(1)

Pursuant to Article 11 of Regulation (EC) No 549/2004, a performance scheme for air navigation services and network functions is to be set up. Furthermore, pursuant to Article 10 of Implementing Regulation (EU) 2019/317, Member States are to draw up, either at national level or at the level of functional airspace blocks (‘FABs’), binding performance targets for each reference period of the performance scheme for air navigation services and network functions. Those performance targets have to be consistent with the Union-wide targets adopted by the Commission for the reference period concerned. The Commission is responsible for assessing whether the proposed performance targets contained in the draft performance plans drawn up by the Member States are consistent with the Union-wide performance targets using the assessment criteria set out in Annex IV to Implementing Regulation (EU) 2019/317.

(2)

The outbreak of the COVID-19 pandemic has, since the first quarter of calendar year 2020, significantly impacted the air transport sector and has considerably reduced air traffic volumes as compared to pre-pandemic levels, due to the measures taken by the Member States and third countries to contain the pandemic.

(3)

Union-wide performance targets for the third reference period (‘RP3’) were originally set out in Commission Implementing Decision (EU) 2019/903 (3). As those Union-wide performance targets and the draft RP3 performance plans subsequently submitted by the Member States were drawn up before the outbreak of the COVID-19 pandemic, they could not take account of the resulting significantly changed circumstances for air transport.

(4)

In response to the impact of the COVID-19 pandemic on the provision of air navigation services, exceptional measures for RP3, which derogate from the provisions of Implementing Regulation (EU) 2019/317, were set out in Commission Implementing Regulation (EU) 2020/1627 (4). Pursuant to Article 2(1) of Implementing Regulation (EU) 2020/1627, the Commission adopted, on 2 June 2021, Implementing Decision (EU) 2021/891 (5) setting revised Union-wide performance targets for RP3.

(5)

The Commission notes that the October 2021 base traffic forecast of the Eurocontrol’s Statistics and Forecast Service (‘STATFOR’) projects that air traffic at Union-wide level will reach its pre-pandemic levels in the course of 2023 and will exceed those levels in 2024. However, the level of uncertainty regarding traffic development remains particularly high because of the risks related to the evolution of the COVID-19 epidemiological situation. The Commission also notes that the traffic recovery is expected to be uneven across Member States.

(6)

All Member States have developed and adopted draft performance plans containing revised local performance targets for RP3, which were submitted to the Commission for assessment by 1 October 2021. Following the verification of completeness of those draft performance plans, the Commission requested Member States to submit updated draft performance plans by 17 November 2021. The Commission’s assessment presented in this Decision is based on the updated draft performance plan submitted by Hungary.

(7)

The performance review body, assisting the Commission in the implementation of the performance scheme pursuant to Article 11(2) of Regulation (EC) No 549/2004, has submitted to the Commission a report containing its advice on the assessment of RP3 draft performance plans.

(8)

In accordance with Article 14(1) of Implementing Regulation (EU) 2019/317, the Commission has assessed the consistency of the local performance targets proposed by Hungary on the basis of the assessment criteria laid down in point 1 of Annex IV to that Implementing Regulation, and taking account of local circumstances. In respect of each key performance area and the related performance targets, the Commission has complemented the assessment by reviewing draft performance plans in respect of the elements set out in point 2 of Annex IV to that Implementing Regulation.

(9)

Concerning the key performance area of safety, the Commission has assessed the consistency of the targets submitted by Hungary regarding the effectiveness of safety management of air navigation service providers based on the criterion laid down in point 1.1 of Annex IV to Implementing Regulation (EU) 2019/317. That assessment was conducted taking account of local circumstances and was complemented by the review of measures planned for the achievement of the safety targets in respect of the elements set out in point 2.1.(a) of Annex IV to Implementing Regulation (EU) 2019/317.

(10)

The draft performance targets in the key performance area of safety proposed by Hungary in respect of the effectiveness of safety management, broken down per safety management objective and expressed as a level of implementation, are as follows:

(11)

In respect of the draft safety targets proposed by Hungary for the air navigation service provider (Hungarocontrol), the Commission has found that the level of the Union-wide performance target is planned to be achieved in 2023 with regard to the ‘safety risk management’ objective, whilst for the other ‘safety management objectives’ the local performance targets meet the level of the Union-wide performance target for each calendar year from 2021 to 2024.

(12)

The Commission notes that the draft performance plan submitted by Hungary sets out a wide range of measures for Hungarocontrol for the achievement of the local safety targets, covering developments in technology, human factor related issues, compliance and performance monitoring, cyber and data safety, ‘just culture’ and ‘safety culture’. The draft performance plan contains 70 actions, including with regard to the implementation of a new ATM system, a sector complexity tool for planning the workload distribution, a new sectorisation scheme, a radio direction finder system for better situational awareness of air traffic controllers (‘ATCOs’) and a fatigue risk management system.

(13)

On the basis of the findings set out in recitals 11 and 12, and considering that the Union-wide safety performance targets set in Implementing Decision (EU) 2021/891 must be achieved by the final year of RP3, namely 2024, the draft targets included in the draft performance plan of Hungary should be assessed as consistent with the Union-wide performance targets in the key performance area of safety.

(14)

Concerning the key performance area of environment, the consistency of the targets submitted by Hungary regarding the average horizontal en route flight efficiency of the actual trajectory has been assessed based on the criterion laid down in point 1.2 of Annex IV to Implementing Regulation (EU) 2019/317. Accordingly, the proposed targets contained in the draft performance plan of Hungary have been compared to the relevant en route horizontal flight efficiency reference values set out in the European Route Network Improvement Plan (‘ERNIP’) available at the time of adopting the revised Union-wide performance targets for RP3, that is on 2 June 2021. That assessment was conducted taking account of local circumstances and was complemented by the review of measures planned for the achievement of the environment targets under point 2.1(a) of Annex IV to Implementing Regulation (EU) 2019/317.

(15)

In respect of the calendar year 2020, the Union-wide performance target for RP3 in the key performance area of environment, which was initially set out in Implementing Decision (EU) 2019/903, was not revised by Implementing Decision (EU) 2021/891, considering that the time period for the application of that target had expired and that its implementation had thus become definitive leaving no possibility for retroactive adjustments. Accordingly, Member States were not requested to revise, in the draft performance plans submitted by 1 October 2021, their local performance targets for calendar year 2020 in the key performance area of environment. Therefore, the consistency of the local environment performance targets with the corresponding Union-wide performance targets should be assessed with regard to calendar years 2021, 2022, 2023 and 2024.

(16)

The draft performance targets in the key performance area of environment proposed by Hungary and the corresponding national reference values for RP3 from the ERNIP, expressed as the average horizontal en route flight efficiency of the actual trajectory, are as follows:

(17)

The Commission observes that the draft environment targets proposed by Hungary are equal to the corresponding national reference values for calendar years 2021 to 2024.

(18)

In respect of point 2.1(a) of Annex IV to Implementing Regulation (EU) 2019/317, the Commission notes that Hungary has presented in the draft performance plan several measures for the achievement of the local environment targets which include a transition plan for performance based navigation and participation in the further implementation of the South East Europe Free Route Airspace (SEE FRA) project.

(19)

Furthermore, the Commission observes that Hungary has already implemented free route airspace from flight level 095 to flight level 660.

(20)

On the basis of the findings set out in recitals 17 to 19, the draft targets included in the draft performance plan of Hungary should be assessed as consistent with the Union-wide performance targets in the key performance area of environment.

(21)

Concerning the key performance area of capacity, the consistency of the targets submitted by Hungary regarding the average en route air traffic flow management (‘ATFM’) delay per flight has been assessed based on the criterion laid down in point 1.3 of Annex IV to Implementing Regulation (EU) 2019/317. Accordingly, the proposed targets contained in the draft performance plan of Hungary have been compared to the relevant reference values set out in the Network Operations Plan available at the time of adopting the revised Union-wide performance targets for RP3, that is on 2 June 2021. That assessment was conducted taking account of local circumstances and was complemented by the review of measures planned for the achievement of the capacity targets under point 2.1(a) of Annex IV to Implementing Regulation (EU) 2019/317.

(22)

In respect of the calendar year 2020, the Union-wide performance target for RP3 in the key performance area of capacity, which was initially set out in Implementing Decision (EU) 2019/903, was not revised by Implementing Decision (EU) 2021/891, considering that the time period for the application of that target had expired and that its implementation had thus become definitive leaving no possibility for retroactive adjustments. Accordingly, Member States were not requested to revise, in the draft performance plans submitted by 1 October 2021, their local performance targets for calendar year 2020 in the key performance area of capacity. Therefore, the consistency of the local capacity performance targets with the corresponding Union-wide performance targets should be assessed with regard to calendar years 2021, 2022, 2023 and 2024.

(23)

The draft en route capacity targets proposed by Hungary for RP3, expressed in minutes of ATFM delay per flight, as well as the corresponding reference values from the Network Operations Plan, are as follows:

(24)

The Commission observes that the draft capacity targets proposed by Hungary are equal to the corresponding national reference values for each calendar year of RP3.

(25)

In respect of point 2.1(a) of Annex IV to Implementing Regulation (EU) 2019/317, the Commission notes that Hungary has presented in the draft performance plan a range of measures for the achievement of the local en route capacity targets. Those measures include the re-organisation of Budapest Area Control Centre, a new ATCO training programme, an air traffic management (ATM) system upgrade as well as an increase in the planned number of ATCO FTEs by the end of RP3.

(26)

On the basis of the findings set out in recitals 24 and 25, the draft targets included in the draft performance plan of Hungary should be assessed as consistent with the Union-wide performance targets in the key performance area of capacity.

(27)

With regard to airports which fall within the scope of Implementing Regulation (EU) 2019/317 as set out in Articles 1(3) and (4) of that Regulation, the Commission has complemented its assessment of draft en route capacity targets by the review of the draft capacity targets for terminal air navigation services in accordance with point 2.1(b) of Annex IV to Implementing Regulation (EU) 2019/317. Those draft targets were not found to raise any concerns in respect of Hungary.

(28)

Concerning the key performance area of cost-efficiency, the consistency of the targets submitted by Hungary regarding the determined unit costs (‘DUC’) for en route air navigation services has been assessed based on the criteria laid down in points 1.4(a), (b) and (c) of Annex IV to Implementing Regulation (EU) 2019/317. Those criteria consist of the DUC trend over RP3, the long-term DUC trend over RP2 and RP3 (2015-2024), and the baseline value for the DUC at charging zone level compared with the average value of the charging zones where air navigation service providers have a similar operational and economic environment..

(29)

The assessment of en route cost efficiency targets was conducted taking account of local circumstances. It was complemented by the review of the key factors and parameters underpinning those targets as specified in point 2.1(d) of Annex IV to Implementing Regulation (EU) 2019/317.

(30)

The draft en route cost-efficiency targets proposed by Hungary for RP3 are as follows:

(31)

Concerning the criterion laid down in point 1.4(a) of Annex IV to Implementing Regulation (EU) 2019/317, the Commission observes that Hungary’s en route DUC trend at charging zone level of +2,8 % over RP3 underperforms the Union-wide trend of +1,0 % over the same period.

(32)

Concerning the criterion laid down in point 1.4(b) of Annex IV to Implementing Regulation (EU) 2019/317, the Commission observes that Hungary’s long-term en route DUC trend at charging zone level over RP2 and RP3 of -0,9 % underperforms the long-term Union-wide trend of -1,3 % over the same period.

(33)

Concerning the criterion laid down in point 1.4(c) of Annex IV to Implementing Regulation (EU) 2019/317, the Commission observes that Hungary’s baseline value for the DUC of EUR 31,72 in real terms at 2017 prices (‘EUR2017’) is lower by 21 % than the average baseline value of EUR 40,13 in EUR2017 of the relevant comparator group. The Commission notes that the determined en route unit cost of Hungary remains below the average of the comparator group during the whole RP3. However, the difference is reduced to -16 % in respect of year 2024.

(34)

The Commission has further examined whether the deviations observed in recitals 31 and 32 could be deemed necessary and proportionate under point 1.4(d) of Annex IV to Implementing Regulation (EU) 2019/317, provided that the deviation from the Union-wide DUC trend or from the long-term Union-wide DUC trend is exclusively due to additional determined costs related to measures necessary to achieve the performance targets in the key performance area of capacity or to restructuring measures within the meaning of Article 2(18) of Implementing Regulation (EU) 2019/317.

(35)

In respect of the criterion specified under point 1.4(d)(i) of Annex IV to Implementing Regulation (EU) 2019/317, Hungary contends in its draft performance plan that the cost deviations from the Union-wide DUC trend and from the long-term Union-wide DUC trend are exclusively due to measures required to achieve capacity targets.

(36)

The Commission observes that Hungary sets out in its draft performance plan a wide range of measures undertaken by the ANSP (Hungarocontrol) for the purpose of achieving the local capacity targets and for which additional costs are incurred. Those measures are detailed and quantified in the draft performance plan.

(37)

Hungary explains that in the pre-COVID circumstances, in 2019, it became clear that the number of ATCOs in operations was not sufficient to cater for the volume and complexity of traffic. Therefore, in view of accommodating the expected future traffic levels, Hungarocontrol has put in place a training programme in view of increasing the number of ATCOs over RP3. The relevant associated costs comprise the staff costs for the remunerations of the new students in the initial training phase and of the licensed student air traffic controllers, as well as the other operating costs incurred for the training of those new recruits.

(38)

The capacity increases required to meet future traffic demand will be further supported by investments in state-of-the-art equipment. The Commission notes that several upgrades to ATM system components are therefore planned, including the implementation of a radio direction finder function and of a complexity tool, improvements of airspace management functionalities, and the introduction of improved flow and capacity management techniques. The timely realisation of these investments over RP3 is expected to enable notable capacity increases.

(39)

Based on the detailed analysis by the performance review body, the Commission considers that the relevant measures outlined by Hungary in the draft performance plan are indeed necessary to achieve the local capacity targets. Furthermore, having regard to the evaluation made by the performance review body, it can be concluded that the additional costs of those measures are larger than the deviations from the Union-wide DUC trend and from the long-term Union-wide DUC trend referred to in recitals 31 and 32.

(40)

In light of the considerations in recitals 35 to 39, the Commission finds that the criterion set out in point 1.4(d)(i) is fulfilled in respect of Hungary.

(41)

It follows from the foregoing observations that it is not necessary to further examine whether the criterion set out under point 1.4(d)(ii) would be fulfilled with regard to Hungary.

(42)

On the basis of the findings set out in recitals 31 to 41, the proposed targets included in the draft performance plan of Hungary should be assessed as consistent with the Union-wide performance targets in the key performance area of cost-efficiency.

(43)

With regard to airports which fall within the scope of Implementing Regulation (EU) 2019/317 as set out in Articles 1(3) and (4) of that Regulation, the Commission has complemented its assessment of draft en route cost-efficiency targets with the review of the draft cost-efficiency targets for terminal air navigation services in accordance with point 2.1(c) of Annex IV to Implementing Regulation (EU) 2019/317. Those draft targets were found to raise concerns in respect of the Hungary.

(44)

Firstly, when comparing the RP3 terminal determined unit cost trend with the en route DUC trend, the Commission has found that the terminal DUC trend of Hungary’s Terminal Charging Zone of +11,0 % is higher than Hungary’s en route DUC trend at charging zone level of +2,8 % over RP3.

(45)

Secondly, the Commission observes that the draft targets for the terminal DUC trend for Hungary’s terminal charging zone of +11,0 % over RP3 is higher than the actual terminal DUC trend of -4,7 % observed over RP2.

(46)

Thirdly, when comparing the terminal DUC with the performance of similar airports for RP3, the Commission observes that the DUC for Budapest airport is estimated to be above the median DUC of the relevant airports by a very significant margin.

(47)

Therefore, the Commission considers that, in connection with the adoption of its final performance plan in accordance with Article 16, point (a) of Implementing Regulation (EU) 2019/317, Hungary should further justify the terminal cost-efficiency targets for RP3 in light of the observations set out in recital 44 to 46, or should revise downwards those targets.

(48)

In accordance with point 2.1(f) of Annex IV to Implementing Regulation (EU) 2019/317, in relation to the assessment of draft capacity targets, the Commission has complemented its assessment by a review of the draft incentive schemes referred to in Article 11 of Implementing Regulation (EU) 2019/317. In this respect, the Commission has examined whether the draft incentive schemes fulfil the substantive requirements set out in Article 11(1) and (3) of Implementing Regulation (EU) 2019/317. The draft incentive schemes contained in the draft performance plan of Hungary were found to raise concerns.

(49)

The Commission observes that both the en route capacity incentive scheme and the terminal capacity incentive scheme proposed in Hungary’s draft performance plan comprise a maximum financial disadvantage amounting to 0,5 % of determined costs and a maximum financial advantage amounting to 0,5 % of determined costs.

(50)

In respect of those incentive schemes, the Commission, on the basis of expert advice provided by the performance review body, has strong doubts whether the proposed maximum financial disadvantage, which amounts to 0,5 % of determined costs, would have any material impact on the revenue at risk, as required pursuant to Article 11(3), point (a) of Implementing Regulation (EU) 2019/317.

(51)

Therefore, Hungary should revise, in connection with the adoption of its final performance plan in accordance with Article 16, point (a) of Implementing Regulation (EU) 2019/317, its incentive schemes for achieving en route and terminal capacity targets so that the maximum financial disadvantages stemming from those incentive schemes are set at a level having a material impact on the revenue at risk, as expressly required under Article 11(3), point (a) of Implementing Regulation (EU) 2019/317, which in the Commission’s view should lead to a maximum financial disadvantage equal to or higher than 1 % of determined costs.

(52)

On the basis of the assessment set out in recitals 10 to 51, the Commission has found that the performance targets contained in the draft performance plans submitted by Hungary are consistent with the Union-wide performance targets.

(53)

The Commission notes that some Member States have indicated their intention to include cost items relating to airport drone detection in their RP3 cost bases. It has not been possible to precisely establish, based on the elements contained in the draft performance plans, to what extent Member States have included such determined costs in their RP3 cost bases and, where such costs have been included, to what extent they are incurred in relation to the provision of air navigation services and could thus be deemed eligible under the performance and charging scheme. The Commission services have sent an ad hoc information request to all Member States in order to gather relevant information, and will further examine the reported airport drone detection costs in the context of unit rate compliance verification. This Decision is without prejudice to the findings and conclusions of the Commission on the topic of drone detection costs.

(54)

In response to Russia’s military aggression against Ukraine, which started on 24 February 2022, the Union has adopted restrictive measures prohibiting Russian air carriers, any Russian-registered aircraft and any non-Russian-registered aircraft which is owned or chartered, or otherwise controlled by any Russian natural or legal person, entity or body from landing in, taking off from, or overflying the territory of the Union. Those measures are leading to a reduced air traffic in the airspace over the territory of the Union. The impact at the Union-wide level should however not be comparable to the reduction of air traffic which resulted from the outbreak of the COVID-19 pandemic in March 2020. Therefore, it is appropriate to maintain the existing measures and processes for the implementation of the performance and charging scheme in RP3,