Slot reduction Schiphol gets US-Dutch relations to sub-zero

The coming three months could be decisive for the future of US-EU/Dutch aviation policy relations. On Monday next week, the US Department of Transportation (DOT) is launching consultations with the Dutch government and the European Commission about capacity at Amsterdam Schiphol Airport for the 2024 summer schedule. This week, slot coordinator ACNL said that it has cut capacity by 3.1 percent or 9.070 slots. While home carrier KLM is hit the hardest by this and will lose 4.847 slots, US carriers will also have to surrender slots. SkyTeam partner Delta Air Lines will lose 252 slots, United Airlines 53, and American Airlines 22. Combined, US airlines have lost 339 slots. The capacity cut affects 84 airlines, of which 24 airlines without historic rights have lost them all. In the latter category falls JetBlue. The carrier made the most headlines this week, as it has lost all slots for the upcoming summer season from March 31. As reported before, JetBlue was fully aware that it had only secured slots for the summer 2023 and winter 2023/2024 seasons but had no historic rights for summer 2024. On the occasion of the first service from New York to Amsterdam in August, CEO Robin Hayes was hopeful of securing slots for next summer, but ACNL has now ruled differently. JetBlue will have to wait another year before automatically being entitled to summer slots in 2025. As ACNL says in its working procedure for summer 2024 slots that exceed historic rights: "The reduction of the seasonal limit is based on the Experimental Regulation as published in the State Journal. The Experimental Regulation is temporary in nature. Subject to conditions, ACNL will make the historic right associated with unallocated historic slots for S24 also applicable in the SHL for S25." Open Skies violation After the airline was granted slots until March 31, in June, JetBlue withdrew a previous complaint with the DOT, which would have resulted in a lawsuit against the Dutch state. But JetBlue warned at the same time that the complaint would be reinstated if it felt that the Dutch government would violate the Open Skies agreement between the two countries again. Exactly this happened when caretaker Minister of Infrastructure Mark Harbers announced this summer that capacity at Schiphol would be capped at 452.500 movements from November 2024 under the experimental rule to reduce noise pollution. The government earlier had plans to cap capacity at 440.000. Lobby organization Airlines 4 America (A4A) filed a complaint with the DOT against the Dutch State and European Commission in September. A4A says that the capacity reductions violate the 2007 US-EU Air Transport Agreement. They are both “an unjustifiable and unreasonable discriminatory and anticompetitive practice and an unjustifiable and unreasonable restriction on air carrier access under IATFCPA, and a violation of the US-EU Agreement.” A4A states that the capacity reduction can only be applied after an EU-prescribed Balanced Approach procedure, but the argument was thrown out by the Court of Appeal earlier this year. The complaint was backed by its ten members. JetBlue filed a separate but similar complaint under the International Air Transportation Fair Competitive Practices Act (IATFCPA. “JetBlue also argues that the Experimental Regulation effectively forecloses future access by any US new entrant carrier that is not a member of an immunized joint venture and that the Dutch Government is imposing unjustifiable and unreasonable restrictions on access, requiring immediate Department intervention under IATFCPA.” Dutch carriers have to file flight schedules The DOT said on Thursday that it had approved both complaints and is now entering a consultation phase with the Dutch State and EC. No later than seven days from this order of from November 9 at the latest, Dutch carriers KLM, its cargo subsidiary Martinair, and leisure airline TUI Netherlands will be required to file flight schedules to the US with the DOT. A decision on further countermeasures that were proposed by JetBlue, including a ban of KLM at New York JFK, has been deferred. JetBlue might have to wait until the 2025 summer season to secure slots at Amsterdam Schiphol again if its complaint is unsuccessful. (Richard Schuurman) If implemented, KLM will be hurt by both US and Dutch measures. In a response to the A4A and JetBlue complaints, the Dutch carrier said that “it finds itself in the crosshairs of its own government’s purported noise-reduction measures implemented through mandated capacity reductions at AMS and faces the possibility that the Netherlands’ various open skies partners will also pursue sanctions against it. KLM states that it derives no benefit from the proposed regulations and will be seriously injured if they become effective.” KLM said that “now is not the time for the Department to rush to implement retaliatory countermeasures”, which in its view would be “grossly unfair.” Instead, “KLM states that it strongly supports the relief sought in A4A’s complaint, and it urges the Department to engage in expeditious consultations with the Dutch Government and the European Commission. If that process does not lead to a satisfactory resolution, then KLM asserts that the dispute resolution provisions of Article 19 of the US-EU Agreement should be invoked.” 90 days for consultations The DOT has now 60 days plus a 30-day extension period to launch an investigation, hearings, and consultations. This can be extended for another 90 days. The Department points out that it already has had extensive discussions with the Dutch government since January this year but to no avail. “The Dutch Ministry has yet to put forward any persuasive argument to support the theory that its intention to implement the Experimental Regulation is in conformity with the US-EU Agreement. Moreover, we have not seen any indication that the Government of the Netherlands will suspend or delay its efforts to implement the plan. To the contrary, the publication on September 11, 2023, by the Government of the Netherlands of the final Experimental Regulation, the publication on September 28 by the Dutch slot coordinator of the reduced capacity at AMS for the Summer 2024 traffic season, and the November 2 communication to airlines of slot allocation decisions all demonstrate that the Government of the Netherlands fully intends to continue pursuing its first phase of the plan without adherence to the Balanced Approach principle or other applicable requirements under the Agreement.” The DOT says it also remains “concerned with the legitimacy of the second phase, i.e., the further reduction to 452.500 aircraft movements in November 2024. The record of this proceeding and the Department’s bilateral engagements suggest that this phase has been prejudiced from the beginning by targeting operational restrictions at the outset, rather than as a last resort measure as prescribed by the Balanced Approach.” The Department adds: “Finally, we remain concerned that the actions taken by the Government of the Netherlands effectively preclude opportunities for new entrant carriers to operate at AMS. Indeed, we find it particularly alarming that JetBlue, a relatively new entrant at AMS, has been notified that it will receive no slots for the Summer 2024 season. While we are careful to not conflate slots with traffic rights under the US-EU Agreement, we are deeply troubled by the notion that new entrants will be completely foreclosed from slot access at AMS, without any secondary or alternative means to obtain access at AMS, particularly if those alternative options are precluded on a basis that is discriminatory toward unaligned or unaffiliated carriers. As we have conveyed to the Dutch Ministry before, we believe this step poses a serious risk to the open-entry predicate required for the Department’s grants of antitrust immunity to joint ventures operating in the US- AMS market.” The US DOT remains hopeful to find a solution during the consultations that start on November 13: “It is our hope that these consultations will result in meaningful progress towards resolution, without our needing to pursue further regulatory action. However, should consultations fail to produce a meaningful path toward resolving this matter in a timely and satisfactory fashion, the Department stands ready to consider any further action that may be appropriate.”

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