative gain in respect of cost sharing of +8.3 M€ on the terminal activity, as actual total terminal costs for the RP3 were lower than planned. The traffic risk sharing mechanism generated a net loss of -0.1 M€ over the reference period. Adding the gain of +0.4 M€ to be retained by LVNL in respect of financial incentives leads to an overall regulatory result of +8.6 M€.