NATIONAL COST BASES

DHMİ has successfully been able to keep its unit rate stable over the last six years. DHMİ has used its resources very effectively and efficiently, and has ensured the provision of air navigation services of high quality.

2008 FORECAST & ACTUAL
The comparison between service units and national costs for the year 2008F and 2008A is illustrated in the following table. Due to the global financial crisis experienced in the last quarter of 2008, the number of service units has decreased by %0.9 which is slightly lower than the estimated figure.

In order to minimize the adverse affects of the economic downturn over the users, high sensitivity is shown so as to ensure that the actual figures do not exceed the estimated ones. As a result, the 2008 actual cost base has been slightly higher (0,8%) than the 2008 estimated figure.


 

While the staff and operational expenditure have been calculated as 80.591 K€ and 58.411 K€, depreciation and interest costs have been determined as 28.436 K€ and 31.785 K€ respectively, the total cost base is being 199.223 K€.

 

 

 

DHMİ has applied the straight line method to the historic cost of assets for the calculation of depreciation costs. The interest rate applied for the calculation of the cost of capital slightly increased to %8.50 in 2008 due to the effects of global financial crisis. There are currently no investments related to air navigation services financed by loans and therefore no borrowing costs have been calculated under the cost of capital.

The slight difference between the estimated cost and the actual cost figures is caused by the increase in staff and capital costs and the decrease in other operating expenditures and depreciation. The increase in staff costs mainly derived from the rising number of staff, the increase in ancillary expenditures related staff and ordinary salary improvements provided by the government.

The main reason for the increase in the capital costs is the fact that the expenditures related to the SMART project for items not entered into operation yet, have remained in the advance accounts. Additionally, a serious decrease of 14% has been experienced in other actual expenditures and by this way the effect of increasing items has been kept at the lowest possible levels. Therefore, the total cost base figure has been %0.8 slightly higher than the estimated cost-base figures.

 

The actual MET costs for year 2008 have been slightly higher than the planned figures; mainly as a result of the additional allowance given by Law to state employees resulting in higher actual staff costs.

With a view to extend airspace capacity, new R&D studies are conducted continuously. One of our major projects resulting from these studies, is called SMART (Systematic Modernization of ATM resources in Turkey) and aims to increase quality and productivity of DHMİ's air navigation services. In this framework, the related investments of this project have been made in 2008 and will continue in the next few years.

 

 

The SMART Project is aimed at increasing airspace capacity so as to meet increasing traffic growth. As a matter of the fact, our country is one of the few countries having highest traffic growth and thus, increasing demand for airspace capacity in both the long and short term. All the technical and operational studies about these requirements are made in coordination with the experts from Eurocontrol.

 

 

Service Units

The number of Service Units has increased by 7% between 2007A (6,9 million) and 2008A (7,4 million). The increase in service units which has started since 2004 is a positive indicator to show users' preference to use Turkish Airspace.

National Unit Rate

“High quality services & lowest unit rate: Turkish Airspace”

In the last half decade, stability of decreasing Unit Rates has successfully been implemented. Investments aimed at meeting the needed capacity for increasing traffic growth have a great share in keeping aeronautical performance of DHMİ high. The unit rate of Turkey for 2009 is still one of the lowest ones in Route Charges System. All in all it is easy to see that DHMİ has maintained its success in achieving not only economic efficiency but also service quality.

The performance of DHMI compared to the performance objectives established in the framework of its business targets has been of a huge success.

Unit costs per Km in Turkey

Unit costs per km in Turkey have showed a decreasing trend for many years. This unit cost which was 0,40 – one of the lowest levels within the route charges system- in 2007 has decreased to 0,39 in 2008, as can be seen from the table below.

Forward Looking Information

Forward looking information relating to the years 2010-2014 have been indicated in the table below. The cost increasing effect of the SMART project is estimated to fall down in 2011 because of the expectation that most of the investments are completed and will likely enter into operation.

The expected total amount of this Project is approximately 296.4 M new Turkish Liras (around 148 M€) between the starting date (2002) and finishing date (end of 2009). Investments are included in the national cost base of the related year according to their entry into operation.

With this project it is aimed to increase airspace capacity thus reducing delays, enhance safety, modernize the current systems i.e. radars, equipment of ACC's and related software and hardware. Although there seems to be an increasing effect on the cost-base in nominal terms, the SMART project will not only provide operational improvements to the users but also financial benefits as a result of high efficiency gains in real terms.

 

Planned cost-effectiveness measures

As indicated in above explanations, the SMART (Systematic Modernization of ATM Resources in Turkey) Project has started in 2002 and is still carrying on. It is expected that it will terminate fully at the end of 2009.

This project aims to:
• Meet increasing air traffic capacity need and demand
• Meet expected traffic increase until the year 2023, with at least %150 increase in current capacity
• Provide more rapid, modern and safer air traffic services
• Meet our obligations in strategy and projects of Eurocontrol to reduce costs, increase capacity and safety of air navigation services. (LCIP, EATMP, ATM2000+)
• Renew old 1980's systems which have been used since then and which have finished their expected operating lives
• Increase performance of systems and of their users