US Retaliates Against Netherlands’ ‘Unjustifiable’ Flight Cap Measures

KLM airline airplanes are parked as Schiphol Airport reduces its flights due to the COVID-19 outbreak, in Amsterdam on April 2, 2020. Piroschka van de Wouw/Reuters

The U.S. Department of Transportation (DOT) approved complaints against proposed flight cap measures by the Netherlands that would reduce slots at the Amsterdam Airport Schiphol (AMS) available to U.S.-based airline companies.

On Nov. 3, the DOT approved complaints from industry group Airlines for America (A4A) and JetBlue airlines, both of which argued that the Netherlands’ plan to reduce flights to AMS harms U.S. carriers and violates several agreements. Beginning next year, the Dutch government intends to implement noise reduction measures at AMS, which includes reducing slots available to international airlines.

A4A notes that the measures will “adversely impact” American carriers, leading to “permanent confiscation” of historic slot rights held by U.S. carriers at AMS. It would also prevent new U.S. carriers from entering the Amsterdam market.

“Phase 1 capacity reduction measures being undertaken at AMS constitute unjustifiable and unreasonable activities under IATFCPA (International Air Transportation Fair Competitive Practices Act) and are in violation of the U.S.–EU Air Transport Agreement,” the DOT said. This is due to the Netherlands failing “to follow the Balanced Approach.”

The International Civil Aviation Organization’s “Balanced Approach to Aircraft Noise Management” requires that “all available options be evaluated to identify the most cost-effective measure or combination of measures to mitigate a specific noise problem.”

In its grievance registration, JetBlue pointed out that the U.S.–EU Air Transport Agreement mandates adherence to the “Balanced Approach” principle, which requires that noise-based operating restrictions “should be imposed as a last resort,” the DOT order said.

The DOT urged the Dutch government to suspend the implementation of phase 1 of the noise reduction plan in August. It also warned that implementing phase 1 without following the “Balanced Approach” would violate the U.S.–EU Air Transport Agreement.

However, the Dutch government “has yet to put forward any persuasive argument to support the theory that its intention to implement the Experimental Regulation is in conformity with the U.S.–EU Agreement,” the DOT said in its order.

“Moreover, we have not seen any indication that the Government of the Netherlands will suspend or delay its efforts to implement the plan.”

In contrast, the Dutch government issued a publication on Sept. 28 that indicated that flight slot capacity at AMS for the summer 2024 traffic season will be reduced. The DOT raised concerns about the second phase of the plan, which would further reduce annual flight slots to Amsterdam to 452,500 from the current 500,000.

“We are deeply troubled by the notion that new entrants will be completely foreclosed from slot access at AMS,” it said. “Indeed, we find particularly alarming that JetBlue, a relatively new entrant at AMS, has been notified that it will receive no slots for the summer 2024 season.”

Given all these facts, “we find that the implementation of the Government of the Netherlands’ Phase 1 noise reduction plan at AMS constitutes an unjustifiable and unreasonable discriminatory and anticompetitive practice, and we further find that the Government of the Netherlands has imposed an unjustifiable and unreasonable restriction on the access of an air carrier to the U.S.–Amsterdam market,” the DOT stated.

JetBlue’s Imminent Threat

While JetBlue joined in the A4A complaint, the company filed a separate complaint since the airline is facing a threat of “expulsion from Amsterdam Airport Schiphol at the end of the Winter 2023/2024 scheduling season.”

JetBlue is a recent entrant into the AMS market, having begun offering flight services to the airport only in August.

“JetBlue asserts that absent urgent and decisive intervention by the Department, JetBlue will not be able to continue to serve AMS on a year-round basis after March 30, 2024,” the DOT order stated.

“The AMS slot coordinator confirmed to JetBlue that if Phase 1 is implemented as planned, ‘there is a near mathematical certainty that no slots will be available for JetBlue’s service during the Summer 2024 scheduling season.’”

The airline argued that noise reduction measures block future access to AMS by a new U.S. carrier that isn’t a member of an “immunized joint venture.”

It asked the DOT to take “meaningful, proportionate countermeasures” to bring the Dutch government in compliance with the U.S.–EU Air Transport Agreement, including mandating a “reduction in Dutch carriers’ scheduled services to the United States.”

DOT Countermeasures

Following the Netherlands government’s stance, the DOT asked three Dutch carriers—KLM, Martinair, and TUI Airlines Nederlands—to file schedules of their services to and from the United States.

“We will defer for now a decision on further countermeasures, including those proposed by JetBlue,” it said. KLM is partially owned by the Dutch government.

The DOT pointed out that it will engage with the Netherlands government and the European Commission on the matter on Nov. 13.  The department expressed hope that a resolution could occur without needing to pursue “further regulatory action.”

However, if the talks fail to produce any meaningful results, the DOT “stands ready to consider any further action that may be appropriate.”

In its response to the issue submitted to the DOT last month, KLM said that it derives “no benefit” from noise regulations at AMS airport and, in fact, “will be seriously injured if they become effective.”

The company claimed that it has “led and continues to lead” a campaign against the proposed flight slot reductions.

“Due to the actions of the Dutch Government, KLM will be impacted gravely. KLM will not only have its flights reduced at AMS, but now faces the possibility of U.S. retaliation. Undoubtedly, other jurisdictions could follow.”

KLM asserted that it’s “aligned” with A4A and JetBlue’s conclusions that the Dutch government’s proposed noise reduction measures are “unlawful.”