(1)

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.

(2)

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 in October 2019 by Member States were drawn up before the outbreak of the COVID-19 pandemic in March 2020, they did not take account of the considerable reduction in air traffic due to the measures taken by the Member States and third countries to contain the pandemic.

(3)

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). The Commission adopted, on 2 June 2021, Implementing Decision (EU) 2021/891 (5) setting revised Union-wide performance targets for RP3. On this basis, Member States submitted to the Commission, in October 2021, draft performance plans containing revised local performance targets for RP3.

(4)

Commission Implementing Decision (EU) 2022/728 (6) was addressed to Belgium, Germany, Greece, France, Cyprus, Latvia, Luxembourg, Malta, the Netherlands, Romania, and Sweden. In that Decision, the Commission found that the en route cost-efficiency performance targets included in the draft performance plan for RP3 of Latvia are not consistent with the Union-wide performance targets and issued recommendations for the revision of those targets.

(5)

In response to Russia’s war of aggression against Ukraine, which started on 24 February 2022, the Union has imposed restrictive measures which prohibit 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 and taking off from, or overflying the territory of the Union. Those restrictive measures and the counter-measures adopted by Russia have led to changes in air traffic in European airspace. Certain Member States, including Latvia, have been severely affected by a significant reduction in the number of overflights in the airspace under their responsibility. However, at Union-wide level, the observed impact on the number of flights has been limited in contrast with the sharp reduction of air traffic across Europe which resulted from the outbreak of the COVID-19 pandemic.

(6)

On 13 July 2022, Latvia submitted a revised draft performance plan for RP3 (the ‘revised draft performance plan’).

(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 the revised draft performance plan of Latvia.

(8)

In accordance with Article 15(1) of Implementing Regulation (EU) 2019/317, the Commission has assessed the consistency of the local performance targets contained in the revised draft performance plan of Latvia 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 its assessment by reviewing the elements set out in point 2 of Annex IV to that Implementing Regulation.

(9)

The Eurocontrol Statistics and Forecast Service (‘STATFOR’) base traffic forecast, published in June 2022, takes account of the change in circumstances with respect to air traffic in European airspace. Based on that forecast, the Commission notes that Latvia continues to face a significantly deteriorated traffic outlook for the remainder of RP3 as a consequence of Russia’s war of aggression against Ukraine. As those changed circumstances considerably impact the performance targets contained in the revised draft performance plan of Latvia, they should be taken into account in the assessment of the local performance targets contained therein.

(10)

Concerning the key performance area of safety, the Commission has assessed the consistency of the targets submitted by Latvia regarding the effectiveness of safety management of air navigation service providers (‘ANSPs’) based on the criterion laid down in point 1.1 of Annex IV to Implementing Regulation (EU) 2019/317.

(11)

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

(12)

The safety targets proposed by Latvia for LGS are consistent with the Union-wide performance targets and even outperform, for 2023 and 2024, the Union-wide performance targets in the areas of ‘safety policy and objectives’, ‘safety assurance’, ‘safety promotion’, and ‘safety culture’.

(13)

The Commission notes that the revised draft performance plan submitted by Latvia sets out measures for LGS for the achievement of the local safety targets, such as regular staff training, the revision of the safety management system procedures, evaluations of safety processes and just culture, simulated exercises, dissemination of safety data, and integration of safety management principles in business planning and decision-making.

(14)

On the basis of the findings set out in recitals 11 to 13, and considering that the Union-wide safety performance targets set in Implementing Decision (EU) 2021/891 are to be achieved by the final year of RP3, namely 2024, the targets included in the revised draft performance plan of Latvia should be considered consistent with the Union-wide performance targets in the key performance area of safety.

(15)

Concerning the key performance area of environment, the consistency of the targets submitted by Latvia 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 revised draft performance plan of Latvia have been compared with 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, on 2 June 2021.

(16)

Concerning the 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, before the outbreak of the COVID-19 pandemic, was not revised by Implementing Decision (EU) 2021/891, considering that the period for the application of that target had expired and that its implementation had thus become definitive leaving no possibility for retroactive adjustments. Similarly, the local environment performance targets for the year 2021 set by Member States in the draft performance plans submitted in October 2021 could not be retroactively modified in the revised draft performance plans. Therefore, the consistency of the local environment performance targets with the corresponding Union-wide performance targets should be assessed with regard to years 2022, 2023 and 2024.

(17)

The performance targets in the key performance area of environment proposed by Latvia 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:

(18)

The Commission observes that the environment targets proposed by Latvia are equal to the corresponding national reference values for each year from 2022 to 2024.

(19)

The Commission notes that Latvia has presented in the revised draft performance plan measures for the achievement of the local environment targets which mainly fulfil already existing legal requirements under Union law and include the deployment of airport collaborative decision making, the adoption of performance-based navigation flight procedures, as well as the implementation of free route airspace.

(20)

On the basis of the findings set out in recitals 17 to 19, the targets included in the revised draft performance plan of Latvia should be considered 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 Latvia 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 revised draft performance plan of Latvia have been compared with 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, on 2 June 2021.

(22)

Concerning the 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, before the outbreak of the COVID-19 pandemic, was not revised by Implementing Decision (EU) 2021/891, considering that the period for the application of that target had expired and that its implementation had thus become definitive leaving no possibility for retroactive adjustments. Similarly, the local capacity performance targets for the year 2021 set by Member States in the draft performance plans submitted in October 2021 could not be retroactively modified in the revised draft performance plans. Therefore, the consistency of the local capacity performance targets with the corresponding Union-wide performance targets should be assessed with regard to years 2022, 2023 and 2024.

(23)

The en route capacity targets proposed by Latvia 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 capacity targets proposed by Latvia are equal to the corresponding national reference values for each year from 2022 to 2024.

(25)

The Commission observes that Latvia has presented in the revised draft performance plan measures for the achievement of the local en route capacity targets. Those measures relate to air traffic controllers and include a new training programme as well as improved staffing in different sectorization scenarios. The Commission notes that in respect of the draft performance plan of Latvia submitted in 2021, the air navigation service provider LGS has reduced the planned number of air traffic controller full-time equivalents in operations for the years 2022 to 2024, due to the change in circumstances outlined in recitals 5 and 9.

(26)

On the basis of the findings set out in recitals 23 to 25, the targets included in the revised draft performance plan of Latvia should be considered 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 Article 1(3) and (4) of that Regulation, the Commission has complemented its assessment of en route capacity targets by reviewing the capacity targets for terminal air navigation services in accordance with point 2.1.(b) of Annex IV to Implementing Regulation (EU) 2019/317. Those targets were not found to raise any concerns in respect of Latvia.

(28)

With reference to in recital 4, the Commission concluded in Implementing Decision (EU) 2022/728 that the proposed en route cost-efficiency targets included in the draft performance plan of Latvia submitted in 2021 were inconsistent with the Union-wide performance targets. Latvia has proposed revised en route cost-efficiency targets in its revised draft performance plan.

(29)

The table below shows the initial RP3 en route cost-efficiency performance targets for the charging zone of Latvia, as contained in the draft performance plan submitted in 2021, and the corresponding revised performance targets contained in the revised draft performance plan submitted in 2022.

(30)

The Commission observes that Latvia has revised its local cost-efficiency targets for the time period from 2022 to 2024, which results, in comparison with the draft performance plan submitted in 2021, in an overall determined unit cost (‘DUC’) higher by 23,0 % over those three years and higher by 16,4 % over RP3 as a whole. Those DUC increases result from the significant deterioration in the traffic forecast, which has been caused by the reduction of air traffic in Latvia’s airspace as a consequence of Russia’s war of aggression against Ukraine, as referred to in recitals 5 and 9. The lower number of forecasted service units for each year from 2022 to 2024 has however been partly offset by Latvia through a reduction of determined costs.

(31)

The Commission notes that the traffic assumptions used in the revised draft performance plan are based on the Eurocontrol STATFOR June 2022 base traffic forecast. The en route service units forecasted for the charging zone for each year from 2022 to 2024, in comparison with the figures contained in the draft performance plan, are presented in the table below.

(32)

Compared to the draft performance plan submitted in 2021, the annual reductions in the number of service units for each year from 2022 to 2024 are in the approximate range of -35 % to -37 %. Accordingly, the en route service units for Latvia are expected to remain, in 2024, 40,1 % below their pre-pandemic level (year 2019), whereas they were previously foreseen to exceed the pre-pandemic level by 11,4 % in the STATFOR base traffic forecast of October 2021.

(33)

However, as shown in the table below, the flight movements in Latvian airspace operated under instrument flight rules (IFR) are not foreseen to decrease at the same rate as the en route service units. This discrepancy is due to the significant reduction of overflights, which on average generates proportionally higher numbers of en route service units than flights landing and departing from airports in Latvia.

(34)

The Commission hence notes that the workload of the ANSP, which is driven by the controlled flight movements, is not foreseen to diminish in correlation with the revenue reduction which stems from the lower number of en route service units.

(35)

The revised determined costs for years 2022 to 2024, expressed in real terms in 2017 prices, are shown in the table below. The Commission notes that Latvia has revised downwards the determined costs in real terms for each of those years.

(36)

The revised draft performance plan comprises an updated inflation forecast for Latvia for each year from 2022 to 2024, as outlined in the following table.

(37)

The table below displays the determined costs in nominal terms for each year from 2022 to 2024. The Commission observes that Latvia revised downwards the nominal determined costs for years 2023 and 2024, despite the upward revision of the inflation forecast.

(38)

The Commission has assessed the consistency of the revised cost-efficiency targets proposed by Latvia based on the criteria laid down in points 1.4(a), (b) and (c) of Annex IV to Implementing Regulation (EU) 2019/317.

(39)

Concerning the criterion laid down in point 1.4(a) of Annex IV to Implementing Regulation (EU) 2019/317, the Commission observes that the en route DUC trend at charging zone level of +9,2 % over RP3 underperforms the Union-wide trend of +1,0 % over the same period. The Commission notes that this constitutes a deterioration from the DUC trend of +3,3 % calculated on the basis of the draft performance plan submitted in 2021.

(40)

Concerning the criterion laid down in point 1.4(b) of Annex IV to Implementing Regulation (EU) 2019/317, the Commission observes that the long-term en route DUC trend at charging zone level over the second reference period (‘RP2’) and RP3 of +2,1 % underperforms the long-term Union-wide trend of -1,3 % over the same period. The Commission notes that this constitutes a deterioration from the long-term DUC trend of -0,4 % calculated on the basis of the draft performance plan submitted in 2021.

(41)

With reference to recitals 31 and 32, the Commission recalls that Latvia’s service unit forecast for RP3 has been revised significantly downwards as a consequence of the traffic changes resulting from Russia’s war of aggression against Ukraine. It is therefore necessary and appropriate to examine, for the purpose of the assessment criteria examined in recitals 39 and 40, whether Latvia would meet the Union-wide cost-efficiency trends in the absence of the severe traffic reduction for each year from 2022 to 2024 which is due to the changed circumstances.

(42)

To this end, the Commission has recalculated Latvia’s DUC trend over RP3 and Latvia’s long-term DUC trend over RP2 and RP3 by making use of the Eurocontrol STATFOR base traffic forecast of October 2021. This recalculation results in an adjusted DUC trend for Latvia of -6,5 % over RP3 and in an adjusted long-term en route DUC trend for Latvia of -4,7 % over RP2 and RP3. Both of those adjusted trends are significantly below the corresponding Union-wide DUC trends of +1,0 % and -1,3 % respectively. Hence, Latvia fulfils the assessment criteria examined in recitals 39 and 40 in the absence of the changes in traffic caused by Russia’s war of aggression against Ukraine.

(43)

Concerning the criterion laid down in point 1.4(c) of Annex IV to Implementing Regulation (EU) 2019/317, the Commission observes that the baseline value for the DUC of EUR 23,61 of Latvia in EUR2017 is 17,2 % lower than the average baseline value of 28,51 EUR2017 of the relevant comparator group.

(44)

The Commission acknowledges that the revised cost-efficiency targets for the charging zone of Latvia are higher than the initial targets included in the draft performance plan submitted in 2021. However, this deterioration is entirely due to the significantly lower traffic assumptions. When excluding the negative impact of the traffic changes resulting from Russia’s war of aggression against Ukraine, it is clear that Latvia meets both the Union-wide DUC trend and the Union-wide long-term DUC trend. In addition, Latvia’s baseline value for 2019 is lower by a notable margin than the corresponding average value of its comparator group, which indicates that it has maintained a historically good level of cost-efficiency in relative terms.

(45)

Furthermore, with reference to recital 35, the Commission notes that Latvia has taken measures to mitigate the exceptional traffic circumstances by considerably reducing its determined costs for the remainder of RP3. The Commission observes that those cost containment measures are, overall, commensurate with the lower number of IFR movements forecasted for each year from 2022 to 2024, as presented in recital 32.

(46)

On balance, the Commission therefore considers that Latvia has adequately addressed the recommendations set out in Article 3 of Implementing Decision (EU) 2022/728 with regard to the revision of its local cost-efficiency performance targets.

(47)

On the basis of the findings in recitals 29 to 46, the targets included in the revised draft performance plan of Latvia should be considered consistent with the Union-wide performance targets in the key performance area of cost-efficiency.

(48)

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 en route cost-efficiency targets by reviewing the 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 targets were not found to raise any concerns in respect of Latvia.

(49)

In the light of all the foregoing, the Commission has found that the performance targets contained in the revised draft performance plan submitted by Latvia are consistent with the Union-wide performance targets,