Ben Smith, chief executive of Air France-KLM, told the Airlines for Europe conference in Brussels that decisions in the Netherlands create a misunderstanding of their impact on aviation activity. He confirmed that multiple bodies make separate choices that result in a negative overall effect for the market. Amsterdam Schiphol Airport requires airlines to cover all its losses from the COVID period, which means carriers recapitalised the airport. Airlines now face some of the highest fee increases seen in Europe with a 26 per cent rise at Schiphol where profits flow back to the government as dividends.
Smith confirmed that Schiphol cannot decide on slot availability which creates uncertainty for based airlines. He revealed that Air France-KLM lacks the profits from KLM to justify capital expenditure under these conditions. The group stands ready to move aircraft and traffic to other bases such as Copenhagen or elsewhere if circumstances force the decision. He described this as normal business mathematics in a situation where the airline does not grow while competitors including Gulf carriers expand.
Smith confirmed that Europe faces a wake-up call about our reliance on Gulf hubs for eastbound connectivity. He revealed that 100 wide-body aircraft departing Europe depend on Gulf connections to reach many destinations in Asia and Southeast Asia. Current events block Gulf routes and expose the unlevel playing field created by ETS and other measures that add burdens to European carriers. He stated that Europe cannot reach many Asian destinations without Gulf carriers and that the situation offers a chance to make progress.
Smith confirmed a different mood in Europe driven by the realisation that the continent risks irrelevance without changes to energy security consolidation environment and competition strategies. He revealed that Europe must focus on internal efficiency rather than trying to match others. He criticised taxes such as APD and ETS that do not support environmental production and reduce competitiveness by preventing additional flights to destinations. He argued that airlines have increased efficiency for decades yet face ongoing costs that limit growth.
Smith confirmed agreement with Michael O’Leary on air traffic control and passenger rights issues. He revealed that 90 per cent of delays stem from ATC problems and that fixing ATC would reduce the need for EU261 compensation debates. He opposed proposals for a mandatory second cabin bag because aircraft lack space for large bags on half the seats delays departures and forces baggage belt waits for many passengers. He described the idea as the opposite of consumer choice since 40 per cent of customers fly on headline fares without a second bag.”Amsterdam, as far as I know, is the only major airport in Europe that is requiring airlines to pay for all their losses during COVID. We’re gonna be forced to do anywhere? We don’t have the profits out of KLM, we can’t justify the expense, and we’ll move them to other, new air planes or even existing airplanes to other two other bases. I don’t think we’d be talking about EU 261 if they fixed air traffic control.”
