Increase in airport charges turn on the alarms in Europe

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Increase in airport charges turn on the alarms in Europe
Source: Twitter @Schiphol
April 25, 2022

IATA warns that retouching operating costs could complicate the recovery of the air market in the old continent

The International Air Transport Association (IATA) has warned that a proposed 37% increase in airport charges in the Netherlands risks significantly damaging the recovery of air connectivity in the country.

Following a formal review involving IATA and several airlines, the airport charges regulator at Schiphol, ACM, issued a decision on April 21 accepting the airport's position that due to losses sustained during the COVID closure -19, should increase airport fees. by 37% accumulated in the next three years.

Air travel has yet to recover from COVID-19, the biggest shock in aviation history. The impacts in the Netherlands were acute: at its height, COVID-19 caused passenger numbers to drop by more than 70%, costing around 200,000 aviation-supported jobs. A gradual recovery is taking place, but the foundations are weak.

The IATA Connectivity Index shows that the Netherlands is still 35% below its 2019 peak. At this crucial time, for the benefit of the Netherlands as a whole, air connectivity must be supported. Unfortunately, ACM's decision puts the country's position as one of the most competitive European air transport hubs at risk.

The Dutch regulator's stance contrasts sharply with the position taken by other independent regulators in the region, which are trying to fulfill their duties to protect the consumer.

In Spain, the regulator rejected claims by the airport operator that it needed to recoup its losses from the pandemic. The Spanish regulator calculated that the airport operator had enough cash reserves to cover the shortfall and that it would benefit from traffic growth in the coming years, and has frozen fees for the next three years.

Schiphol is in a similar situation, and the regulator should be just as strong. Before the pandemic, Schiphol declared €742 million in dividends during the 2015-19 period and has several options to cover its losses. Schiphol can easily finance short-term losses without increasing costs for its customers. 

“Schiphol Airport and its regulator have not fully taken into account the exceptional circumstances created by COVID-19. The cost recovery system was never expected to operate in circumstances where demand would collapse completely for an extended period due to government-imposed travel restrictions. It cannot be reasonable to dump a 37% increase on airlines and their passengers. It is also unwise to allocate such costs to air transport in the Netherlands at a time when other cost pressures, including increased environmental taxes, are already damaging the competitive position of Dutch aviation," said Rafael Schvartzman, Regional Vice President of IATA for Europe.

IATA is considering appealing the decision.



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