Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
737307
Topic Author
Posts: 2945
Joined: Tue Dec 26, 2017 6:27 pm

IATA Takes Legal Action to End Dutch Slot Rule

Mon Oct 18, 2021 7:57 pm

The International Air Transport Association (IATA) has started legal action in the Netherlands in order to prevent the implementation of a new Policy Rule for slot allocation, which would harm the functioning system of slot allocation on the global level and lead to commercial damage for IATA members.


https://www.schengenvisainfo.com/news/i ... slot-rule/

This article is very confusingly written, IMO.
Is this related to the preferential treatment of KLM at AMS? If so, will a successful lawsuit lead to more opportunities for other airlines, like JetBlue?
 
PSAatSAN4Ever
Posts: 1300
Joined: Thu Sep 13, 2018 5:38 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Mon Oct 18, 2021 8:25 pm

It's a confusing article because it talks about this new "policy rule" as if everyone already understood what it meant and what it was to do. For outsiders, I don't have any context for what this rule is, what it is supposed to do, how it interferes with EU law, and whatever else is believed to be a conflict.

The last I heard anything about slots at Schipol was that new destinations couldn't be added until another destination was dropped, but that was pre-quarantine.
 
User avatar
lightsaber
Moderator
Posts: 23102
Joined: Wed Jan 19, 2005 10:55 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Mon Oct 18, 2021 8:41 pm

PSAatSAN4Ever wrote:
The last I heard anything about slots at Schipol was that new destinations couldn't be added until another destination was dropped, but that was pre-quarantine.

Is that true? Is there a link? I can understand a flight for flight, but as new regions reach economic ties to Europe or the Netherlands, they cannot be connected without someone (probably KLM) dropping an established route? That is... unreal.

Lightsaber
 
User avatar
LAXintl
Posts: 25640
Joined: Wed May 24, 2000 12:12 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Mon Oct 18, 2021 9:00 pm

First, its not just against AMS but also covers Eindhoven and Rotterdam and seeks to stop new allocation rules set to come into effect Q3 2022 in the Netherlands.

IATA contends the new rules which were implemented unilaterally go against both EU regulations, and IATA members agreement on a global system of slot allocation.

IATA's arguments are that the local Netherland rules would remove the basic principle and role of an impartial slot coordinator as the new process guides airports to follow revised allocation criteria such as a flights destination, type of service (freight vs pax), connectivity opportunity, type of aircraft, etc.

Frankly, should this policy move forward it really opens a can of worms and can create the balkanization of the global slot process. For years the industry has been trying to achieve a more standardized and predictable system versus every nation following their own random policy.
 
Dominion301
Posts: 3064
Joined: Wed Jul 20, 2016 1:48 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Mon Oct 18, 2021 10:16 pm

lightsaber wrote:
PSAatSAN4Ever wrote:
The last I heard anything about slots at Schipol was that new destinations couldn't be added until another destination was dropped, but that was pre-quarantine.

Is that true? Is there a link? I can understand a flight for flight, but as new regions reach economic ties to Europe or the Netherlands, they cannot be connected without someone (probably KLM) dropping an established route? That is... unreal.

Lightsaber


Not really. As far as I know, in order for an existing airline to add a new route, they needed to reduce frequency on an existing route. That reduced frequency route could still see a net increase in seat capacity if aircraft gauge were to increase.
 
MIflyer12
Posts: 10196
Joined: Mon Feb 18, 2013 11:58 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Mon Oct 18, 2021 11:49 pm

LAXintl wrote:
Frankly, should this policy move forward it really opens a can of worms and can create the balkanization of the global slot process. For years the industry has been trying to achieve a more standardized and predictable system versus every nation following their own random policy.


No disrespect to you, LAXintl, but let's run that through the BS translator:

The industry hates any attempt to regulate it and resents nations expressing their sovereignty. Let IATA try that with China.

Maybe the IATA will win in court, but I suspect the Netherlands has an adequacy of well-trained lawyers who are confident of a mechanism to support the new slot rule.
 
User avatar
spinotter
Posts: 916
Joined: Wed May 27, 2015 1:37 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Tue Oct 19, 2021 3:47 am

MIflyer12 wrote:
LAXintl wrote:
Frankly, should this policy move forward it really opens a can of worms and can create the balkanization of the global slot process. For years the industry has been trying to achieve a more standardized and predictable system versus every nation following their own random policy.


No disrespect to you, LAXintl, but let's run that through the BS translator:

The industry hates any attempt to regulate it and resents nations expressing their sovereignty. Let IATA try that with China.

Maybe the IATA will win in court, but I suspect the Netherlands has an adequacy of well-trained lawyers who are confident of a mechanism to support the new slot rule.


Are there actually international laws which regulate the allocation of slots by individual airports and nations? If so, what laws and what international body promulgates and governs them?
 
User avatar
mercure1
Posts: 5292
Joined: Sun Jul 13, 2008 5:13 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Tue Oct 19, 2021 4:17 am

spinotter wrote:
Are there actually international laws which regulate the allocation of slots by individual airports and nations? If so, what laws and what international body promulgates and governs them?


Yes, for example, the EU has had common regulations for allocation of slots since 1993 and also regulations since 2008 common rules about neutrality, transparency and non-discrimination in their use.

Also have other agencies like ICAO (UN agency) which has adopted and accepted Worldwide Slot Guideline which IATA is given to authority to facilitate. WSG is meant as a process to avoid having different rules and procedures for slot allocation and provide global consistency.

I agree that Dutch making up different rules is a step backward for the standardization industry has sought to achieve since slots programs first arrived in 1970s, and in the worst case is blatant discrimination against some operators and routes they may serve.
 
User avatar
usdcaguy
Posts: 1665
Joined: Mon Jan 26, 2004 12:41 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Tue Oct 19, 2021 1:45 pm

The fact that Schiphol Airport wants to allocate slots based on how many frequencies they already have to currently served cities may sound logical, but it discriminates against new competitors. On AMS-NYC, for example, there are already over 28 slots being used (2 flights a day into and out of AMS), which is the threshold cited in the documentation. Currently, KL and DL alone use 42 slots while UA uses 14. So basically, there will never be any slots available to B6 the way that things are set up. I highly doubt this is what the Dutch traveling public would like to see in terms of new competition and lower fares, as the game is rigged to protect incumbent carriers like KL. IATA has a right to complain about this. Stifling competition to protect your national carrier(s) is a no-no.
 
kalvado
Posts: 3397
Joined: Wed Mar 01, 2006 4:29 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Tue Oct 19, 2021 3:06 pm

usdcaguy wrote:
The fact that Schiphol Airport wants to allocate slots based on how many frequencies they already have to currently served cities may sound logical, but it discriminates against new competitors. On AMS-NYC, for example, there are already over 28 slots being used (2 flights a day into and out of AMS), which is the threshold cited in the documentation. Currently, KL and DL alone use 42 slots while UA uses 14. So basically, there will never be any slots available to B6 the way that things are set up. I highly doubt this is what the Dutch traveling public would like to see in terms of new competition and lower fares, as the game is rigged to protect incumbent carriers like KL. IATA has a right to complain about this. Stifling competition to protect your national carrier(s) is a no-no.

The other aspect of it - they want a lot of direct connectivity to smaller cities, which have small, if any, airline bases.
While KL can make routes like AMS-KIV or AMS-POZ (Kishinev aka Chișinău and Poznan) work with onward connections, there is no way to make that work without a hub.
Local carriers can funnel that traffic through their hubs serving multiple spokes, but 2 flights a day rule would quickly kick in (assuming 1 of those flights is KL to begin with)
List of what they want to serve is here:
https://slotcoordination.nl/wp-content/ ... -Final.pdf
 
737307
Topic Author
Posts: 2945
Joined: Tue Dec 26, 2017 6:27 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Tue Oct 19, 2021 4:11 pm

usdcaguy wrote:
The fact that Schiphol Airport wants to allocate slots based on how many frequencies they already have to currently served cities may sound logical, but it discriminates against new competitors. On AMS-NYC, for example, there are already over 28 slots being used (2 flights a day into and out of AMS), which is the threshold cited in the documentation. Currently, KL and DL alone use 42 slots while UA uses 14. So basically, there will never be any slots available to B6 the way that things are set up. I highly doubt this is what the Dutch traveling public would like to see in terms of new competition and lower fares, as the game is rigged to protect incumbent carriers like KL. IATA has a right to complain about this. Stifling competition to protect your national carrier(s) is a no-no.


The proposed rule also seems to fly in the face of the intent of the Open Skies Treaty between the US and Europe.
 
User avatar
vfw614
Posts: 4068
Joined: Mon Dec 10, 2001 12:34 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Tue Oct 19, 2021 8:53 pm

I guess the Durch government will point out that the IATA is merely is a trade organization promoting the business interests of its members (if things turn nasty, the Dutch probably will remind IATA that a government serves the public interest whereas the IATA has faced all kinds of antitrust problems in the past).
 
User avatar
Tugger
Posts: 11534
Joined: Tue Apr 18, 2006 8:38 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Tue Oct 19, 2021 10:15 pm

It feels like EU nations are not allowed to determine "best use" of constricted internal resources? Railway, vehicle, agriculture, energy resources, etc.?

Tugg
 
davidjohnson6
Posts: 1675
Joined: Mon Jun 20, 2016 10:10 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Tue Oct 19, 2021 10:26 pm

It seems there is a bit of a conflict around different people having different ideas as to what makes for a good airport. On the one hand, some people want low prices to a modest number of core destinations, while other people want non-stop flights to as many destinations as possible. Both concepts are useful to the passengers using an airport and the local resident population, but when an airport is constrained by things like number of runways, terminal capacity, seasonalilty, noise and number of movement restrictions, etc... you can't have unlimited quantities of everything. We already accept the authotity of national Govt to set limits over the operations of an airport - e.g. noise at night, so it's clear that ICAO, airport investors and airlines do not have unlimited powers
Ultimately, who should have the final say over how slots are used ?
Last edited by davidjohnson6 on Tue Oct 19, 2021 10:30 pm, edited 1 time in total.
 
User avatar
Dutchy
Posts: 12693
Joined: Sat Nov 03, 2007 1:25 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Tue Oct 19, 2021 10:30 pm

Tugger wrote:
It feels like EU nations are not allowed to determine "best use" of constricted internal resources? Railway, vehicle, agriculture, energy resources, etc.?

Tugg


sure they can, while observing all kinds of EU directives which the nations have agreed to.
 
User avatar
eurotrader85
Posts: 297
Joined: Wed Oct 24, 2018 8:45 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 9:31 am

davidjohnson6 wrote:
It seems there is a bit of a conflict around different people having different ideas as to what makes for a good airport. On the one hand, some people want low prices to a modest number of core destinations, while other people want non-stop flights to as many destinations as possible. Both concepts are useful to the passengers using an airport and the local resident population, but when an airport is constrained by things like number of runways, terminal capacity, seasonalilty, noise and number of movement restrictions, etc... you can't have unlimited quantities of everything. We already accept the authotity of national Govt to set limits over the operations of an airport - e.g. noise at night, so it's clear that ICAO, airport investors and airlines do not have unlimited powers
Ultimately, who should have the final say over how slots are used ?


The free market. It's right this is challenged. The government/coordinator is not the entity that is best at deciding what destinations pax can fly to from a specific place. If more people flying out of AMS want to fly to NYC rather than MSQ then operators should be allowed to supply that, should the market conditions make sense. Instead, they will have to pay higher and higher fares than they otherwise would have on the artificially restricted supply enforced. The Netherlands refuses to allow the trade of slots at AMS, unlike the UK where the free market dictates the price in the grey market and those who can make the operation worthwhile at the true cost to operate at the restricted infrastructure. This policy rule has nothing to do with 'opening new markets' and is solely trying to protect KLM, at the expense of competition, against the benefits of the wider paying public, given a hub operator are the only entity that can sustainably operate destinations in the list such as HFE, YEA etc. If these destinations were already marketable then KLM would already have served these from its vast bank of slots it holds at AMS, or even less likely a local operator at these small destinations. They are not to be held in reserve for the idea that one day KLM may decide to operate them.

The assertion by IATA is correct. It contravenes EU law by blocking other operators in the single market who happen to base operations elsewhere and want to operate specific routes or increase frequency, and it makes a mockery when the EU agrees on open skies agreements with other territories allowing unlimited access both ways with the US, Qatar, Asean etc, all at the expense of businesses and the consumer, just to protect a national champion in KLM.
 
factsonly
Posts: 3196
Joined: Mon Aug 06, 2012 3:08 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 11:02 am

eurotrader85 wrote:

The free market. It's right this is challenged. The government/coordinator is not the entity that is best at deciding what destinations pax can fly to from a specific place.

The assertion by IATA is correct.


Eurotrader sums up the problem perfectly, but does so from a 'free market' point of view.
And....... that is precisely the 'old school' view which the Netherlands Government wishes to challenge with some new thinking.

The view of the Netherlands Government is that 'free market' thinking in air transport is 'old school' and that in future, a new more advanced society sets clear targets for the air transport sector.
This view questions whether air transport is; (A) national 'infrastructure' or (B) just another commercial industry.

A. If it is 'national infrastructure', than it receives state investments, for which a nation, in return, must determine its allocation of scarce resources.
B. If it is just another commercial industry, than state investments should be less forthcoming and airlines must finance there own infrastructure and can be wholly "for profit".

Regretfully the air transport industry has been neither A or B.
For the past decades, Government has invested heavily in infrastructure with a strong focus on the well-being of the airlines (IATA) and perhaps with less focus on its overall economy/society.
This is now changing.........

Now....with ever stricter environmental legislation and increasing need to cut undesirable 'cheap' flying, the NL Government believes time has come for society to express clear views on the contribution of its air infrastructure to society, and therefore time has come to focus on what is essential connectivity and what is less essential.

The view is that public investment in a capacity restricted and environmentally focussed airport, can only be maintained if society gets to say how this airport is used to the benefit of overall society.
The Government's position is, that this investment is not made for the airlines to get a complete free hand, to make as much money as THEY wish.
The NL Government believes that in a new more constrained air transport environment, society must determine where precious capacity and resources are best allocated to serve the overall economy.

So this IATA court case will be about:
1. The Government's freedom to allocate scarce resouces to serve a nation's overall needs.
2. The rights of commercial airlines (IATA) to make as much money as they desire, based on Government investments in airport infrastructure

Time will tell, if the aviation community is ready to move on to new views on its contribution to our overall society.
 
User avatar
Polot
Posts: 12418
Joined: Thu Jul 28, 2011 3:01 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 11:17 am

Tugger wrote:
It feels like EU nations are not allowed to determine "best use" of constricted internal resources? Railway, vehicle, agriculture, energy resources, etc.?

Tugg

Sure. But airport slots are not an “internal resource” unless the Dutch government decides to make those airports only to open to domestic flights on domestic airlines. International airports and international slots obvious involve external countries, meaning your resource is no longer strictly internal. Other countries don’t have a natural right to have access to AMS, but on the other sign of the coin KLM and other Dutch airlines do not have a natural right to have access to other countries. So you have to determine “best use” of constricted resources that also does not violate signed bilateral agreements, treaties, etc.

If you do violate them you have to accept the consequences (eg KL may find it more difficult to fly to other countries at desired frequencies, might have JVs pulled, etc).
 
User avatar
c933103
Posts: 5814
Joined: Wed May 18, 2016 7:23 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 11:51 am

MIflyer12 wrote:
LAXintl wrote:
Frankly, should this policy move forward it really opens a can of worms and can create the balkanization of the global slot process. For years the industry has been trying to achieve a more standardized and predictable system versus every nation following their own random policy.


No disrespect to you, LAXintl, but let's run that through the BS translator:

The industry hates any attempt to regulate it and resents nations expressing their sovereignty. Let IATA try that with China.

Maybe the IATA will win in court, but I suspect the Netherlands has an adequacy of well-trained lawyers who are confident of a mechanism to support the new slot rule.

It is favoring developed countries and economies against developing countries/economies with rising demand, banning developing countries/economies from adding flights to destinations unless they can provide higher yield than established destinations.
You might say the limit is against airlines, but with airlines operating based on the principle of business, we all know how such rule would turn out.

Tugger wrote:
It feels like EU nations are not allowed to determine "best use" of constricted internal resources? Railway, vehicle, agriculture, energy resources, etc.?

Tugg


According to posts above, the rule doesn't only apply to slot-constrained airports, but to all airports even including those without slot constrain.
 
kalvado
Posts: 3397
Joined: Wed Mar 01, 2006 4:29 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 1:23 pm

factsonly wrote:
eurotrader85 wrote:

The free market. It's right this is challenged. The government/coordinator is not the entity that is best at deciding what destinations pax can fly to from a specific place.

The assertion by IATA is correct.


Eurotrader sums up the problem perfectly, but does so from a 'free market' point of view.
And....... that is precisely the 'old school' view which the Netherlands Government wishes to challenge with some new thinking.

The view of the Netherlands Government is that 'free market' thinking in air transport is 'old school' and that in future, a new more advanced society sets clear targets for the air transport sector.
This view questions whether air transport is; (A) national 'infrastructure' or (B) just another commercial industry.

A. If it is 'national infrastructure', than it receives state investments, for which a nation, in return, must determine its allocation of scarce resources.
B. If it is just another commercial industry, than state investments should be less forthcoming and airlines must finance there own infrastructure and can be wholly "for profit".

Regretfully the air transport industry has been neither A or B.
For the past decades, Government has invested heavily in infrastructure with a strong focus on the well-being of the airlines (IATA) and perhaps with less focus on its overall economy/society.
This is now changing.........

Now....with ever stricter environmental legislation and increasing need to cut undesirable 'cheap' flying, the NL Government believes time has come for society to express clear views on the contribution of its air infrastructure to society, and therefore time has come to focus on what is essential connectivity and what is less essential.

The view is that public investment in a capacity restricted and environmentally focussed airport, can only be maintained if society gets to say how this airport is used to the benefit of overall society.
The Government's position is, that this investment is not made for the airlines to get a complete free hand, to make as much money as THEY wish.
The NL Government believes that in a new more constrained air transport environment, society must determine where precious capacity and resources are best allocated to serve the overall economy.

So this IATA court case will be about:
1. The Government's freedom to allocate scarce resouces to serve a nation's overall needs.
2. The rights of commercial airlines (IATA) to make as much money as they desire, based on Government investments in airport infrastructure

Time will tell, if the aviation community is ready to move on to new views on its contribution to our overall society.

Problem is, AMS has few, if any any domestic flights as far as I can tell; and the rule lists only international destinations - mostly outside of EU.
So if it comes to government taking care for people of NL (like Pieter Elbers), governments at the other end of affected routes may have their say about the situation as well.
 
User avatar
vfw614
Posts: 4068
Joined: Mon Dec 10, 2001 12:34 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 2:01 pm

Well, with slots being a finite resource in times where concreting over more and more landscape for additional airport infrastructure has become somewhat unpopular, I guess some clean-sheet approach to slot allocation has to be taken at some point should air traffic continue to grow. Should those airlines with the deepest pockets or the oldest grandfather rights have access or those deemed to offer services which best serve the "common interest", however and by whomever defined. It is an interesting challenge for the future.
 
kalvado
Posts: 3397
Joined: Wed Mar 01, 2006 4:29 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 2:16 pm

vfw614 wrote:
Well, with slots being a finite resource in times where concreting over more and more landscape for additional airport infrastructure has become somewhat unpopular, I guess some clean-sheet approach to slot allocation has to be taken at some point should air traffic continue to grow. Should those airlines with the deepest pockets or the oldest grandfather rights have access or those deemed to offer services which best serve the "common interest", however and by whomever defined. It is an interesting challenge for the future.

I would see a reflection of hub-and-spoke vs point-to-point model here.
After all, what NL wants is more smaller spokes, whether spokes from AMS or EIN acting as a spoke for other large cities - with lesser quality of travel for existing major routes; hence reduced connecting opportunities for some, but possibly improved connection for new spokes.
Solidifying KLM standing as a home carrier may even be an unexpected consequence here.

I, for one, live in a pretty remote spoke; our airport has no chance of benefiting from improvements. Pretty much all my travel involves either connection at a hub (sometimes air-to-ground connection), and maybe more that one such connection. I can benefit from more competition in a nearby megahub, though.
Long story short - I can definitely see how such approach helps AMS population. I am undeniably loosing on that. So I wouldn't feel bad if there is a counterpush against KLM over all this.
 
User avatar
c933103
Posts: 5814
Joined: Wed May 18, 2016 7:23 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 2:23 pm

kalvado wrote:
vfw614 wrote:
Well, with slots being a finite resource in times where concreting over more and more landscape for additional airport infrastructure has become somewhat unpopular, I guess some clean-sheet approach to slot allocation has to be taken at some point should air traffic continue to grow. Should those airlines with the deepest pockets or the oldest grandfather rights have access or those deemed to offer services which best serve the "common interest", however and by whomever defined. It is an interesting challenge for the future.

I would see a reflection of hub-and-spoke vs point-to-point model here.
After all, what NL wants is more smaller spokes, whether spokes from AMS or EIN acting as a spoke for other large cities - with lesser quality of travel for existing major routes; hence reduced connecting opportunities for some, but possibly improved connection for new spokes.
Solidifying KLM standing as a home carrier may even be an unexpected consequence here.

I, for one, live in a pretty remote spoke; our airport has no chance of benefiting from improvements. Pretty much all my travel involves either connection at a hub (sometimes air-to-ground connection), and maybe more that one such connection. I can benefit from more competition in a nearby megahub, though.
Long story short - I can definitely see how such approach helps AMS population. I am undeniably loosing on that. So I wouldn't feel bad if there is a counterpush against KLM over all this.

How can such rule as suggested above in the thread result in more connection to smaller destinations
AIrlines obviously aren't going to give up frequent flight to major destination for unproven routes with limited yields.
I can only see the rule as inhibiting new routes from being created.
 
kalvado
Posts: 3397
Joined: Wed Mar 01, 2006 4:29 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 2:40 pm

c933103 wrote:
kalvado wrote:
vfw614 wrote:
Well, with slots being a finite resource in times where concreting over more and more landscape for additional airport infrastructure has become somewhat unpopular, I guess some clean-sheet approach to slot allocation has to be taken at some point should air traffic continue to grow. Should those airlines with the deepest pockets or the oldest grandfather rights have access or those deemed to offer services which best serve the "common interest", however and by whomever defined. It is an interesting challenge for the future.

I would see a reflection of hub-and-spoke vs point-to-point model here.
After all, what NL wants is more smaller spokes, whether spokes from AMS or EIN acting as a spoke for other large cities - with lesser quality of travel for existing major routes; hence reduced connecting opportunities for some, but possibly improved connection for new spokes.
Solidifying KLM standing as a home carrier may even be an unexpected consequence here.

I, for one, live in a pretty remote spoke; our airport has no chance of benefiting from improvements. Pretty much all my travel involves either connection at a hub (sometimes air-to-ground connection), and maybe more that one such connection. I can benefit from more competition in a nearby megahub, though.
Long story short - I can definitely see how such approach helps AMS population. I am undeniably loosing on that. So I wouldn't feel bad if there is a counterpush against KLM over all this.

How can such rule as suggested above in the thread result in more connection to smaller destinations
AIrlines obviously aren't going to give up frequent flight to major destination for unproven routes with limited yields.
I can only see the rule as inhibiting new routes from being created.

well, rule explicitly calls for adding new routes instead of ramping up existing ones beyond 2 flights a day.
We all know that the total number of flights is not going to increase. So whatever new slots coming up for the distribution - via unused provision, airline bankruptcy, periodic redistribution (if AMS does that) would be handed over to whoever wants to operate AMS - neck of the woods flight, aka KLM; not for yet another AMS-NYC frequency.
 
User avatar
eurotrader85
Posts: 297
Joined: Wed Oct 24, 2018 8:45 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 3:43 pm

factsonly wrote:
eurotrader85 wrote:

The free market. It's right this is challenged. The government/coordinator is not the entity that is best at deciding what destinations pax can fly to from a specific place.

The assertion by IATA is correct.


Eurotrader sums up the problem perfectly, but does so from a 'free market' point of view.
And....... that is precisely the 'old school' view which the Netherlands Government wishes to challenge with some new thinking.

The view of the Netherlands Government is that 'free market' thinking in air transport is 'old school' and that in future, a new more advanced society sets clear targets for the air transport sector.
This view questions whether air transport is; (A) national 'infrastructure' or (B) just another commercial industry.

A. If it is 'national infrastructure', than it receives state investments, for which a nation, in return, must determine its allocation of scarce resources.
B. If it is just another commercial industry, than state investments should be less forthcoming and airlines must finance there own infrastructure and can be wholly "for profit".

Regretfully the air transport industry has been neither A or B.
For the past decades, Government has invested heavily in infrastructure with a strong focus on the well-being of the airlines (IATA) and perhaps with less focus on its overall economy/society.
This is now changing.........

Now....with ever stricter environmental legislation and increasing need to cut undesirable 'cheap' flying, the NL Government believes time has come for society to express clear views on the contribution of its air infrastructure to society, and therefore time has come to focus on what is essential connectivity and what is less essential.

The view is that public investment in a capacity restricted and environmentally focussed airport, can only be maintained if society gets to say how this airport is used to the benefit of overall society.
The Government's position is, that this investment is not made for the airlines to get a complete free hand, to make as much money as THEY wish.
The NL Government believes that in a new more constrained air transport environment, society must determine where precious capacity and resources are best allocated to serve the overall economy.

So this IATA court case will be about:
1. The Government's freedom to allocate scarce resouces to serve a nation's overall needs.
2. The rights of commercial airlines (IATA) to make as much money as they desire, based on Government investments in airport infrastructure

Time will tell, if the aviation community is ready to move on to new views on its contribution to our overall society.


But the government is not the best allocator of the scarce resource, even if it did build the asset for public benefit, and by public benefit, that is to serve the destinations the public chooses, which is a mixture of price, desired location etc. The free market will allocate those destinations accordingly, for the benefit of the public, not the government deciding where people can fly to.

A lot of the places on that list the Dutch government has decided on behalf of its people were not workable even at the peak in 2019. As the world is today/was in 2019, there is no need for a daily service from AMS to the likes of KMG. Sure, someone in the Dutch government might think it is a jolly nice place on the map to link to, but it is not commercially viable. That is the reason KLM has a Skyteam partner in MU. It's more efficient to fly to say PVG and let MU do the operating from there. Same the other way for MU to most European destinations, better to let KLM or AF do the local leg. It may well be the case that frequency between AMS and LON is high, maybe more so than some government bureaucrat who doesn't understand the business would like, but it could well be that an extra frequency to LHR, than a singular one to HFE on KMG or wherever, is a much better allocation of resources for the infrastructure asset, and actually commercially viable.

The government is there to be a regulator, not a decider on where people can fly (unless in specific obvious cases of national security or public safety issues of course).

If it feels airlines are making too much money out of the asset, and not paying back the original investment cost, which is difficult to prove given the number of jobs created by such an asset, then simply raise the airport charges at a flat rate. It will actually help allocate the scarce slot resource to those who value it the most.

If the government is worried about the green lobby and the effect on the environment of flying then it can raise taxes according to flight distance in the same way (all be it utterly slapstick between long and short-haul, and cynics will arguably say nothing other than a tax grab) the UK government does with Air Passenger Duty. Again, if we want to talk about allocating a resource best to society, then the lower tax on the short-haul leg will push consumers to that route and give a better allocation to society. There is less Co2 being pumped in the air on a full flight between AMS and LHR then a near-empty one between AMS and YEA.

There is no ‘Undesirable cheap flying’. If the market shows that is what the public wants then it is desirable, not undesirable. Society does say where it wants to fly and by who, and no doubt KLM watch pax statistics closely if there is a change in consumer habits so they can alter their schedule accordingly.

So, when we are past the argument that the government knows best where to allocate flying rights, and that is already ultimately in the hands of the consumer/public, then the government's argument gets shown for what it is. A protectionist policy to protect KLM from the competition.

This should be shot down super quickly as it is merely a non-tariff barrier to trade and a lose-lose to the consumer, i.e. those who paid for the infrastructure asset in the first place.
 
davidjohnson6
Posts: 1675
Joined: Mon Jun 20, 2016 10:10 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 4:02 pm

KLM's business model is partly about linking airports which no other major western European carrier is touching, to a European hub. I have a feeling that KLM was one of the very first non-Chinese airlines to link western Europe to Chengdu a number of years ago..... by now Kunming is probably at a similiar stage of air travel demand as Chengdu was several years ago. An Amsterdam-Kunming flight would save about 3h of backtracking compared to an AMS-PVG flight
The Netherlands has a population much smaller than the UK, France, Germany, Italy or Spain... and Amsterdam has a smaller population than places like Paris. AMS will never be able to generate the huge volume of locally originating traffic that is seen in London or Paris - so that means a greater reliance on passengers using AMS as an interchange rather than final destination. If the Netherlands wants a high level of air connectivity (and potential trade flows) it needs to think and act a little differently to the likes of France, Germany and the UK.

I think the Dutch Govt encouraging flights between Amsterdam and Kunming shows more knowledge of KLM's business, the aviation business, and what's good for the Dutch economy long term than might perhaps initially be realised
 
User avatar
eurotrader85
Posts: 297
Joined: Wed Oct 24, 2018 8:45 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 4:15 pm

davidjohnson6 wrote:
KLM's business model is partly about linking airports which no other major western European carrier is touching, to a European hub. I have a feeling that KLM was one of the very first non-Chinese airlines to link western Europe to Chengdu a number of years ago..... by now Kunming is probably at a similiar stage of air travel demand as Chengdu was several years ago. An Amsterdam-Kunming flight would save about 3h of backtracking compared to an AMS-PVG flight
The Netherlands has a population much smaller than the UK, France, Germany, Italy or Spain... and Amsterdam has a smaller population than places like Paris. If the Netherlands wants a high level of air connectivity (and potential trade flows) it needs to think and act a little differently to the likes of France, Germany and the UK.

I think the Dutch Govt encouraging flights between Amsterdam and Kunming shows more knowledge of KLM's business, the aviation business, and what's good for the Dutch economy long term than might perhaps initially be realised


Then why is it not operating it already? In my example, I picked out KMG randomly from the list. There is no reason why KLM couldn't already operate that route and probably would have done if it made commercial sense above another routings with its slots. Maybe in time, Kunming will become a commercial destination, more so than SFO say, and they reduce frequency one way to add or create another. Who knows? Well, the public will, not the government. They will vote with their feet and the market will adapt to changing consumer choices. This is the same for any destination across the world.

If the government is trying to work what is best for KLMs business, against other airline companies within the block, then this is already a blatant violation of the single market.

If the Netherlands wants a high level of air connectivity, then it should expand its infrastructure accordingly. Incentivising freight to fly out of LEY instead of AMS would be a start.
 
kalvado
Posts: 3397
Joined: Wed Mar 01, 2006 4:29 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 4:18 pm

eurotrader85 wrote:
factsonly wrote:
eurotrader85 wrote:

The free market. It's right this is challenged. The government/coordinator is not the entity that is best at deciding what destinations pax can fly to from a specific place.

The assertion by IATA is correct.


Eurotrader sums up the problem perfectly, but does so from a 'free market' point of view.
And....... that is precisely the 'old school' view which the Netherlands Government wishes to challenge with some new thinking.

The view of the Netherlands Government is that 'free market' thinking in air transport is 'old school' and that in future, a new more advanced society sets clear targets for the air transport sector.
This view questions whether air transport is; (A) national 'infrastructure' or (B) just another commercial industry.

A. If it is 'national infrastructure', than it receives state investments, for which a nation, in return, must determine its allocation of scarce resources.
B. If it is just another commercial industry, than state investments should be less forthcoming and airlines must finance there own infrastructure and can be wholly "for profit".

Regretfully the air transport industry has been neither A or B.
For the past decades, Government has invested heavily in infrastructure with a strong focus on the well-being of the airlines (IATA) and perhaps with less focus on its overall economy/society.
This is now changing.........

Now....with ever stricter environmental legislation and increasing need to cut undesirable 'cheap' flying, the NL Government believes time has come for society to express clear views on the contribution of its air infrastructure to society, and therefore time has come to focus on what is essential connectivity and what is less essential.

The view is that public investment in a capacity restricted and environmentally focussed airport, can only be maintained if society gets to say how this airport is used to the benefit of overall society.
The Government's position is, that this investment is not made for the airlines to get a complete free hand, to make as much money as THEY wish.
The NL Government believes that in a new more constrained air transport environment, society must determine where precious capacity and resources are best allocated to serve the overall economy.

So this IATA court case will be about:
1. The Government's freedom to allocate scarce resouces to serve a nation's overall needs.
2. The rights of commercial airlines (IATA) to make as much money as they desire, based on Government investments in airport infrastructure

Time will tell, if the aviation community is ready to move on to new views on its contribution to our overall society.


But the government is not the best allocator of the scarce resource, even if it did build the asset for public benefit, and by public benefit, that is to serve the destinations the public chooses, which is a mixture of price, desired location etc. The free market will allocate those destinations accordingly, for the benefit of the public, not the government deciding where people can fly to.

A lot of the places on that list the Dutch government has decided on behalf of its people were not workable even at the peak in 2019. As the world is today/was in 2019, there is no need for a daily service from AMS to the likes of KMG. Sure, someone in the Dutch government might think it is a jolly nice place on the map to link to, but it is not commercially viable. That is the reason KLM has a Skyteam partner in MU. It's more efficient to fly to say PVG and let MU do the operating from there. Same the other way for MU to most European destinations, better to let KLM or AF do the local leg. It may well be the case that frequency between AMS and LON is high, maybe more so than some government bureaucrat who doesn't understand the business would like, but it could well be that an extra frequency to LHR, than a singular one to HFE on KMG or wherever, is a much better allocation of resources for the infrastructure asset, and actually commercially viable.

The government is there to be a regulator, not a decider on where people can fly (unless in specific obvious cases of national security or public safety issues of course).

If it feels airlines are making too much money out of the asset, and not paying back the original investment cost, which is difficult to prove given the number of jobs created by such an asset, then simply raise the airport charges at a flat rate. It will actually help allocate the scarce slot resource to those who value it the most.

If the government is worried about the green lobby and the effect on the environment of flying then it can raise taxes according to flight distance in the same way (all be it utterly slapstick between long and short-haul, and cynics will arguably say nothing other than a tax grab) the UK government does with Air Passenger Duty. Again, if we want to talk about allocating a resource best to society, then the lower tax on the short-haul leg will push consumers to that route and give a better allocation to society. There is less Co2 being pumped in the air on a full flight between AMS and LHR then a near-empty one between AMS and YEA.

There is no ‘Undesirable cheap flying’. If the market shows that is what the public wants then it is desirable, not undesirable. Society does say where it wants to fly and by who, and no doubt KLM watch pax statistics closely if there is a change in consumer habits so they can alter their schedule accordingly.

So, when we are past the argument that the government knows best where to allocate flying rights, and that is already ultimately in the hands of the consumer/public, then the government's argument gets shown for what it is. A protectionist policy to protect KLM from the competition.

This should be shot down super quickly as it is merely a non-tariff barrier to trade and a lose-lose to the consumer, i.e. those who paid for the infrastructure asset in the first place.

You're talking from a very free market perspective. That is not the only possible approach, though. Moreover, free market can easily distort things way out of optimum.
Role of the government, among other things, is to protect minorities which have limited say via headcount and total wealth.
This is, to some extent, the case here: instead of providing even more service to NYC or LON crowd, make sure small cities get some attention. I am not sure if that is actually doing much good to the world as hub-and-spoke model may be even better option. Cherry-picking some of that secondary market traffic via regulation may have effects on other markets, and I am not sure if that is net positive or - IMHO more likely - net negative.
 
trueblew
Posts: 315
Joined: Thu Nov 15, 2018 10:16 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 4:24 pm

kalvado wrote:
eurotrader85 wrote:
factsonly wrote:

Eurotrader sums up the problem perfectly, but does so from a 'free market' point of view.
And....... that is precisely the 'old school' view which the Netherlands Government wishes to challenge with some new thinking.

The view of the Netherlands Government is that 'free market' thinking in air transport is 'old school' and that in future, a new more advanced society sets clear targets for the air transport sector.
This view questions whether air transport is; (A) national 'infrastructure' or (B) just another commercial industry.

A. If it is 'national infrastructure', than it receives state investments, for which a nation, in return, must determine its allocation of scarce resources.
B. If it is just another commercial industry, than state investments should be less forthcoming and airlines must finance there own infrastructure and can be wholly "for profit".

Regretfully the air transport industry has been neither A or B.
For the past decades, Government has invested heavily in infrastructure with a strong focus on the well-being of the airlines (IATA) and perhaps with less focus on its overall economy/society.
This is now changing.........

Now....with ever stricter environmental legislation and increasing need to cut undesirable 'cheap' flying, the NL Government believes time has come for society to express clear views on the contribution of its air infrastructure to society, and therefore time has come to focus on what is essential connectivity and what is less essential.

The view is that public investment in a capacity restricted and environmentally focussed airport, can only be maintained if society gets to say how this airport is used to the benefit of overall society.
The Government's position is, that this investment is not made for the airlines to get a complete free hand, to make as much money as THEY wish.
The NL Government believes that in a new more constrained air transport environment, society must determine where precious capacity and resources are best allocated to serve the overall economy.

So this IATA court case will be about:
1. The Government's freedom to allocate scarce resouces to serve a nation's overall needs.
2. The rights of commercial airlines (IATA) to make as much money as they desire, based on Government investments in airport infrastructure

Time will tell, if the aviation community is ready to move on to new views on its contribution to our overall society.


But the government is not the best allocator of the scarce resource, even if it did build the asset for public benefit, and by public benefit, that is to serve the destinations the public chooses, which is a mixture of price, desired location etc. The free market will allocate those destinations accordingly, for the benefit of the public, not the government deciding where people can fly to.

A lot of the places on that list the Dutch government has decided on behalf of its people were not workable even at the peak in 2019. As the world is today/was in 2019, there is no need for a daily service from AMS to the likes of KMG. Sure, someone in the Dutch government might think it is a jolly nice place on the map to link to, but it is not commercially viable. That is the reason KLM has a Skyteam partner in MU. It's more efficient to fly to say PVG and let MU do the operating from there. Same the other way for MU to most European destinations, better to let KLM or AF do the local leg. It may well be the case that frequency between AMS and LON is high, maybe more so than some government bureaucrat who doesn't understand the business would like, but it could well be that an extra frequency to LHR, than a singular one to HFE on KMG or wherever, is a much better allocation of resources for the infrastructure asset, and actually commercially viable.

The government is there to be a regulator, not a decider on where people can fly (unless in specific obvious cases of national security or public safety issues of course).

If it feels airlines are making too much money out of the asset, and not paying back the original investment cost, which is difficult to prove given the number of jobs created by such an asset, then simply raise the airport charges at a flat rate. It will actually help allocate the scarce slot resource to those who value it the most.

If the government is worried about the green lobby and the effect on the environment of flying then it can raise taxes according to flight distance in the same way (all be it utterly slapstick between long and short-haul, and cynics will arguably say nothing other than a tax grab) the UK government does with Air Passenger Duty. Again, if we want to talk about allocating a resource best to society, then the lower tax on the short-haul leg will push consumers to that route and give a better allocation to society. There is less Co2 being pumped in the air on a full flight between AMS and LHR then a near-empty one between AMS and YEA.

There is no ‘Undesirable cheap flying’. If the market shows that is what the public wants then it is desirable, not undesirable. Society does say where it wants to fly and by who, and no doubt KLM watch pax statistics closely if there is a change in consumer habits so they can alter their schedule accordingly.

So, when we are past the argument that the government knows best where to allocate flying rights, and that is already ultimately in the hands of the consumer/public, then the government's argument gets shown for what it is. A protectionist policy to protect KLM from the competition.

This should be shot down super quickly as it is merely a non-tariff barrier to trade and a lose-lose to the consumer, i.e. those who paid for the infrastructure asset in the first place.

You're talking from a very free market perspective. That is not the only possible approach, though. Moreover, free market can easily distort things way out of optimum.
Role of the government, among other things, is to protect minorities which have limited say via headcount and total wealth.
This is, to some extent, the case here: instead of providing even more service to NYC or LON crowd, make sure small cities get some attention. I am not sure if that is actually doing much good to the world as hub-and-spoke model may be even better option. Cherry-picking some of that secondary market traffic via regulation may have effects on other markets, and I am not sure if that is net positive or - IMHO more likely - net negative.


Eurotrader is 100% correct. The "free market perspective" is the perspective that, in this case, a route that would do the most to benefit the most number of people would exist over one that has a very small benefit. The airline is best positioned to determine that because users/customers vote with their euros. The airline, having limited capital in the environment of slot controls and fleet costs, must deploy its capital in the most efficient way which ends up benefiting the most people. Anything else would serve to slow the growth of the airline and the economy overall (and thus the standard of living of every human) given the role air transportation plays.
 
kalvado
Posts: 3397
Joined: Wed Mar 01, 2006 4:29 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 4:37 pm

trueblew wrote:
kalvado wrote:
eurotrader85 wrote:

But the government is not the best allocator of the scarce resource, even if it did build the asset for public benefit, and by public benefit, that is to serve the destinations the public chooses, which is a mixture of price, desired location etc. The free market will allocate those destinations accordingly, for the benefit of the public, not the government deciding where people can fly to.

A lot of the places on that list the Dutch government has decided on behalf of its people were not workable even at the peak in 2019. As the world is today/was in 2019, there is no need for a daily service from AMS to the likes of KMG. Sure, someone in the Dutch government might think it is a jolly nice place on the map to link to, but it is not commercially viable. That is the reason KLM has a Skyteam partner in MU. It's more efficient to fly to say PVG and let MU do the operating from there. Same the other way for MU to most European destinations, better to let KLM or AF do the local leg. It may well be the case that frequency between AMS and LON is high, maybe more so than some government bureaucrat who doesn't understand the business would like, but it could well be that an extra frequency to LHR, than a singular one to HFE on KMG or wherever, is a much better allocation of resources for the infrastructure asset, and actually commercially viable.

The government is there to be a regulator, not a decider on where people can fly (unless in specific obvious cases of national security or public safety issues of course).

If it feels airlines are making too much money out of the asset, and not paying back the original investment cost, which is difficult to prove given the number of jobs created by such an asset, then simply raise the airport charges at a flat rate. It will actually help allocate the scarce slot resource to those who value it the most.

If the government is worried about the green lobby and the effect on the environment of flying then it can raise taxes according to flight distance in the same way (all be it utterly slapstick between long and short-haul, and cynics will arguably say nothing other than a tax grab) the UK government does with Air Passenger Duty. Again, if we want to talk about allocating a resource best to society, then the lower tax on the short-haul leg will push consumers to that route and give a better allocation to society. There is less Co2 being pumped in the air on a full flight between AMS and LHR then a near-empty one between AMS and YEA.

There is no ‘Undesirable cheap flying’. If the market shows that is what the public wants then it is desirable, not undesirable. Society does say where it wants to fly and by who, and no doubt KLM watch pax statistics closely if there is a change in consumer habits so they can alter their schedule accordingly.

So, when we are past the argument that the government knows best where to allocate flying rights, and that is already ultimately in the hands of the consumer/public, then the government's argument gets shown for what it is. A protectionist policy to protect KLM from the competition.

This should be shot down super quickly as it is merely a non-tariff barrier to trade and a lose-lose to the consumer, i.e. those who paid for the infrastructure asset in the first place.

You're talking from a very free market perspective. That is not the only possible approach, though. Moreover, free market can easily distort things way out of optimum.
Role of the government, among other things, is to protect minorities which have limited say via headcount and total wealth.
This is, to some extent, the case here: instead of providing even more service to NYC or LON crowd, make sure small cities get some attention. I am not sure if that is actually doing much good to the world as hub-and-spoke model may be even better option. Cherry-picking some of that secondary market traffic via regulation may have effects on other markets, and I am not sure if that is net positive or - IMHO more likely - net negative.


Eurotrader is 100% correct. The "free market perspective" is the perspective that, in this case, a route that would do the most to benefit the most number of people would exist over one that has a very small benefit. The airline is best positioned to determine that because users/customers vote with their euros. The airline, having limited capital in the environment of slot controls and fleet costs, must deploy its capital in the most efficient way which ends up benefiting the most people. Anything else would serve to slow the growth of the airline and the economy overall (and thus the standard of living of every human) given the role air transportation plays.

Free market perspective is the one which makes most money to the enterprise, not benefits general public most. Typical argument is that competitor would jump in to pick up leftovers - but as we're talking about limited resource - AMS slots - and KLM seem to use limitations to protect the turf.
Look at the history of railroads in US for comparison.
 
User avatar
eurotrader85
Posts: 297
Joined: Wed Oct 24, 2018 8:45 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 5:16 pm

kalvado wrote:
trueblew wrote:
kalvado wrote:
You're talking from a very free market perspective. That is not the only possible approach, though. Moreover, free market can easily distort things way out of optimum.
Role of the government, among other things, is to protect minorities which have limited say via headcount and total wealth.
This is, to some extent, the case here: instead of providing even more service to NYC or LON crowd, make sure small cities get some attention. I am not sure if that is actually doing much good to the world as hub-and-spoke model may be even better option. Cherry-picking some of that secondary market traffic via regulation may have effects on other markets, and I am not sure if that is net positive or - IMHO more likely - net negative.


Eurotrader is 100% correct. The "free market perspective" is the perspective that, in this case, a route that would do the most to benefit the most number of people would exist over one that has a very small benefit. The airline is best positioned to determine that because users/customers vote with their euros. The airline, having limited capital in the environment of slot controls and fleet costs, must deploy its capital in the most efficient way which ends up benefiting the most people. Anything else would serve to slow the growth of the airline and the economy overall (and thus the standard of living of every human) given the role air transportation plays.

Free market perspective is the one which makes most money to the enterprise, not benefits general public most. Typical argument is that competitor would jump in to pick up leftovers - but as we're talking about limited resource - AMS slots - and KLM seem to use limitations to protect the turf.
Look at the history of railroads in US for comparison.


There is no market failure being corrected by this planned policy amendment. Far from it. Flying to HFE or KMG or wherever is not a 'Public Service Obligation' for an airline in Amsterdam. Dutch taxpayers will probably have something to say if their taxes were wasted trying to make such routes viable by subsidising them because some government bureaucrat thinks it's a wonderful place on the map. Competitors and the EU will rightly see it as protectionism and unfair competition, and it is certainly not in the public interest, especially if pax and businesses desire more connections to NYC or HKG or wherever and by whoever. If the public wants to fly to HFE they can, no one is stopping them, and if and when it becomes viable an airline, in all likelihood KLM, may start a direct service. The public will benefit most when its infrastructure, in this case, AMS and its slots, are used to where the market desires the most, and by whom, even if that is not KLM, and not on some Dutch government desired destination list. The Dutch government knows subsidising uncommercial flights is simply not allowed to such places, so they are trying to protect KLM by limiting slot allocations to places only, viably, KLM would ever be able to serve potentially one day from AMS. That is anti-competitive and not in the wider public interest.

If you want to take a history lesson, look to the past in Europe, and the US, before the airline deregulation removed protectionism for airlines on routes. It meant higher fares, fewer jobs and less travelling public which was not a benefit for the general public who evidently prefer more choice and competition, and lower fares
 
kalvado
Posts: 3397
Joined: Wed Mar 01, 2006 4:29 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 5:35 pm

eurotrader85 wrote:
kalvado wrote:
trueblew wrote:

Eurotrader is 100% correct. The "free market perspective" is the perspective that, in this case, a route that would do the most to benefit the most number of people would exist over one that has a very small benefit. The airline is best positioned to determine that because users/customers vote with their euros. The airline, having limited capital in the environment of slot controls and fleet costs, must deploy its capital in the most efficient way which ends up benefiting the most people. Anything else would serve to slow the growth of the airline and the economy overall (and thus the standard of living of every human) given the role air transportation plays.

Free market perspective is the one which makes most money to the enterprise, not benefits general public most. Typical argument is that competitor would jump in to pick up leftovers - but as we're talking about limited resource - AMS slots - and KLM seem to use limitations to protect the turf.
Look at the history of railroads in US for comparison.


There is no market failure being corrected by this planned policy amendment. Far from it. Flying to HFE or KMG or wherever is not a 'Public Service Obligation' for an airline in Amsterdam. Dutch taxpayers will probably have something to say if their taxes were wasted trying to make such routes viable by subsidising them because some government bureaucrat thinks it's a wonderful place on the map. Competitors and the EU will rightly see it as protectionism and unfair competition, and it is certainly not in the public interest, especially if pax and businesses desire more connections to NYC or HKG or wherever and by whoever. If the public wants to fly to HFE they can, no one is stopping them, and if and when it becomes viable an airline, in all likelihood KLM, may start a direct service. The public will benefit most when its infrastructure, in this case, AMS and its slots, are used to where the market desires the most, and by whom, even if that is not KLM, and not on some Dutch government desired destination list. The Dutch government knows subsidising uncommercial flights is simply not allowed to such places, so they are trying to protect KLM by limiting slot allocations to places only, viably, KLM would ever be able to serve potentially one day from AMS. That is anti-competitive and not in the wider public interest.

If you want to take a history lesson, look to the past in Europe, and the US, before the airline deregulation removed protectionism for airlines on routes. It meant higher fares, fewer jobs and less travelling public which was not a benefit for the general public who evidently prefer more choice and competition, and lower fares

Well, I am not defending NL approach, if you look at my posts. What I am trying to do is to understand the underlying logic, and figure out what regulators think about it despite me not believing in their actions being right.
At the same time, I am certainly not the one who thinks free market is a cure-all solution, and I am not going to condemn the regulation just because it goes against free market dogma.
My impression is that regulation is primarily designed to please AMS public with more direct routes while helping KLM - at the expense of many outside of AMS getting a net loss. Which is certainly a valid way of short-term thinking for elected officials, who would then blame anyone but themselves for unforseen consequences and retaliation.
 
User avatar
eurotrader85
Posts: 297
Joined: Wed Oct 24, 2018 8:45 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 6:17 pm

kalvado wrote:
eurotrader85 wrote:
kalvado wrote:
Free market perspective is the one which makes most money to the enterprise, not benefits general public most. Typical argument is that competitor would jump in to pick up leftovers - but as we're talking about limited resource - AMS slots - and KLM seem to use limitations to protect the turf.
Look at the history of railroads in US for comparison.


There is no market failure being corrected by this planned policy amendment. Far from it. Flying to HFE or KMG or wherever is not a 'Public Service Obligation' for an airline in Amsterdam. Dutch taxpayers will probably have something to say if their taxes were wasted trying to make such routes viable by subsidising them because some government bureaucrat thinks it's a wonderful place on the map. Competitors and the EU will rightly see it as protectionism and unfair competition, and it is certainly not in the public interest, especially if pax and businesses desire more connections to NYC or HKG or wherever and by whoever. If the public wants to fly to HFE they can, no one is stopping them, and if and when it becomes viable an airline, in all likelihood KLM, may start a direct service. The public will benefit most when its infrastructure, in this case, AMS and its slots, are used to where the market desires the most, and by whom, even if that is not KLM, and not on some Dutch government desired destination list. The Dutch government knows subsidising uncommercial flights is simply not allowed to such places, so they are trying to protect KLM by limiting slot allocations to places only, viably, KLM would ever be able to serve potentially one day from AMS. That is anti-competitive and not in the wider public interest.

If you want to take a history lesson, look to the past in Europe, and the US, before the airline deregulation removed protectionism for airlines on routes. It meant higher fares, fewer jobs and less travelling public which was not a benefit for the general public who evidently prefer more choice and competition, and lower fares

Well, I am not defending NL approach, if you look at my posts. What I am trying to do is to understand the underlying logic, and figure out what regulators think about it despite me not believing in their actions being right.
At the same time, I am certainly not the one who thinks free market is a cure-all solution, and I am not going to condemn the regulation just because it goes against free market dogma.
My impression is that regulation is primarily designed to please AMS public with more direct routes while helping KLM - at the expense of many outside of AMS getting a net loss. Which is certainly a valid way of short-term thinking for elected officials, who would then blame anyone but themselves for unforseen consequences and retaliation.


Well, the Dutch state owns 9.3% of the AF-KLM group so that should give some guidance to whose interest it is trying to protect. If it can make KLM more profitable by restricting competition at KLM's key hub, it gains financially, as well as the usual BS short term political thinking from politicians and grubby lobbying handshakes. In the examples we have given above, it might be for example LH can just provide a route to HFE or somewhere more efficiently say from MUC than KLM ever can from AMS, and thus by increasing frequency on MUC-AMS they can provide a perceived better service at a better price to the Dutch public. Who knows? Maybe the local public doesn't want to fly LH, that's their choice, but LH should have every right to try as any airline. B6 may believe they can offer a better product to NYC than DL or KLM? Who knows, again they should have the right to try. The rules of the single market and slot allocation, as IATA are pointing out, are there to protect competition and consumers across the block, both home and away. Not for governments to block competitors to protect their interests, which in a hidden way is exactly what they are trying to do.

Don't get me wrong, i'm not a wild free market vigilante who thinks any government intervention anywhere is bad. There are times when the free market creates market failure, and this needs to be corrected (some examples such as polution were given above). But this is not one of them, far from it. The free market rules in place, the deregulation of the aviation industry that occurred, as well as the wider single market rules across the block, and open skies agreements, have served the public and businesses very well. IATA is right to take the action it is against the Dutch government, in the protection of the general public, both local and abroad.
 
737307
Topic Author
Posts: 2945
Joined: Tue Dec 26, 2017 6:27 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Wed Oct 20, 2021 7:56 pm

There is no free market, there cannot be "Open Skies" if airports in Europe, and The Netherlands in particular, allocate slots by nationalistic preferences.
 
User avatar
c933103
Posts: 5814
Joined: Wed May 18, 2016 7:23 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Thu Oct 21, 2021 6:50 am

kalvado wrote:
c933103 wrote:
kalvado wrote:
I would see a reflection of hub-and-spoke vs point-to-point model here.
After all, what NL wants is more smaller spokes, whether spokes from AMS or EIN acting as a spoke for other large cities - with lesser quality of travel for existing major routes; hence reduced connecting opportunities for some, but possibly improved connection for new spokes.
Solidifying KLM standing as a home carrier may even be an unexpected consequence here.

I, for one, live in a pretty remote spoke; our airport has no chance of benefiting from improvements. Pretty much all my travel involves either connection at a hub (sometimes air-to-ground connection), and maybe more that one such connection. I can benefit from more competition in a nearby megahub, though.
Long story short - I can definitely see how such approach helps AMS population. I am undeniably loosing on that. So I wouldn't feel bad if there is a counterpush against KLM over all this.

How can such rule as suggested above in the thread result in more connection to smaller destinations
AIrlines obviously aren't going to give up frequent flight to major destination for unproven routes with limited yields.
I can only see the rule as inhibiting new routes from being created.

well, rule explicitly calls for adding new routes instead of ramping up existing ones beyond 2 flights a day.
We all know that the total number of flights is not going to increase. So whatever new slots coming up for the distribution - via unused provision, airline bankruptcy, periodic redistribution (if AMS does that) would be handed over to whoever wants to operate AMS - neck of the woods flight, aka KLM; not for yet another AMS-NYC frequency.

As far as I know from reading the thread, this rule cover all airports in the nation, not just slot-controlled AMS?
 
factsonly
Posts: 3196
Joined: Mon Aug 06, 2012 3:08 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Thu Oct 21, 2021 8:08 am

c933103 wrote:
As far as I know from reading the thread, this rule cover all airports in the nation, not just slot-controlled AMS?


All Netherlands airports have civil (and even military) environmental capacity caps set, so they are all slot controlled.
 
kalvado
Posts: 3397
Joined: Wed Mar 01, 2006 4:29 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Thu Oct 21, 2021 1:45 pm

c933103 wrote:
kalvado wrote:
c933103 wrote:
How can such rule as suggested above in the thread result in more connection to smaller destinations
AIrlines obviously aren't going to give up frequent flight to major destination for unproven routes with limited yields.
I can only see the rule as inhibiting new routes from being created.

well, rule explicitly calls for adding new routes instead of ramping up existing ones beyond 2 flights a day.
We all know that the total number of flights is not going to increase. So whatever new slots coming up for the distribution - via unused provision, airline bankruptcy, periodic redistribution (if AMS does that) would be handed over to whoever wants to operate AMS - neck of the woods flight, aka KLM; not for yet another AMS-NYC frequency.

As far as I know from reading the thread, this rule cover all airports in the nation, not just slot-controlled AMS?

When I looked at EIN document, it was reading as a wish list for future service development, every mid-size airport likely have a similar one. It didnt look to me as a policing document.
They want to serve area companies with direct flights to their other locations, and that is not an unreasonable thing to say. Didn't feel like they want to restrict anything.
 
User avatar
c933103
Posts: 5814
Joined: Wed May 18, 2016 7:23 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Thu Oct 21, 2021 7:05 pm

kalvado wrote:
c933103 wrote:
kalvado wrote:
well, rule explicitly calls for adding new routes instead of ramping up existing ones beyond 2 flights a day.
We all know that the total number of flights is not going to increase. So whatever new slots coming up for the distribution - via unused provision, airline bankruptcy, periodic redistribution (if AMS does that) would be handed over to whoever wants to operate AMS - neck of the woods flight, aka KLM; not for yet another AMS-NYC frequency.

As far as I know from reading the thread, this rule cover all airports in the nation, not just slot-controlled AMS?

When I looked at EIN document, it was reading as a wish list for future service development, every mid-size airport likely have a similar one. It didnt look to me as a policing document.
They want to serve area companies with direct flights to their other locations, and that is not an unreasonable thing to say. Didn't feel like they want to restrict anything.

Wish is one thing, but are they using the policy to make airlines fulfill their wish? If so then how?
 
User avatar
usdcaguy
Posts: 1665
Joined: Mon Jan 26, 2004 12:41 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Fri Oct 22, 2021 2:42 pm

davidjohnson6 wrote:
KLM's business model is partly about linking airports which no other major western European carrier is touching, to a European hub. I have a feeling that KLM was one of the very first non-Chinese airlines to link western Europe to Chengdu a number of years ago..... by now Kunming is probably at a similiar stage of air travel demand as Chengdu was several years ago. An Amsterdam-Kunming flight would save about 3h of backtracking compared to an AMS-PVG flight
The Netherlands has a population much smaller than the UK, France, Germany, Italy or Spain... and Amsterdam has a smaller population than places like Paris. AMS will never be able to generate the huge volume of locally originating traffic that is seen in London or Paris - so that means a greater reliance on passengers using AMS as an interchange rather than final destination. If the Netherlands wants a high level of air connectivity (and potential trade flows) it needs to think and act a little differently to the likes of France, Germany and the UK.

I think the Dutch Govt encouraging flights between Amsterdam and Kunming shows more knowledge of KLM's business, the aviation business, and what's good for the Dutch economy long term than might perhaps initially be realised


We seem to be forgetting that airlines have entire departments devoted to studying where they should deploy their equipment. Every day, their analysts look into databases to determine where people are flying and which Os&Ds should be served with the aircraft they have, which are a very expensive, scarce resource. If adding another AMS-ATL instead of a new AMS-SJC is less risky, the airlines will do it with the aim of making more money. Thinking that the airlines don't know how to best utilize their own resources is like the government ordering you to shop at one store instead of another so that every vendor in the city makes money. You will likely end up paying more because there's no guarantee that the other store will offer what you want at the price you are used to paying. In other words, if KL is forced to add a market like AMS-SJC instead of another AMS-ATL, there will be a greater risk of losing money if demand is insufficient at the price they need to make the flight profitable. On the other hand, KL may be unable to expand as they wish, which would force passengers to pay more money due to a lack of capacity on certain routes. Another thing that the Schiphol analysis seems to forget is that not all markets have a lucrative passenger mix. AMS-MKE is a good example. Although MKE has significant economic activity, much of that activity is at most national and not global in scope, so there would likely be insufficient business cabin demand and at best mediocre economy cabin demand on the flight. So basically, if a carrier is not already in a market, there is likely a very good reason that has already been identified by a number of network planning departments at various carriers.
 
User avatar
c933103
Posts: 5814
Joined: Wed May 18, 2016 7:23 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Sat Oct 23, 2021 2:00 am

davidjohnson6 wrote:
KLM's business model is partly about linking airports which no other major western European carrier is touching, to a European hub. I have a feeling that KLM was one of the very first non-Chinese airlines to link western Europe to Chengdu a number of years ago..... by now Kunming is probably at a similiar stage of air travel demand as Chengdu was several years ago. An Amsterdam-Kunming flight would save about 3h of backtracking compared to an AMS-PVG flight
The Netherlands has a population much smaller than the UK, France, Germany, Italy or Spain... and Amsterdam has a smaller population than places like Paris. AMS will never be able to generate the huge volume of locally originating traffic that is seen in London or Paris - so that means a greater reliance on passengers using AMS as an interchange rather than final destination. If the Netherlands wants a high level of air connectivity (and potential trade flows) it needs to think and act a little differently to the likes of France, Germany and the UK.

I think the Dutch Govt encouraging flights between Amsterdam and Kunming shows more knowledge of KLM's business, the aviation business, and what's good for the Dutch economy long term than might perhaps initially be realised

Catchment area of Chengdu is all of China except coastal provinces or Manchuria/Inner Mongolia.
When Chengdu exists, catchment area of Kunming is only Yunnan/Guizhou/Guangxi.
It would be more likely for them to be interested in opening such route due to political consideration or subsidy being paid by Kunming airport authority.
 
marcelh
Posts: 1579
Joined: Wed Jun 19, 2013 12:43 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Sat Oct 23, 2021 6:36 am

Dieuwer wrote:
There is no free market, there cannot be "Open Skies" if airports in Europe, and The Netherlands in particular, allocate slots by nationalistic preferences.

That’s an opinion, not a fact. There are economical reasons but no nationalistic preferences.
 
User avatar
knope2001
Posts: 3110
Joined: Wed Jun 01, 2005 5:54 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Sat Oct 23, 2021 6:53 pm

usdcaguy wrote:
davidjohnson6 wrote:
Another thing that the Schiphol analysis seems to forget is that not all markets have a lucrative passenger mix. AMS-MKE is a good example. Although MKE has significant economic activity, much of that activity is at most national and not global in scope, so there would likely be insufficient business cabin demand and at best mediocre economy cabin demand on the flight. So basically, if a carrier is not already in a market, there is likely a very good reason that has already been identified by a number of network planning departments at various carriers.


For what it's worth, within the presentation they cite reliance on is the Global World Cities research network, a long-running and well-respected organization from the University of Loughborough in England. Their methodology has consistently put Milwaukee as a tier 3 global city (Gamma) over the years including their 2020 release. Their methodology weighs the global interrelation levels heavily into the equation as opposed to simpler raw stats like population or GDP commonly used. This is not perfectly corelated to international air travel demand but it does seem to get much closer to that goal than flat measures like metro growth people like to cite here. Where skepticism for MKE is perhaps better rooted is that Milwaukee's de facto international airport has traditionally been O'Hare. The drive from O'Hare to Milwaukee is not substantially different than the drive from JFK to metro NY corporate powerhouses White Plains/Greenwich/Stamford/Norwalk. O'Hare (2019) had regular nonstop service to more than 50 international cities excluding Canada and Mexico, so the prospect of any single international flight retaining enough of MKE's international demand versus dozens of daily intercontinental nonstops in every direction from O'Hare is an uphill battle.

Here's the full list from their latest release: https://www.lboro.ac.uk/gawc/world2020t.html
And also their home page -- there's a whole lot of stuff there to give you a broader idea of the kinds of things they study which goes into the classification: https://www.lboro.ac.uk/gawc/index.html

From the US perspective:

Tier I (Alpha)
New York, Los Angeles, Chicago, San Francisco, Boston

Tier II (Beta)
Washington, Dallas, Miami, Houston, Atlanta, Denver, Philadelphia, Seattle, Tampa, Minneapolis, San Diego, Detroit, Austin

Tier III (Gammas)
San Jose, Charlotte, St Louis, Phoenix, Orlando, Baltimore, Nashville, Cleveland, Kansas City, Milwaukee, Salt Lake City, Columbus, Sacramento

Tier IV (High Sufficiency)
Hartford, Raleigh, Indianapolis, San Antonio, Cincinnati

Tier V (Sufficient)
Pittsburgh, Portland, Las Vegas, Jacksonville, Richmond, Oklahoma City, Des Moines, Tulsa, Buffalo, Louisville, Rochester, Birmingham, New Orleans, Memphis, Omaha, Honolulu, Harrisburg
 
finnishway
Posts: 571
Joined: Sat Jul 14, 2012 5:17 pm

Re: IATA Takes Legal Action to End Dutch Slot Rule

Sun Oct 24, 2021 6:52 am

What is the situation with Lelystad airport? Wasn't it supposed to be reliever airport for AMS?
 
User avatar
PatrickZ80
Posts: 4740
Joined: Tue Jul 13, 2010 5:33 am

Re: IATA Takes Legal Action to End Dutch Slot Rule

Sun Oct 24, 2021 8:14 am

finnishway wrote:
What is the situation with Lelystad airport? Wasn't it supposed to be reliever airport for AMS?


It was, but there were some issues with the paperwork which resulted in it's opening being delayed. Also due to COVID-19, with the current (decreased) demand Amsterdam doesn't need a reliever airport. It remains to be seen if Lelystad will open at some point in the future, maybe they built it all for nothing.

Anyway, it's not open yet. The infrastructure is all there and once they get the green light they can open in very short time. But they don't have permission to do so.

Initially Lelystad also had a list of preferred destinations, mostly around the Mediterranean. After all it was supposed to take over holiday traffic from Amsterdam, Dutch people going on holiday don't need to depart from a hub airport. But with such preference lists now being debated, if Lelystad ever opens it could work out differently. Likely low-cost airlines such as Ryanair and Wizzair would find their way to Lelystad calling the place "Amsterdam Lelystad Airport". They wouldn't care much about Dutch people going on holiday, they're after people from all over Europe wanting to fly to Amsterdam for cheap. That way Lelystad might get very different destinations than what they were aiming at.

By the way, there's no reason why they shouldn't call it Amsterdam Lelystad. After all the distance from the airport to Amsterdam city center is similar to the distance from London Gatwick to London city center and there's no doubt Gatwick is a London airport. Lelystad has potential to become the Gatwick of Amsterdam.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos