Article 22 -- Establishment of the cost base for charges

• Regulation (EU) 2019/317 found in: SKPI (2019/317) Safety Key Performance Indicators (Dec 2020)

Article 22 — Establishment of the cost base for charges Regulation (EU) 2019/317 1. The cost base for *en route* and terminal charges shall consist of the determined costs related to the provision of air navigation services in the charging zone concerned. Determined costs stemming from new ATM systems and major overhauls of existing ATM systems shall only be included in the cost base where those systems are consistent with the implementation of the European ATM Master Plan, and, in particular, with the common projects referred to in Article 15a(3) of Regulation (EC) No 550/2004. Member States may decide to include in the cost base the following determined costs incurred in relation to the provision of air navigation services, in accordance with the second sentence of point (b) of Article 15(2) of Regulation (EC) No 550/2004: (a) determined costs incurred by competent authorities; (b) determined costs incurred by the qualified entities referred to in Article 3 of Regulation (EC) No 550/2004; (c) determined costs stemming from the Eurocontrol International Convention relating to cooperation for the safety of air navigation of 13 December 1960 as last amended. 2. Without prejudice to [Article 18](#_DxCrossRefBm1409943977), the determined costs included in the cost bases for en route and terminal charges shall be set prior to the start of each reference period as part of the performance plan in real terms and specified for each calendar year of that period in real terms and in nominal terms, with the exception of the determined costs referred to in the third subparagraph of paragraph 1 and the determined costs referred to in points (c) and (d) of paragraph 4, which shall be set in nominal terms where historical cost accounting is applied. 3. Determined costs included in the cost bases for *en route* and terminal charges shall be calculated in national currency. Where a common charging zone with a single unit rate has been established, the Member States concerned shall ensure conversion of determined costs into a single currency, which may be the euro or another national currency of one of the Member States concerned to ensure a transparent calculation of the single unit rate in application of [Article 25(4)](#_DxCrossRefBm1409943996). 4. The determined costs included in the cost bases for *en route* and terminal charges shall consist of: (a) staff costs; (b) operating costs other than staff costs; (c) depreciation costs; (d) cost of capital; (e) exceptional costs; As regards point (a), staff costs shall include gross remuneration, overtime payments, and employers' contributions to social security schemes, as well as pension costs and costs of other benefits. Pension costs shall be calculated using prudent assumptions based on the applicable pension scheme or on national law, as appropriate. Those assumptions shall be specified in the performance plan. As regards point (b), operating costs other than staff costs shall include costs incurred for the purchase of goods and services used to provide air navigation services, including outsourced services, material, energy, utilities, rental of buildings, equipment and facilities, maintenance, insurance costs and travel expenses. As regards point (c), depreciation costs shall include costs related to the total fixed assets in operation for the purpose of providing air navigation services. The value of fixed assets shall be depreciated in accordance with their expected operating life, using the straight-line method applied to the costs of the assets being depreciated. Historical or current cost accounting shall be applied for the calculation of the depreciation. The methodology used to calculate depreciation costs shall not be altered during the duration of the depreciation and shall be consistent with the cost of capital applied, that is to say nominal cost of capital for historical cost accounting and real cost of capital for current cost accounting. Where current cost accounting is applied, the cost of capital shall not include inflation and the equivalent historical cost accounting figures shall also be provided to allow for comparison and assessment. As regards point (d), the cost of capital shall be equal to the product of the following elements: (i) the sum of the average net book value of fixed assets in operation or under construction and possible adjustments to total assets determined by the national supervisory authority and used by the air navigation service provider and of the average value of the net current assets, excluding interest-bearing accounts, that are required for the purposes of providing air navigation services; (ii) the weighted average of the interest rate on debts and of the return on equity. For air navigation service providers without any equity capital, the weighted average shall be calculated on the basis of a return applied to the difference between the total of the assets referred to in point (i) and the debts. For the purpose of establishing the cost of capital, the factors to which weight is to be given shall be based on the proportion of financing through either debt or equity. The interest rate on debts shall be equal to the weighted average interest rate on debts of the air navigation service provider. The return on equity shall be that provided in the performance plan for the reference period and shall be based on the financial risk incurred by the air navigation service provider. Where air navigation service providers incur costs from leasing fixed assets, those costs shall not be included in the calculation of cost of capital. As regards point (e), exceptional costs shall consist of non-recurring costs relating to the provision of air navigation services, including any non-recoverable taxes and customs duties. 5. The determined costs shall be allocated in a transparent way to the charging zones in respect of which they are incurred. Determined costs that are incurred in respect of several charging zones shall be allocated in a proportional way, on the basis of a transparent methodology. To this end, national supervisory authorities shall lay down, before the start of each reference period, the criteria used to allocate determined costs to charging zones, including in respect of points (b) and (c) of this paragraph, and the criteria to allocate the determined costs between *en route* and terminal services, and shall include this information in the performance plan in accordance with point 3.3(d) of [Annex II](#_DxCrossRefBm1409943981). The determined costs included in the cost bases for terminal charging zones shall cover the cost of the following services: (a) aerodrome control services or aerodrome flight information services which include air traffic advisory services and alerting services; (b) air traffic services related to the approach and departure of aircraft within a certain distance of an airport which shall be defined on the basis of operational requirements; (c) the proportional part of the air navigation services common to *en route* and terminal services. 6. The determined costs incurred for flights exempted in accordance with [Article 31(3)](#_DxCrossRefBm1409943999) to (5) shall be composed of: (a) the determined costs of exempted VFR flights, calculated through a marginal cost methodology; (b) the determined costs of exempted IFR flights, calculated as the product of the following elements: (i) the determined costs incurred for IFR flights, which shall consist of the total determined costs less the determined costs of VFR flights; (ii) the ratio of the number of exempted service units to the total number of service units which shall consist of the service units in respect of IFR flights and, where they are not exempted, of VFR flights. The determined costs of exempted VFR flights shall be separated from the determined costs incurred for IFR flights for the purpose of calculating the unit rate. 7. The national supervisory authorities shall verify, in respect of each charging zone, that the cost bases for *en route* and terminal charges comply with the requirements of Article 15(2) of Regulation (EC) No 550/2004 and with this Article. For this purpose, the national supervisory authorities shall examine the relevant accounting documents, including any asset book and other material relevant to the establishment of the cost base for charges.