Shippers call for rapid implementation of “local rule” at AMS

Today a triad of Dutch organizations – ACN, the local air cargo community; TLN, the Dutch Association for Transport and Logistics; and evofenedex, the Dutch Shippers association, pressed the country’s Minister of Infrastructure and Public Works to move forward immediately with the implementation of a “local rule” for slot distribution at Amsterdam Airport Schiphol. They warned in a joint release that if such a local rule does not go into effect before the start of the summer season on 25 March, even more freighter flights could migrate to other airports, costing the Dutch economy dearly.

It is already widely agreed that a local rule is necessary, but it remains to be seen how quickly and effectively the rule can be put into operation. On 14 December, the Airport’s independent slot coordinator approved the rule as a measure to minimize the number of cargo flights lost at Schiphol. The rule is based on three pillars: safeguarding historical rights on slots, space for incidental slot payment, and slot optimization by reissuing non-flown slots. In practice, this would mean that slots that went unused last week because of a storm that caused numerous flight cancellations, could be easily redistributed.

But there are concerns that the slot coordinator is understaffed and lacks the resources necessary to launch a new slot redistribution system before 25 March. This, the shippers and air cargo associations warn, could prolong the exodus of freighter flights from the airport until fall 2018. Since it became clear that some carriers would lose slots beginning in 3Q17, the number of freighter flights has fallen by 12% on a  y-o-y basis.

Currently, slots are allocated according to IATA/EU rules which disadvantage cargo flights because of an IATA 80/20 rule that stipulates an airline can lose a slot if it is not flown 80% of the time. This rule has never been strictly enforced, but with slots now maxed out, ad-hoc charter flights, and even some scheduled cargo flights, are particularly at risk because of the impracticality of using a slot 80% of the time.

The capacity issues stem from a growth ceiling imposed by Dutch authorities back in 2008 which capped annual air traffic movements (ATMs) at 500,000 through 2020. This ceiling only became an issue in 2016 when ATMs at the airport hit almost 480,000 movements, and with continued growth in both passenger and cargo demand, traffic at Schiphol was undoubtedly going to surpass 500,000 ATMs in 2017, and in each subsequent year.

Looking further into the future, the good news is that a new airport slated to open in 2019 will begin handling flights operated by low-cost carriers, and, after 2020, the ATM ceiling at Schiphol may be further raised. In 2018-2019, however, slot scarcity will force carriers to divert freighter flights to other airports in the region. Just how many flights will be affected, will depend in part on how quickly the “local rule” can be implemented.