Be careful what you wish for

According to a report in Dutch newspaper Financieele Dagblad, Netherlands Minister of Infrastructure and the Environment Wilma Mansveld confirmed that her government had frozen landing rights for the big three Gulf Region carriers at Amsterdam’s Schiphol Airport

The move comes in response to complaints by European airlines (including troubled Franco-Dutch giant Air France-KLM) that government subsidies to Emirates, Etihad, and Qatar Airways gave those carriers an unfair advantage. The big US legacy carriers have raised similar complaints, accompanied by requests that the US government abrogate its aviation agreements with the UAE and Qatar, and cut Gulf carrier access to the US.

In the US, response from the air freight industry was swift, with FedEx Express CEO David Bronczek pointing out in an open letter to the US Secretaries of State, Transportation, and Commerce that breaking the agreements and cutting US access for Gulf carriers would almost certainly lead to retaliation in the form of reduced access to the UAE for US carriers – hugely impacting FedEx, which has a very busy hub in Dubai.

Nor would the impact be limited to FedEx. As Mr Bronczek pointed out, any benefit to American, Delta, and United Airlines would be more than offset by damage to the US economy as a whole, dependent as it is on world trade. In his words: “Retrenchment in any way from Open Skies by the US would jeopardize the economic growth benefits that air cargo provides. Retrenchment would result in higher fares and fewer options for flying passengers. Retrenchment benefits only a very few. The US should not return to the restrictive, inefficient, expensive agreements of the past where customers, communities, air cargo, and the greater U.S. economy suffered.”

So far, the US government has (wisely, in our opinion) chosen to take no precipitate action, but rather to consider the issue from as broad a perspective as possible – including listening to the response from the Gulf Region. However, in Europe, the government of the Netherlands appears to have thrown caution to the winds and pushed over the first domino. Reaction, predictably, was swift. And, equally predictable, was that the first response came not from the Gulf, but from the Dutch Shippers Council (EVO).

Joost van Doesburg, secretary of EVO’s air freight council and also air freight policy manager at the European Shippers’ Council (ESC), called the move protectionist, and said it would have a negative effect on Amsterdam’s status as a major European distribution hub. He also called for freighter flights to be exempted from the freeze, saying that not only did Schiphol already have too few cargo flights, but that local carrier KLM was about to retire six of its nine freighters.

Cargo Facts does not pretend to have all the answers. But it is clear that unthinkingly granting the wish of a few big passenger carriers will have unintended negative consequences for all concerned.