Method of air navigation services valuation using activity-based costing

Abstract: The settlement of costs incurred for the provision of air navigation services is one of the elements of the calculation process for unit rates in en-route and terminal charging zones. One of the ways to reliably allocate costs to navigation services provided by air navigation service providers is the application of Activity-Based Costing (ABC). This methodology takes into account the cause-and-effect relationships between cost drivers and activities, thereby reflecting the actual costs incurred during the implementation of processes within the organization.1. INTRODUCTION
In 2006, the European Commission issued a regulation establishing a framework for the calculation of charges for the provision of air navigation services, known as the Common Charging Scheme [3]. In accordance with this regulation, costs incurred directly and indirectly for the provision of air navigation services by certified service providers are financed from charges levied on airspace users. An exception is made for specific grants due to exemptions from charges for certain categories of flights, which are charged to the state budget [6]. The sum of costs expended for the performance of air navigation services forms the so-called cost base used to calculate the rate applicable in a given charging zone. Since organizations providing air navigation services are non-profit enterprises, the cost base may be supplemented by a balance resulting from the under-recovery or over-recovery of costs in previous years.
An important requirement of the Common Charging Scheme for air navigation services is the transparency of cost allocation and the possibility of consulting with airspace users regarding the cost bases and the resulting unit rates calculated for each of the navigation charging zones.
2. COST BASE OF NAVIGATION CHARGING ZONES
The costs of operating air navigation services and the equipment used are attributed to two types of charging zones defined by the air navigation service provider. The en-route charging zone covers the airspace for which a single cost base and a single charge rate have been determined. (…)

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