Economic downturn to be expected in Q4 2017 with decreased number of slots for full freighter operators at Schiphol

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Economic downturn to be expected in Q4 2017 with decreased number of slots for full freighter operators at Schiphol

The approaching ceiling of 500,000 flight movements per year will have direct consequences for the number of full freighter flights at Schiphol from 1 November 2017.   Airlines such as Kalitta, AirbridgeCargo, Emirates Skycargo, Singapore Airlines Cargo and “various Chinese cargo carriers” will no longer be granted a significant portion of their current cargo slot quota by the Slot Coordinator at the Dutch airport as per 1 November.   This appeared in an article in Nieuwsblad Transport.

 

 

 

With the ceiling of 500,000 flight movements close, Schiphol will be more strictly enforcing the so-called IATA 80-20 rule.  This rule stipulates that airlines must operate 80% of their flights on time or lose their historic slot rights.  Up until now Schiphol has flexibly dealt with the rule in relation to cargo flights but this will change this autumn.   This was reported by a reputable cargo company source in the recent Nieuwsblad Transport article.   This subject has been concerning the cargo community for some time.  Now that it has become known that various cargo carriers have not received a considerable number of their cargo slots and the economic damage of this can be quantified, alarm bells are ringing and Schiphol cargo managers are fearing a “bloodbath” this autumn.

 

Cargo sector seriously affected
A reduction in the number of full freighters affects not only the foreign carriers and their local entities, but will also have serious financial consequences for ground handling companies involved with the storage and handling of airfreight.    The major handling agents who handle the affected cargo carriers will have to take into account considerably reduced freight directly impacting on employment.   Road transport carriers will also be hit by the measure as the freight volume for transit destinations decreases.

In the Nieuwsblad Transport article, a manager explained that the many interim stops in an inter-continental cargo network pave the way for delays to cargo flights.  However, there are also other crucial factors that play a role in the export process whereby cargo flights can incur delays.

 

Common operation
The timely availability of booked cargo is essential to be able to ensure assembly, transport and loading of an aircraft within the required time frame.  Regardless of specified latest cut-off times for delivery of freight, cargo regularly arrives late or is delivered at the very last moment.  This increases pressure on the assembly process for export flights at the handling agent and results in the risk of the flight closure being delayed.  Unlike a passenger aircraft where the passenger has paid for his ticket ahead of his flight, freight charges are paid after the actual carriage has taken place.  To allow a cargo aircraft to operate cost-effectively, it is essential that the aircraft be loaded optimally with all available freight.  The airline itself has little or no influence on the (timely) availability of cargo.

In addition, checks on outgoing export freight contribute to cargo aircraft delays.  For example, full freighters at Schiphol are randomly chosen for a full Customs scan.  This entails up to 40 fully built-up pallets of cargo having to be presented to Customs for checking.  This has an enormous impact on manpower and materiel availability further intensifying the pressure for a flight to be able to leave on time.  Should an assembled pallet have to be physically inspected then a delay becomes a fact.   Loading of a cargo aircraft takes place in accordance with a loadsheet carefully drawn up with regard to weight and balance for the positioning of cargo in the aircraft’s hold.  If a cargo pallet is unavailable then the aircraft’s weight distribution is no longer correct thus risking flight safety.

It can be said that delays for full freighters are inherent in the logistic process of which air carriers are part (normal deviation in operation).  The checks applicable to outgoing cargo flights in the Netherlands are also applicable in reverse for incoming flights.

 

Current regulations (Historic Rights (80/20 or ‘use it or lose it’) Rule)

Article 10.3 of EEC Regulation No. 95/93

A series of slots that has been allocated to an air carrier for the operation of a scheduled or a programmed non-scheduled air service shall not entitle that air carrier to the same series of slots in the next equivalent scheduling period if the air carrier cannot demonstrate to the satisfaction of the coordinator that they have been operated, as cleared by the coordinator, by that air carrier for at least 80% of the time during the scheduling period for which they have been allocated.

 

Intentional abuse or normal deviations in the operation
‘The main task in the slot monitoring activity is identifying possible problems relating to the use of slots (misuse) and trying to resolve them before the operation, if possible, or as soon as possible after the operation.  In this last case, it is very important to be able to discriminate between intentional abuse and normal deviations in the operation.

The most important misuses relating to authorized slots are:

  • Flights operated without an authorized slot
  • Flights with authorized slots which are not operated
  • Flights operated in different conditions to those authorized: time, type of aircraft, type of service, etc.
  • Series of flights cancelled later than the established deadline.

 

It is simplistic to regard a delay that has occurred as misuse without being clear on the reasons for the delay.  Was it intentional abuse or was it a normal deviation in operation?  That is, can the causes, as described under common operation, be seen as a normal deviation in operation.

 

Slot Coordinator’s Duty of Care
If a misuse is identified during the slot monitoring process then the carrier should be informed in good time.  The carrier then has the opportunity to take action to defend itself against a claim of misuse. Given the far-reaching consequences for a carrier, the right to defend itself against an identified misuse is both appropriate and necessary.   A breach of this right should not result in the possible withdrawal of slots.

 

Conclusion
In order to, legally, have good reason to withdraw historically accrued slots from a cargo carrier, careful interpretation of the slot monitoring process as developed in EEC Regulation 95/93 will be necessary.

The withdrawal of slots is disastrous for the cargo sector.  Passenger flights are unable to compensate given their limited cargo capacity.  The decrease in the number of slots for full freighter operators will therefore result in a disastrous economic downturn for the cargo sector.  With cargo transport a barometer of our ‘Netherlands distribution land’ economy this development does not bode well.

Interesting to read :
verdict of the Dutch court in regard to slots 22-05-2017, C/15/258295 / KG ZA 17-317

http://deeplink.rechtspraak.nl/uitspraak?id=ECLI:NL:RBNHO:2017:4185

The capaciteitsdeclaration ( based on the Aaldersakkoord) was not made by the authorized consultive body (OSO) but by Schiphol independently and therefore legally invalid. In addtional the standards and numbers as mentioned in the Aaldersakkoord are not yet governed by law.


Slot monitoring:
All procedures relating to slot monitoring are subject to the relevant legislation – EEC Regulation No. 95/93 as amended – and to the industry recommended practices (IATA Worldwide Slot Guidelines and EUACA Recommended Practices) and are governed by the basic principles of neutrality, transparency and non-discrimination.
– DUTCH     :  http://eur-lex.europa.eu/legal-content/NL/TXT/?uri=CELEX%3A31993R0095
– ENGLISH :  http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A31993R0095

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