Cost-efficiency - Malta

PRB monitoring

The en route 2025 actual unit cost of Malta was 14.96€2022, -15.0% lower than the determined unit cost (17.61€2022). The terminal 2025 actual unit cost was 126.68€2022,

-10.8% lower than the determined unit cost (142.05€2022).

The en route 2025 actual service units (1.3M) were +10.5% higher than the determined service units (1.2M).
The en route 2025 actual total costs were -1.2M€2022 (-6.1%) lower than determined. This is mainly due to lower staff costs (-0.9M€2022, or -7.5%) and other operating costs (-0.7M€2022, or -26.8%) for MATS. According to the NSA, staff costs decreased mainly due to retirements exceeding plan and a delay in recruitment, while the reduction in other operating costs was mainly due to lower insurance costs.
MATS spent 3.0M€2022 in 2025 related to costs of investments for both en route and terminal charging zones, +4.6% more than determined (2.8M€2022). According to the NSA, this increase is due greater investments in assets subject to higher depreciation than planned.
The en route actual unit cost incurred by users in 2025 was 17.48€ (-8.1% below the 2025 DUC), while the terminal actual unit cost incurred by users was 88.29€ (-42.6% below the 2025 DUC). The difference between the AUCU and the DUC for the en route charging zone is mainly driven by traffic risk sharing adjustments. The difference between the AUCU and the DUC for the terminal charging zone is mainly driven by new and existing investments in cost exempt from cost sharing.
The en route regulatory result for MATS amounted to +3.7M€, or 18.5% of the 2025 revenue. This may indicate that the airspace users are charged for costs which have not materialised in 2025.

En route charging zone

Unit cost (KPI#1)

Total costs - nominal (M€)	2025	2026	2027	2028	2029
Actual and determined data
Determined costs	22.1	22.6	26.2	28.8	33.3
Actual costs	20.7	NA	NA	NA	NA
Difference costs	-1.4	NA	NA	NA	NA

Inflation assumptions	2025	2026	2027	2028	2029
Determined inflation rate	2.1%	2.0%	2.0%	2.0%	2.0%
Determined inflation index*	110.9	113.2	115.4	117.7	120.1
Actual inflation rate	2.4%	NA	NA	NA	NA
Actual inflation index*	110.7	NA	NA	NA	NA
Difference inflation index (p.p.)	-0.2	NA	NA	NA	NA
*100 = 2022

Focus on unit cost

AUC vs. DUC

In 2025, the en route AUC was -15.0% (or -2.65 €2022) lower than the planned DUC. This results from the combination of significantly higher than planned TSUs (+10.5%) and significantly lower than planned en route costs in real terms (-6.1%, or -1.2 M€2022).

En route service units

The difference between actual and planned TSUs (+10.5%) falls outside the ±10% threshold foreseen in the traffic risk sharing mechanism. The resulting gain of additional en route revenues is therefore shared between the ANSP and the airspace users (see the main ANSP regulatory result).

En route costs by entity

Actual real en route costs are -6.1% (-1.2 M€2022) lower than planned. This is the result of lower costs for the main ANSP, MATS (-6.1%, or -1.0 M€2022), the NSA/EUROCONTROL (-6.8%, or -0.2 M€2022) and the MET service providers (-3.7%, or -0.03 M€2022).

En route costs for the main ANSP (MATS) at charging zone level

Based on the additional information to the en route reporting tables, the significantly lower than planned en route costs in real terms for MATS in 2025 (-6.1%, or -1.0 M€2022) result from:

Significantly lower than planned staff costs (-7.5%), mainly due to higher than planned retirements and delays in the implementation of the 2025 recruitment plan.
Significantly lower than planned other operating costs (-26.8%), mainly due to lower than planned aviation insurance costs and other services.
Significantly higher than planned depreciation (+10.6%), mainly due to higher than planned asset investments generating higher depreciation costs than forecasted.
Significantly higher than planned cost of capital (+40.4%), mainly due to a higher than expected asset base in 2025.

Assessment of the actual performance in the charging zone reported by the NSA

The NSA of Malta provides the following overall assessment of the actual performance in 2025 at charging zone level:

“The 2025 en-route cost-efficiency outturn is favourable. Based on the reporting tables reviewed by the NSA, total actual costs for the Malta en-route charging zone were materially below the determined cost base for 2025. The main drivers were lower staff costs and lower other operating costs, partly offset by higher depreciation and higher cost of capital. Actual en-route service units were significantly above forecast, which is also relevant for the evolution of unit cost and the treatment of traffic-related adjustments under the charging scheme.”

Explanation of the differences between actual and determined costs at charging zone level reported by the NSA

The NSA provides the following explanation for the differences between actual and determined costs in the charging zone:

“For 2025, total actual en-route costs amounted to EUR 19.119 million compared with determined costs of EUR 22.134 million, i.e. EUR 3.015 million below plan. Within this total, MATS actual costs were EUR 1.228 million below determined costs, mainly due to lower staff costs (higher retirements and delayed recruitment) and lower other operating costs, partly offset by higher depreciation and cost of capital. MET actual costs were slightly below determined costs overall. NSA costs were also materially below determined costs relative to the performance plan assumptions. Actual service units were 1,286.235 thousand compared with 1,163.668 thousand forecast (+10.5%).”

[It should be noted that some of the amounts indicated by the NSA in the analysis cited above differ from the amounts reported in the respective data tables in the same NSA Monitoring Report and in the submission of en route reporting tables (both of which are aligned).]

Recommendations formulated by the NSA to the ANSP (MATS) to rectify the situation and actions taken by the ANSP

The NSA 2025 monitoring report indicates the following recommendations formulated by the NSA:

“The NSA does not consider immediate corrective action necessary in relation to the 2025 en-route outturn, as the overall variance is favourable for users and the provider’s narrative is consistent with the reporting tables. The NSA will nevertheless continue to monitor recruitment delivery, execution of investment plans and the risk of deferred expenditure materialising in later RP4 years, particularly in relation to major ATM and infrastructure projects.”

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

	€/SU
AUCU components (€/SU) – 2025
DUC	19.02
Inflation adjustment	-0.02
Cost exempt from cost sharing	0.28
Traffic risk sharing adjustment	-0.88
Traffic adjustment (costs not TRS)	-0.29
Financial incentives	0.00
Modulation of charges	0.00
Cross-financing	0.00
Other revenues	-0.62
Application of lower unit rate	0.00
Total adjustments	-1.54
AUCU	17.48
AUCU vs. DUC	-8.1%

Cost exempt from cost sharing by item - 2025	€'000	€/SU
New and existing investments	544.3	0.42
Competent authorities and qualified entities costs	-172.1	-0.13
Eurocontrol costs	-9.4	-0.01
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	362.8	0.28

Focus on AUCU

En route AUCU monitoring at charging zone level

The actual en route unit cost incurred by airspace users (AUCU) in respect of activities performed in 2025 (17.48 €) is -8.1% lower than the nominal DUC (19.02 €). The difference between these two figures (-1.54 €/SU) is due to:

the negative inflation adjustment resulting from lower than planned inflation (-0.02 €/SU);
the impact of adjustments resulting from the costs exempted from cost sharing mechanism (+0.28 €/SU);
the deduction of the traffic risk sharing adjustments (-0.88 €/SU);
the deduction of the traffic adjustment (-0.29 €/SU) for the costs not subject to traffic risk sharing; and,
the deduction of other revenues (-0.62 €/SU).

The share of the regulatory result (see next sub-section) in the AUCU (before the deduction of other revenues) is 16.1%.

Costs exempt from cost sharing for 2025 presented here are based on preliminary figures and remain subject to revision pending the receipt of the NSA Report on the verification of cost sharing. Any changes may affect the analysis of Actual Costs for Users and the Regulatory Results.

Initiatives implemented or planned that will improve this PI reported by the NSA

The NSA of Malta provides the following information regarding the initiatives:

“The favourable 2025 en-route actual unit cost incurred by users is supported by (i) actual costs below the determined cost base and (ii) actual service units above forecast. To support sustainable performance over RP4, the main initiatives remain the disciplined implementation of the RP4 investment programme, timely recruitment and training, and continued operational coordination with network partners. The NSA will monitor effectiveness through annual review of actual costs, service units, unit rates and the traffic- and inflation-related adjustments applied under the charging scheme.”

Regulatory result (RR)

Focus on regulatory result

MATS net gain/loss on activity in the Malta en route charging zone in 2025

MATS reported a net gain of +2.6 M€, as a combination of a gain of +1.7 M€ arising from the cost sharing mechanism, with a gain of +0.8 M€ arising from the traffic risk sharing mechanism.

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

Ex-post, the overall RR, taking into account the net gain from the en route activity mentioned above (+2.6 M€) and the actual RoE (+1.1 M€), amounts to +3.7 M€ (18.5% of the en route revenues). The resulting ex-post rate of return on equity is 16.8%, which is higher than the 5.1% planned in the PP.