Could politics cool the hot market for air freight ?

Almost unanimously at airports around the world, 2017 cargo volumes are showing significant growth over 2016. Amsterdam (AMS), and Brussels (BRU), are no exceptions, having recently reported cargo volumes up 8.3% and 12.9% y-o-y, for the eight-month period through August 2017. Neither airport is uncorking the champagne just yet, however, as cargo operations at both airports face mounting uncertainty due to factors largely out of the airports’ own control that could inhibit future cargo growth.

Starting in Belgium, earlier this year, the Brussels Government abolished a noise tolerance, and increased enforcement of nighttime flight restrictions. Operators of non-compliant flights have in turn incurred hefty fines. For airlines utilizing newer aircraft that fall within the noise tolerance guidelines, this has not been much of an issue. The Brussels government has also postponed collection of fines, but carriers with fleets of older, louder aircraft, have already chosen to divert some of their operations to neighboring airports.

AT BRU, the negative impact of noise impacts is already visible in August 2017 traffic statistics. Overall, cargo traffic was up 1.8% y-o-y in August, but growth was dampened by the loss of freighter flights. Cargo volumes moving on “full freighter” (maindeck, non-integrator) flights fell 18% y-o-y in August, to 11,526 tonnes from the loss of flights from carriers such as Air Cargo Global and Suparna. Integrator handle, which was up 14.6%, and belly cargo volumes that were 9.4% higher, helped mitigate the broader impact.

Turning to AMS, growth limitations established in a 2008 development plan threaten to cap annual air traffic movements (ATMs) at 500,000 through 2020. In the past, this has not been a problem, but last year ATMs hit almost 480,00, and with growth in both passenger and cargo demand, traffic at Schiphol will almost certainly hit the 500,000 limit before the end of this year.

How does that affect freighter operation? 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. In the past, this rule was never enforced because there was no shortage of slots, 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 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. Between 2018-2019, however, slot scarcity could divert freighter flights to other airports in the region. Just how many flights will be affected, remains to be seen. According to an August forecast, Schiphol projected a 10.5% drop in the number of full freighter ATMs, but could not estimate the impact on volumes.

In another attempt to reduce the impact on the Schiphol cargo community, Air Cargo Netherlands petitioned the Airport Slot Coordination Committee to implement a pooling mechanism for unused ATMs. If the committee were to implement slot pooling, ACN also requested that preference be given to full freighter operations.

For now, though, much remains up in the air. Next month carriers at AMS will know the extent to which their ATMs are to be winnowed in 2018.