(Bloomberg) -- Amsterdam’s Schiphol airport has a lot to boast about —— the best direct flight connectivity across Europe, a terminal layout that’s easy to navigate, and an underground railway station that links it to major cities across Europe. Now a proposal for a capacity cap to minimize noise stands to dim the allure of one of Europe’s prime hubs.
The move has kicked off a court battle pitting the airline industry against the Dutch government, which wants to shrink Schiphol’s annual flight capacity by as much as 12% to 440,000 flights by 2024. Airlines opposing the move, including national carrier KLM Group, say the restriction flies in the face of policy stability, violates international regulation and harms connectivity. A verdict is expected on April 5.
European governments are walking a fine line between economic support of key industries and ensuring that cities become more livable and ecological. With a climate transition underway, aviation standards are getting stricter. France has clamped down on short-haul flights to keep up with its climate goals, while Austria ordered its flag carrier to give up some short trips to access state aid.
The situation at Schiphol is “being watched very closely by a lot of different countries and a lot of people around the world actually, because it seems very odd that you would restrict aviation to a point where you’re damaging the industry, which is a big provider to your GDP,” said Conrad Clifford, the deputy director general of the International Air Transport Association, which opposes the cap.
KLM, which has long dominated the Dutch market, accounts for close to 60% of traffic at Schiphol. The Air France-KLM unit says the cap doesn’t tally with the desire to retain a strong hub for the local economy and hurts a stable and predictable national enterprise. Almost 53 million passengers flew through Schiphol last year, making it the third-largest hub for connectivity globally, according to data from Airports Council International Europe. The airport contributes to the Dutch economy by creating about 300,000 jobs.
The government’s proposed reduction is based on “incorrect calculations and outdated data,” KLM lawyers told a judge during the first court hearing in March. They said the transport ministry is using the law like a “blunt ax,” to force through the capacity restriction without carefully considering the stakes.
Lawyers for IATA argue that the government seeks to impose flight caps as a first rather than a last resort, violating EU rules requiring member states to take a so-called balanced approach to new airport regulation. The Dutch government, for its part, said its plan complies with the bloc’s strictures.
This winter, before the new caps are due to take effect, the government plans to end so-called anticipatory enforcement rules. This means that violations of noise-limit values at certain enforcement points will no longer be tolerated, restoring the rights of residents, it said.
Opponents of the cap say the government hasn’t been consistent in its projections of Schiphol’s capacity. The Netherlands’ draft aviation memorandum for 2020-2050 outlined 540,000 as the upper limit for the airport’s annual flight capacity, taking into account operations at Amsterdam Lelystad, a nearby airfield that has yet to take up operations. A decision on the possible opening of Lelystad, which has been dogged by years of political gridlock, has been pushed to next summer.
Airlines are keen to find out whether the capacity restrictions will be implemented in time for them to declare their slots ahead of the winter season. “A swift and clear decision is vital in order to give airlines time to plan for the winter,” an IATA spokesperson said.
A cap at Schiphol would be felt in other cities, too, John Grant, chief analyst at aviation consultancy OAG, expects. Places liked Norwich, Teesside and Humberside in the UK rely solely on Schiphol for flight connectivity to the rest of the world, he said.
“One of the successes of Amsterdam is that it rightly calls itself London’s third airport. It has more connectivity to other airports in the United Kingdom than either Heathrow or Gatwick,” he said.
--With assistance from Siddharth Philip.
©2023 Bloomberg L.P.
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