Air France-KLM warns of strategy review on Schiphol capacity cut

BLOOMBERG

Air France-KLM said it may be forced to adjust operations after the Dutch government won permission to curtail capacity at Amsterdam Schiphol, the main airport for the KLM subsidiary.
The number of flights at Schiphol airport can be scaled back between the end of the year and October 2024, an appeals court ruled, revoking an earlier decision by a local court. The state has outlined plans to eventually cut Schiphol Airport’s annual flight capacity to 440,000 flights by 2024, equal to a 12% reduction.
The verdict is a loss for airlines including KLM, Delta Air Lines Inc, EasyJet Plc and the International Air Transport Association (Iata) lobbying group, which has dubbed the Amsterdam airport the worst in the world because of what it sees as a disconnect between low performance and high fees.
Almost 53 million passengers flew through Schiphol last year. It has the most direct flight connections of any airport in Europe, according to data from Airports Council International Europe, beating out Istanbul and London Heathrow.
“Air France-KLM Group will have no choice but to adjust its strategy to maintain its European market share within a global industry,” should the Dutch government enforced this reduction, according to a statement by the airline group. The Dutch Cabin Crew Association also voiced concern about possible job cuts as airlines might move capacity elsewhere.
The ruling comes three months after a court concluded that the government’s attempts to minimise noise by cutting the number of flights that can go in and out of Schiphol airport did not follow the correct procedures.
In its ruling, the court said that any fear by airlines of suffering serious damage as a result of the proposed measures was no reason to arrive at a different outcome.
The court ruled that the government’s proposed measures aren’t in conflict with the rules of national and European law, nor are they against “the general principles of good administration,” according to a statement. It said that European rules of the balanced approach, which is a process that outlines best practices for implementing airport capacity restrictions for purposes of noise control, don’t apply to the government’s proposal.
Airlines and lobby groups maintain the reduction plan violates international regulations and inconveniences travellers. As a first step, the government proposed a temporary regulation to cap the number of flights from November this year at 460,000 — down from the current limit of 500,000.
Schiphol airport said it expected the Dutch government to provide further clarity about the number of flights within two months, which will be needed for it to determine the capacity declaration for the 2024 summer season. It plans to continue plans for a night closure, banning of private jets and the noisiest aircraft announced in April.
Lobby group Iata had recently dubbed Schiphol airport the “worst airport in the world,” with reference to a recent landing fee increase.
“The disruption is terrible, performance is dreadful and at the same time they want to increase charges,” Iata’s Willie Walsh said at the group’s annual meeting in Istanbul.