Schiphol edges closer to solution for freighter slot shortage

Schiphol edges closer to solution for freighter slot shortage

 

The rapid rise of leisure travel and low-cost carriers calling at Amsterdam's Schiphol Airport has limited the availability of slots that disproportionately affect freighters, hurting the airport's air cargo business. Photo credit: Shutterstock.com.

Amsterdam's Schiphol Airport is finally in sight of a solution to the long-running freighter slot shortage that has dragged down its air cargo volume and raised concerns over the complex’s status as a regional consolidation hub.

Progress is being made in ongoing talks with the government and air cargo stakeholders — including the airport’s biggest customers — to create a pool of slots dedicated to freighters within the legal framework that governs slot allocation, according to Bart Pouwels, Schiphol's head of cargo. 

“We hope to receive an answer on establishing a pool of cargo slots within the next six months,” Pouwels told JOC.com. “The government has asked business for its views and they are consistent with ours.”

The slot shortages are having a brutal impact on the airport’s cargo business. From January through September, a 13 percent drop in freighter traffic as a direct result of the lack of slots saw cargo volume from freighters falling 15.2 percent. With weak global trade and slowing economies putting the brakes on demand, the airport can ill-afford volume-limiting slot issues. 

“We are suffering from two sides. On top of the slot constraints, we are also suffering from the cargo market that is declining,” said Pouwels. 

Schiphol handled 136,819 tonnes (150,817 US tons) in September, a 6 percent decline from the same month last year. Through September, every month this year has recorded a decline in year-over-year volume.

Europe’s other air cargo hubs are in the same boat. The region’s largest air cargo airport of Frankfurt reported a 5.5 percent decline in September tonnage year over year and is down 3 percent in the first nine months. London Heathrow cargo declined almost 12 percent in September compared with the same month last year, and the airport was 6 percent down January through September year over year.

According to the International Air Transport Association (IATA), weaker manufacturing conditions for exporters in Germany, softer regional economies, and ongoing uncertainty over Brexit has continued to impact Europe air freight, where airlines in September posted a 3.3 percent decrease in freight demand compared with the same period a year earlier.

Use it or lose it rule 

The rapid growth in leisure travel has seen many hub airports around the world battling with slot constraints. Under the slot system, IATA requires all carriers, both freighter operators and passenger airlines, to operate at least 80 percent of the services to airports that they have planned, and compliance will allow the carriers to hold on to their designated slots. But it is a use-it-or-lose-it ruling that disproportionately affects freighter flights because of the more haphazard nature of air cargo demand compared with strictly scheduled passenger flights.

Following Schiphol’s severe space constraints that affected 2017 and 2018 freighter traffic, a “local rule” was introduced where airlines would return slots that were unused to the pool, and 25 percent of those returned slots would be allocated to full freighter flights.

But Pouwels said hardly any slots were returned to the pool, and "25 percent of very little is still very little. Airlines tend to keep their slots for themselves until the last moment until they know for sure they can’t use it and no one else can. We need to find a decent long-term solution."

He said the shortage of slots at Schiphol would remain until November 2020 with the maximum number of aircraft movements capped at 500,000 until then. After that, there would be room for limited growth following approval from the Dutch Minister of Transport for the allocation of an additional 40,000 aircraft movements to the airport until 2050.

But without a slot pool for freighters, the shortages that have plagued the airport over the last three years would be a recurring problem and one that would have dire consequences for Schiphol. The slots for all-cargo aircraft are a critical component of the airport’s regional hub status.

“If we can’t find a solution, you will see fewer freighters calling, and forwarders will start to consider relocating their business to other hubs where there are more combined freighter and passenger flights,” Pouwels said. 

“Forwarders generate by far the largest part of our cargo and they use freighters and passenger airlines to optimize their cargo mix,” he added. Freighters account for 57 percent of the cargo volume at Schiphol, with the rest arriving and departing in the bellies of passenger aircraft. “If you take the freighter part out, they cannot optimize their business in Amsterdam and will look for alternatives. That is a very serious situation for us that we don’t want to allow to happen.”

The importance of Schiphol as a forwarder consolidation point was illustrated during the severe slot shortages of 2018, a year in which freighter movements fell by 10.88 percent, but volume was down only 2.5 percent. Pouwels said this was because freighters unable to land at Schiphol were dropping cargo off at other Europe hubs where forwarders were collecting it and trucking the cargo to Amsterdam.

“This is a forwarder consolidation hub, so losing freighters is not sustainable. Logistics is a key business driver for our economy, and we need to get our act together,” he said.

Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler.