Day: April 6, 2023

The Hague – The International Air Transport Association (IATA) reacted positively to the decision by the Dutch court to uphold the legal challenges lodged by IATA, KLM and other airlines against the Dutch government’s ‘experimental regulation’ to cut Schiphol airport’s flight limit to 460,000 from November 2023.

IATA Director General Willie Walsh said: “We welcome the judge’s decision. This case has been about upholding the law and international obligations. The judge has understood that the Dutch government violated its obligations in shortcutting processes that would bring scrutiny to its desire to cut flight numbers at Schiphol. This decision gives vital stability for this year to the airlines using Schiphol airport and maintains the choice and connectivity passengers value.

Winning this vital reprieve is good news for Schiphol’s passengers, Dutch businesses, the Dutch economy and airlines. But the job is not done. The threat of flight cuts at Schiphol remains very real and is still the stated policy of the government. Schiphol airport themselves yesterday announced night flight cuts without consultation. Airlines understand the importance of resolving issues such as noise. The Balanced Approach is the correct EU and global legally-enshrined process for managing noise impacts. It has helped airports around the world successfully address this issue.”

Q&A

What was the legal challenge about?

The Dutch government has recently decided to reduce the number of flight movements at Schiphol from 500,000 to 440,000 per year. We believed no legal basis existed for this reduction: it violates international treaties and European regulations. Governments can lower the number of flight movements in order to reduce noise, but only after having after a careful process, consisting of e.g. assessing the current noise level, setting a noise goal and considering alternative measures. This did not occur. The 440,000 cap is not a means to an end, but the objective. The Dutch government also sought to accelerate the implementation of this reduction by introducing an experimental regulation with an interim cap of 460,000 flight movements from 1 November 2023. We believed this interim cap is also subject to – and therefore in violation of – international treaties and European regulations.

IATA and airlines that fly into Schiphol sought to halt the application of this experimental regulation. KLM and other carriers based at Schiphol have launched a similar legal action. The carriers that joined IATA’s action were: Air Canada, United Airlines, FedEx, JetBlue, British Airways, Vueling, Lufthansa, and Airlines for America.

What was the judge’s decision?

The judge ruled that the State had not followed the correct procedure in introducing the proposed temporary regulation. According to European rules, the State can only reduce the number of aircraft movements at an airport after going through a careful process. This process entails, among other things: the State must identify various measures that can reduce noise pollution, the State must consult all interested parties, and a reduction in the number of aircraft movements is only allowed if it is clear that other measures to limit noise pollution are insufficient. The Interim Injunction Judge noted that the State had started that procedure for the proposed reduction of the number of aircraft movements to 440,000 per year starting in the 2024/2025 season. But the State did not follow this procedure for the proposed temporary regulation in which the State wants to reduce the maximum number of allowed aircraft movements to 460,000 for the upcoming 2023/2024 season. Therefore the ruling states that the Dutch State may not reduce the number of aircraft movements at Schiphol from 500,000 to 460,000 for the season 2023/2024.

 Why had the Dutch government ordered a cut in flight numbers?

The Minister for Water and Infrastructure in the coalition Dutch government is responding to the concerns of some residents who are principally concerned about noise. Local air quality and some greenhouse gas emissions (nitrogen and CO2) have also been listed as ‘concerns’ but are not the reason for the cut. A letter (24.6.22) from Minister Marc Harbers to the President of the House of Representatives in the Hague states that the noise nuisance is the objective, but the Minister also admits that he has not yet investigated noise nuisance or set a specific nuisance objective, which are both requirements before being allowed to apply such restrictions:

On what basis were IATA and other plaintiffs seeking to have the ‘experimental regulation’ ruled unlawful?

IATA and the co-plaintiffs believe that the Dutch government must follow the Balanced Approach (BA), a process and methodology for mitigating noise at airports. The BA, which is enshrined in ICAO Annex 16 (part of the Chicago Convention, to which the Netherlands is party), international treaties and also in European Regulation 598/2014, explicitly states that flight reductions should be a last resort, only used when other possible measures have been exhausted. These measures include an objective determination of the noise situation and the noise objective; an inventory of possible measures; an estimation of the cost-effectiveness of those measures; operating restrictions as a last resort; and the principles of proportionality and non-discrimination. In IATA’s view, the government has not followed this process.

Why does this matter so much to airlines?

There are multiple reasons, including:

•             The need for clarity of the application of the BA in international and European law. Airlines wish to have legal certainty and a government should be compliant with its legal obligations. •             The most pressing priority is to have certainty for the Winter Season schedules, which are

Geneva – The International Air Transport Association (IATA) released data for February 2023 global air cargo markets showing that air cargo demand rose above pre-pandemic levels.

•             Global demand, measured in cargo tonne-kilometers (CTKs*), fell 7.5% compared to February 2022 (-8.3% for international operations). This was half the rate of annual decline seen in the previous two months (-14.9% and -15.3% respectively). February demand for air cargo was 2.9% higher than pre-pandemic levels (February 2019)—the first time it has surpassed pre-pandemic levels in eight months.

•             Capacity (measured in available cargo tonne-kilometers, ACTK) was up 8.6% compared to February 2022. The strong uptick in ACTKs reflects the addition of belly capacity as the passenger side of the business continues to recover. International belly-capacity grew by 57.0% in February year-over-year, reaching 75.1% of the 2019 (pre-pandemic) capacity.

 •            Several factors in the operating environment should be noted:

 o            The global new export orders component of the manufacturing PMI, a leading indicator of cargo demand, continued to increase in February. China’s PMI level surpassed the critical 50-mark indicating that demand for manufactured goods from the world’s largest export economy is growing.

o             Global goods trade decreased by 1.5% in January; this was a slower rate of decline than the previous month of -3.3%.

o             The Consumer Price Index for G7 countries decreased from 6.7% in January to 6.4% in February. Inflation in producer (input) prices reduced by 2.2 percentage points to 9.6% in December (last available data).

”The story of air cargo in February is one of slowing declines. Year-on-year demand fell by 7.5%. That’s half the rate of decline experienced in January. This shifting of gears was sufficient to boost the overall industry into positive territory (+2.9%) compared to pre-pandemic levels.  An optimistic eye could see the start of an improvement trend that leads to market stabilization and  a return to more normal demand patterns after dramatic ups-and-downs in recent years,” said Willie Walsh, IATA’s Director General.

February (% year-on-year)          World share1     CTK        ACTK     CLF (%-pt)2         CLF (level)3

Total Market      100.0%  -7.5%     8.6%      -7.9%     45.6%

Africa    2.0%      -3.4%     4.7%      -3.9%     46.8%

Asia Pacific          32.4%    -6.0%     19.9%    -12.8%  46.4%

Europe 21.8%    -15.3%  -1.5%     -9.4%     57.4%

Latin America     2.7%      -2.7%     27.6%    -11.2%  36.1%

Middle East        13.0%    -8.1%     9.3%      -8.4%     44.5%

North America  28.1%    -3.2%     2.8%      -2.5%     40.0%

1 % of industry CTKs in 2022  2 Change in load factor  3 Load factor level

February Regional Performance

•             Asia-Pacific airlines saw their air cargo volumes decrease by 6.0% in February 2023 compared to the same month in 2022. This was a significant improvement in performance compared to January (-19.0%).  Airlines in the region benefitted from China’s reopening, which saw restrictions lifted and economic activities resumed. Available capacity in the region increased by 19.9% compared to February 2022 as more and more belly capacity came online from the passenger side of the business.

•             North American carriers posted a 3.2% decrease in cargo volumes in February 2023 compared to the same month in 2022. This was a solid improvement in performance compared to January (-8.7%).  Notably, the region saw a significant increase in international demand in February which boosted its market share in international cargo traffic to beyond pre-pandemic levels (21.7% in Feb 2023 versus 18.2% in Feb 2019). Capacity increased 2.8% compared to February 2022.

•             European carriers saw the weakest performance of all regions with a 15.3% decrease in cargo volumes in February 2023 compared to the same month in 2022. This was an improvement in performance compared to January (-20.4%). Airlines in the region continue to be most affected by the war in Ukraine. Capacity decreased 1.5% in February 2023 compared to February 2022.

•             Middle Eastern carriers experienced an 8.1% year-on-year decrease in cargo volumes in February 2023. This was a slight improvement to the previous month (-11.8%). Capacity increased 9.3% compared to February 2022.

•             Latin American carriers reported a 2.7% decrease in cargo volumes in February 2023 compared to February 2022. This was a drop in performance compared to January which saw a 4.6% increase. Capacity in February was up 27.6% compared to the same month in 2022. 

•             African airlines saw cargo volumes decrease by 3.4% in February 2023 compared to February 2022. This was an improvement in performance compared to the previous month (-9.5%). Notably, the Africa to Asia route area experienced significant cargo demand growth in February, up 39.5% year-on-year. Capacity was 4.7% above February 2022 levels.