Cost-efficiency - Poland

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PRB monitoring

▪ The en route 2024 actual unit cost of Poland was 52.20€2017, +36% higher than the determined unit cost (38.35€2017). The terminal zone 1 2024 actual unit cost was 110.06€2017, +5.7% higher than the determined unit cost (104.10€2017), while the terminal zone 2 2024 actual unit cost was 223.66€2017, +3.5% higher than the determined unit cost (216.11€2017).

▪ The en route 2024 actual service units of Poland (3.8M) were -25% lower than the determined service units (5.1M), mainly due to shifted traffic flows caused by Russia’s war of aggression against Ukraine.

▪ The en route 2024 actual total costs were +2.9M€2017, (+1.5%) higher than determined. This difference is driven by higher staff costs for PANSA (+6.4M€2017, or +6.1%) than determined. The NSA noted that it is mainly due to higher salaries driven by changes to remuneration regulations.

▪ PANSA costs of investments were 49M€2017 in 2024 for both en route and terminal charging zones, almost in line with the determined (-0.8%). This small difference is mainly due to the postponement and revision of some projects.

▪ The en route actual unit cost incurred by users in 2024 was 61.69€ (+43% higher than the 2024 DUC), while the terminal zone 1 actual unit cost incurred by users in 2024 was 130.59€ (+10% higher than the 2024 DUC) and 228.69€ (-6.8% lower than the 2024 DUC) for terminal zone 2. The differences between the AUCU and the DUC for en route charging zone can be primarily attributed to lower traffic than expected. For terminal zone 1 charging zone, it is mainly resulting from the positive inflation adjustment.

▪ Poland’s RP3 performance plan included justifications for a deviation to achieve the RP3 capacity targets. The main measures included recruiting of new ATCOs. Poland has not submitted a detailed report of the capacity-related measures implemented. However, the number of ATCOs in operation at the end of RP3 is below the plan. Poland should reimburse to airspace users the excess funds received by ANSPs for measures not implemented.

En route charging zone

Unit cost (KPI#1)

Actual and determined data
Total costs - nominal (M€) 2020-2021 2022 2023 2024
Actual costs 330 202 233 267
Determined costs 377 206 215 223
Difference costs -47 -4 18 44
Inflation assumptions 2020-2021 2022 2023 2024
Determined inflation rate NA 2.5% 2.5% 2.5%
Determined inflation index NA 113.4 116.2 119.1
Actual inflation rate NA 13.2% 10.9% 3.7%
Actual inflation index NA 127.6 141.5 146.7
Difference inflation index (p.p.) NA +14.2 +25.3 +27.6

AUC vs. DUC

In 2024, the en route AUC was +36.1% (or +59.22 PLN2017, +13.92 €2017) higher than the planned DUC. This results from the combination of significantly lower than planned TSUs (-25.4%) and higher than planned en route costs in real terms (+1.6%, or +13.5 MPLN2017, +3.2 M€2017). It should be noted that the actual inflation index in 2024 was +27.6 p.p. higher than planned.

En route service units

The difference between actual and planned TSUs (-25.4%) falls outside 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 +1.6% (+3.2 M€2017) higher than planned. This is the result of higher costs for the main ANSP, PANSA (+2.3%, or +4.1 M€2017) and lower costs for the NSA/EUROCONTROL (-2.4%, or -0.4 M€2017), and the MET service providers (-6.9%, or -0.5 M€2017).

En route costs for the main ANSP at charging zone level

Higher than planned en route costs in real terms for PANSA in 2024 (+2.3%, or +4.1 M€2017) result mainly from:
- Higher staff costs (+6.1%) explained by “salary increases to maintain PANSA competitiveness, which followed from labour market developments in the Polish economy, and additional staff costs driven by significant increase in inflation rates”.
- Lower other operating costs (-1.8%) in real terms due to the impact of the inflation index (+27.6 p.p.) since, in nominal terms, operating costs were significantly above the plan (+20.9%) reflecting higher costs of materials, energy, maintenance, training and travel.
- Lower depreciation (-6.0%) reflecting slower than planned execution of the investment plan over the previous years.
- Slightly higher cost of capital (+0.1%) resulting from significant increase in interest rate on debt which compensated lower than planned level of asset base.

RP3 summary

When considering the whole of RP3 (2020-2024) for Poland en route charging zone, actual TSUs are -18.1% lower than planned, while actual costs in real terms are -7.8% lower than the determined costs (some -306.8 MPLN2017 or -72.1 M€2017). As a result, the weighted average actual unit cost over RP3 (239.87 PLN2017 or 56.38 €2017) is +12.6% higher than planned in the PP (213.05 PLN2017 or 50.07 €2017).

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

AUCU components (€/SU) – 2024
Components of the AUCU in 2024 €/SU
DUC 43.07
Inflation adjustment 9.93
Cost exempt from cost-sharing -0.38
Traffic risk sharing adjustment 10.84
Traffic adj. (costs not TRS) 1.60
Finantial incentives -1.03
Modulation of charges 0.00
Cross-financing 0.00
Other revenues -1.84
Application of lower unit rate 0.00
Total adjustments 19.12
AUCU 62.19
AUCU vs. DUC + 44.4%
Cost exempt from cost sharing by item - 2024 €'000 €/SU
New and existing investments -1,329.4 -0.35
Competent authorities and qualified entities costs 721.3 0.19
Eurocontrol costs -1,074.9 -0.28
Pension costs 0.0 0.00
Interest on loans 234.9 0.06
Changes in law 0.0 0.00
Total cost exempt from cost risk sharing -1,448.2 -0.38

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2024 (267.50 PLN or 62.19 €) is +44.4% higher than the nominal DUC (185.27 PLN or 43.07 €). The difference between these two figures (+82.23 PLN/SU or +19.12 €/SU) is due to:
- the positive inflation adjustment resulting from higher than planned inflation (+42.70 PLN/SU or +9.93 €/SU);
- the impact of adjustments resulting from the costs exempted from cost sharing mechanism (-1.63 PLN/SU or -0.38 €/SU);
- the addition of the traffic risk sharing adjustments (+46.63 PLN/SU or +10.84 €/SU);
- the addition of the traffic adjustment (+6.87 PLN/SU or +1.60 €/SU) for the costs not subject to traffic risk sharing;
- financial incentives (-4.43 PLN/SU or -1.03 €/SU); and
- the deduction of other revenues (-7.91 PLN/SU or -1.84 €/SU).
The share of the regulatory result (see items 10 to 14) in the AUCU (before the deduction of other revenues) is -3.6%.

Regulatory result (RR)

PANSA net gain/loss on activity in the Poland en route charging zone in the year 2024

PANSA reported a net loss of -87.0 MPLN, as a combination of a loss of -32.8 MPLN arising from the cost sharing mechanism, with a loss of -37.3 MPLN arising from the traffic risk sharing mechanism and a loss of -16.9 MPLN relating to financial incentives.

PANSA 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 (-87.0 MPLN) and the actual RoE (+45.8 MPLN) amounts to -41.2 MPLN (-4.4% of the en route revenues). The resulting ex-post rate of return on equity is negative (-4.6%).

RP3 summary

When considering the whole of RP3 (2020-2024), PANSA generated a cumulative gain in respect of cost sharing of +329.4 MPLN, as actual total costs for RP3 were lower than planned. The traffic risk sharing mechanism generated loss of -96.2 MPLN. Adding the loss of -33.2 MPLN to be retained by the ATSP in respect of financial incentives and the actual RoE (+186.2 MPLN over RP3) leads to an overall regulatory result of +386.2 MPLN, which corresponds to an average ex-post return on equity of 8.0% (compared to 3.9% initially planned in the PP).