IATA hopes lessons are learned from the “Dutch disease”

IATA Director General Willie Walsh hopes that the chaos ensuing from the planned capacity reduction at Amsterdam Schiphol airport is a warning signal to other governments. They need to follow international guidelines, specifically, ICAO’s Balanced Approach, to justify capacity reductions. While IATA’s position is perfectly understandable for a lobby organization, it shows the almost unbridgeable gap between the airline industry and some politicians, let alone what environmentalists demand. The capacity reduction at Schiphol has been part of each major speech of Walsh. He vented his frustration at the AGM in Istanbul in June, calling Schiphol “the worst airport in the world.” Walsh went at length again to explain his views this week during the IATA Global Media Day in Geneva. First, a summary of what it is about. The Dutch government announced in June 2022 that it wished to introduce a capacity cap at Schiphol of 460.000 movements by March 2024 and 440.000 by November 2024, down from 500.000 in 2019. This was motivated by the need to reduce noise pollution for communities around the airport, in particular the wider Amsterdam region that suffers the most from the continuous flow of incoming and departing traffic. KLM and a host of other airlines, including the big ones in Europe but also the US, plus IATA sought a court ruling in March, claiming that the government had failed to follow the Balanced Approach procedure for the first capacity reduction. At first, the Court ruled in their favor, but after an appeal from the Dutch government, the Appeal Court didn’t and granted permission to reduce capacity to 460.000. Meanwhile, the government had resigned in July, but caretaker minister of infrastructure Mark Harbers decided in October that the cap would be set at 452.500 movements. This left various airlines, especially those without historic slot rights like JetBlue and Air India, without slots for the 2024 summer season. JetBlue appealed with the US Department of Transportation, claiming the Dutch violated the Open Skies agreement with the US. The threat of a US lawsuit put huge pressure on the Dutch government. In November, Harbers backtracked, also citing that the European Commission had made serious comments about the procedure. So the initial capacity reduction was wiped off the table, but the second step to get to 440.000 movements by November next year is still on. For this, the government is following the Balanced Approach procedure. The outcome is uncertain. To make things more complicated, national elections in November have resulted in a political landslide towards the right. The winner of the elections, far-right PVV and Geert Wilders is open to an expansion of Schiphol. But it is far from certain that his party will form a coalition government, if at all. What this will mean for the capacity plan of Schiphol, which will get a new CEO in June, is unknown. At the same time, various environmentalist groups this week have sought a court ruling on the nature permit for Schiphol that was granted in September. If they win, this could result in an even deeper capacity reduction to maybe 300.000 to 400.000 movements. Punching above its weight These intricacies of Dutch politics seemed, literally, far away during the IATA media day in Geneva on Wednesday. Whereas the political debate in The Netherlands centers around reducing capacity for noise pollution and environmental reasons, Walsh’s view – unsurprisingly – is in full support of the airline industry and the benefits of connectivity that Schiphol offers. “Schiphol punches way above its weight, given the local origin and destination market that exists. It is a fantastic hub airport. Yes, it had challenges in 2022 (labor shortages resulted in long queues at security – RS), but the impact of the capacity reduction, had the government not backed down, would have been really significant. It would have undermined the integrity of the whole operations there. It would have had a bigger impact on KLM than on most other airlines.” “What was encouraging from an industry point of view is that everyone opposed what happened. You might expect some people to see this as a competitive opportunity. The dismantling of the Amsterdam hub would have benefited some other hubs in Europe. But nobody took that view, they all said this was wrong and the industry had to stand together.” Noise issues Walsh recognized that noise is an issue around airports. “But what is very frustrating is that the number of people impacted by noise from other forms of transport, this way exceeds the number impacted by air transport. There are four times more people impacted by the noise from rail than from air and thirty times more people affected by noise from roads. Yet, air travel is the one that gets all the attention.” While it is recognized that aircraft noise can cause sleep disturbance, IATA says that there is insufficient evidence at present that noise causes health issues, said Jon Godson, Assistant Director for Sustainability. Godson said that this year alone, 43 academic papers have been published, most of them saying that it is challenging to prove that there is a direct relation between health issues and airports for people who are also exposed to multiple sources of noise. The research will continue. “When we look at environmental issues, it is important that we consider all aspects of the environment. If the Dutch government was serious that this was about noise, there were a lot of things they could do before taking the extreme measure of reducing the slots. It is on that basis that we succeeded in demonstrating that they hadn’t fulfilled their legal obligation to follow the balanced approach process,” said Willie Walsh. This is a reference to the initial court case in March that was won by the airlines but later overruled by the Appeal Court, which stated that the Balanced Approach wasn’t required for the ‘experimental rule’ interim capacity reduction to 460.000 movements. That the government reversed its decision in November, “must have been highly embarrassing for the government, to be forced back down in the face of criticism from the US DOT and the European Commission, who I think sent a very strong-worded letter of criticism of what was happening in Amsterdam.” Discussions elsewhere Walsh is happy that there are not many similar discussions on capacity reductions happening elsewhere in Europe. But they are there, especially at Brussels Airport and in Dublin. In Brussels, the Belgian government announced its intention to ban night flights from October 2024 without correct consultation. In Dublin, the replacement of an aircraft movement cap during the night with an annual quota count has been challenged by residents. Elsewhere, Mexico City has faced a reduction in slot capacity in 2022 and the same is being discussed in Bogota. “I hope there will be a better understanding of the process that needs to be followed (for reducing capacity) and we won’t see government embarrassing themselves and reaching for solutions that they think would be popular but fail to fulfill the legal obligations they have.” Walsh continued: “Governments need to be very sensitive when they address these issues. I don’t think there is enough appreciation for what the slot rules are.” Without upholding the system of historical slots for airlines at airports, the airline industry risks losing a vital cornerstone of its connectivity backbone. Balanced Approach steps That’s why IATA went at length to explain to journalists how the slot system and the Balanced Approach procedure work. The Balanced Approach was adopted by the International Civil Aviation Organization (ICAO) in 2001 as the standard for addressing noise issues and enshrined in European law in 2014. It is also part of EU-US air service agreements. “It is based on four principles. Firstly, reducing noise as a source. This is the primary mechanism for reducing noise. Each generation of aircraft is on average 15 percent quieter than the generation they replace and this trend will continue with the introduction of higher bypass ratio engines, of geared turbofans with acoustic liners. More aerodynamic airframes will also help reduce noise generated from flaps and landing gear on approach,” said Jon Godson. The second pillar is land-use management and planning. “This is crucial to ensure that residential, commercial, and industrial developments are not located in areas where aircraft can impact health. Airports not only attract passengers and cargo customers but also act as magnets for jobs and local businesses. As noise contours around airports fill, planning authorities must not allow the encroachment of inappropriate land uses driven by this demand. Planning failures are costly and require retrofitting of sound insulation and land buy-back schemes, often recovered through expensive airport charges.” The third pillar is improved noise abatement operational procedures at airports. “This includes the use of preferential runways and routings. This is an important role to reduce noise locally. New technologies like performance-based navigation (PNB), enabling continuous climb and descent, will play an increasingly important role in reducing noise.” The fourth and final pillar is that of operational restrictions for aircraft types, night curfews, noise quotes, and capacity reductions. “But these should only be considered when all other options have been exhausted,” said Godson. That’s why IATA says the Dutch government has cut a few corners by announcing a capacity reduction for March 2024 without going through the various steps of the Balanced Approach and another one for November 2024 by incorrectly following the procedure. Reverse-engineered Hence, IATA takes a tough position when it comes to governments that make improper use of the Balanced Approach or neglect it. “There is emerging evidence that the Balanced Approach is being reverse-engineered to justify operational restrictions being motivated by short-term political gains. As long as the Balanced Approach continues to be undermined in its capacity, we are likely to see inappropriate noise objectives, and threats not only to passenger and business continuity but also to the concept of noise leakage as neighboring airports are tempted to absorb the capacity that is being cut,” said Jon Godson. “There is a danger that this will spread outside Europe and other countries will adopt a similar, short-sighted approach. Governments will face costly legal actions, infringements decisions, and threats of retaliation from third parties, while airlines will face costs and uncertainties in fleet planning and slot coordination.” IATA is most concerned that capacity reductions at Schiphol will continue next year, despite the caretaker government reversing its decision. As John Midleton, Head of Worldwide Slots, explained, Schiphol has indicated recently that it might not be able to return to its past historical capacity levels next summer, citing ATC, border control, and other staffing shortfalls. “This is a very troubling position, which raises concerns as to whether the airport or the Dutch government is intentionally driving down capacity to accomplish the reductions through other means.” The outcome of the political debate and various legal cases in The Netherlands is far from clear. Amsterdam Schiphol is a highly sensitive topic that is met with growing opposition, often by people who think that reducing capacity here solves the global climate problems elsewhere. Reducing capacity, be it in Amsterdam or Mexico, might get approval from IATA and airlines, but only when the correct procedures have been followed. As John Midleton said: “The announce the capacity reductions first and make the assessments later is the wrong way around. First, you need to establish what is the overall noise objective, what is the noise objective of the local community? That will then be reflected in all the mitigation measures that we can potentially have. Not only: can we use quieter aircraft on those routes, but can we look at land-use changes, noise insulation, and a variety of different things. But go for the restriction, assumes the whole three pillars have been mixed out when they certainly haven’t been.”

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