FLUG REVUE August 2002: Amsterdam airport seeks expansion

AMSTERDAM SCHIPHOL AIRPORT EXPANDS

By Christiane Rodenbücher

It is apparently a never-ending story: there is still no definite date set for Amsterdam Schiphol airport's long-awaited privatisation. In 1997, the Dutch government decided to privatise the airport by Haarlemmer Lake and in 2000 it approved the sale of its shares, but since then nothing has happened.

In the spring of 2002 the Social Democrat-Liberal government once again put on ice long-standing plans for a stock-market flotation, and it remains to be seen what policy the newly formed coalition of Christian Democrats and right-wing Liberals will adopt. The privatisation fiasco of the Dutch railways is still fresh in the minds of the population.

Amsterdam Schiphol airport tarmac

But as far as Gerlach Cerfontaine, president and CEO of the Schiphol Group which operates Amsterdam airport and the regional airports of Rotterdam and Lelystad, is concerned, strategic plans for the future development of his airport city concept depend on the airport being in private hands. Euro18 million has already been spent on preparing for the stock market flotation of the airport, which is expected to be valued at around Euro 2.3 billion. Cerfontaine is convinced that a private airport operator would be much better positioned internationally. "There are several competitive advantages, even if not all the larger airports are in private hands,” says the Schiphol Group CEO, who had hoped to gain sufficient financial resources from a stock-market flotation to realise his plans.

Private entities, Cerfontaine believes, always have more negotiating clout than state-owned organisations. When Amsterdam airport attempted to take a financial stake in some Italian airports, Schiphol was only offered two percent. "If we had been privatised, it would have been 49% or even more.” In fact, however, Cerfontaine is actually quite happy in this case that the deal fell through, as the airport operator Aeroporti di Roma has since lost a significant amount of business to Milan's Malpensa airport.

The first alliance between two international airports, Pantares, a joint venture between the Schiphol Group and Frankfurter Fraport AG which offers terminal management, ground handling, cargo handling, retail, information and telecommunications technology services to airports throughout the world and has a 37.5% share in the construction of the new Tradeport logistics centre in Hong Kong, was founded in the expectation that Schiphol would soon be privatised. Privatised European airports such as Frankfurt am Main, Vienna and Zurich, will no doubt want to reconsider their plans to invest in other airports, including Schiphol.

A setback for Cerfontaine, who would have liked to apply his airport city model for Amsterdam to other airports as well. Under his vision, the airport is to be transformed into a city which, as well as being a central hub, offers an all-embracing service with a combination of air, road and rail transport modes. That means shopping and eating out all around the clock, seven days a week, 365 days a year, along with a hospital, a casino, children's playgrounds, conference rooms and much more besides. This airport city vision received a boost when IATA rated the shopping centre at Amsterdam Schiphol as the best in Europe.

With almost 40 million passengers a year, Amsterdam airport is the most important hub in the Netherlands. This is due to its favourable geographic position, close to several ports. Both the large German market and also the British market are just around the corner. Because of its well-developed infrastructure, "AMS” is an attractive location for many global enterprises.

But the airport has always been an explosive political issue. A number of expansion scenarios have been acted out in recent years, aimed at pushing forward development of the airport. These have ranged from plans to build a second airport to relieve Amsterdam or for a completely new redevelopment out in the North Sea.

Schiphol is currently building its longest runway, 3,800m long, on the existing site. This fifth runway in Amsterdam is expected to enter service in November. At the same time the airport management is pushing ahead with plans for two other runways, one running north-south and another east-west. Because of frequent, strong winds from the west and south-west, Cerfontaine would like to concentrate on expanding its east-west capacity. The aim here is to substantially improve punctuality from the present 75% for landings and 64% for take-offs.

Weather conditions are often bad in Amsterdam, explains ramp controller Rund Jollife. For this reason, the airport has been using a sophisticated runway system consisting of runway in all directions of the wind for some years. Winds and fog caused frequent bottlenecks and delays last year. "On about 40 days of the year the aircraft cannot take off on time and landings are held up as well, so that long stacks can develop. On about ten days a year when weather conditions are bad, flights are diverted to Maastricht, Rotterdam or Düsseldorf if kerosene is running out or a plane is not equipped for landing in bad weather.”

Amsterdam airport, 15km to the east of the North Sea coast and 15km to the west of Amsterdam, is located in a heavily populated area. It is inevitable therefore that the man in charge of the airport should have close contact with the population and be keen to implement effective noise reduction measures. Chapter 2 aircraft no longer use the airport, while relatively noisy Chapter 3 planes have to pay higher landing charges.

Approaches over the North Sea will be more frequent in the future than has been the case up to now, and steeper approaches at higher approach speed are also planned. As soon as the two new runways enter service, use of two of the other runways will either cease or be cut back sharply. The fifth runway, right to the west of the airport grounds will relieve the west-east runway of over 20,000 landings and over 30,000 take-offs from 2005, while on the short east runway (actually already acting as a fifth, but little used runway) only 1,000 movements will be handled per year instead of over 5,600 at present. "Normally, new runways always bring a lot of problems with them,” says Cerfontaine, "so we want to demonstrate that they will reduce noise emissions significantly.”

Once the fifth runway is opened and the western wing of the terminal is expanded, giving a new total of 112 gates, he calculates that the airport will have the capacity to deal with 60 million passengers a year from 2005. At present ground handling facilities can only cope with 45 million passengers. Passenger volume for this year will be slightly down on the 39.5 million handled in 2001 (0.2% less than in 2000). 40% of these are transfer passengers. That passenger numbers have fallen by a smaller percentage than in London and Frankfurt airports, Amsterdam's two direct rivals, is due to the fact that Schiphol is less dependent on transatlantic flights and on flights to the Middle East than those airports. The crisis in domestic flights did not affect Amsterdam very much in 2001, as the airport is easy to reach by land and therefore has only relatively few domestic flights. According to Cerfontaine, Amsterdam actually benefited from the financial problems of Swissair and Sabena.

Another reason for the relatively low loss of passengers in 2001 in the view of the Schiphol Group is the presence of low-cost carriers like easyJet, Ryanair and Basiq at Amsterdam airport. The airport company would like to expand business in this sector in the future as well. Another significant factor, Cerfontaine believes, is the good performance of home carrier KLM. "KLM responded quickly and trimmed back the number of flights on offer.”

Amsterdam Schiphol is expecting 43 million passengers in 2003. €2.6 billion of investment is planned over the next five years. Cerfontaine's growth policy depends above all on a customer-oriented service that attracts other airlines and on KLM forging additional alliances. For example, KLM is thinking of adding British Airways as a partner as well as Northwest. With over two million Heathrow passengers, the English market is the most important. The Schiphol CEO sees opportunities for partnerships between airlines and airports in codeshares and in the newly installed iris identification system.

This new control system offers extremely reliable biometric identification and guarantees maximum security on boarding. Passengers are registered and their iris data is stored on a chip. Anyone who invests in one of these smart cards saves time on checking in and can also enjoy parking concessions. 2,500 people have already bought the card, which at present costs between Euro 79 and Euro 99 per year, depending on various preferential rates. Amsterdam airport was the first airport to introduce the system in 2001 for passengers and employees. In 2001, Euro 24.5 million was spent on security measures at Amsterdam airport, and this year a further Euro 55 million is to be invested. The airport believes that these measures make it one of the securest airports in the whole of Europe.

This year's summer schedule offers 205 flights, six fewer than in 2001. Although Sabena, Canada 3000, Air Zena Georgian and Uzbekistan Airways stopped flying to Amsterdam last year, Air Canada, Ethiopian Airlines and Trans Travel Airlines are now flying there for the first time. There are currently 27 connections to the USA on the flight schedule, two less than last year. Austrian Airlines has introduced a new service to Vienna. The frequencies of flights to European cities like Athens, Barcelona, Budapest, Bordeaux, Hamburg and Madrid have all increased this year, compared with 2001.

In the meantime, heavy investment in air cargo has paid off. Despite a decline of 3.2% compared with 2000, Amsterdam airport maintained its position as one of the front runners in 2001. Some 1.2 million tonnes were handled last year. As Amsterdam is also less dependent on the USA in the cargo area, it sustained a smaller loss of business than other major airports such as London (9%), Paris (4%) and Brussels (10.1%). The airport management is not expecting the volume of cargo handled to start growing again until 2003. The main reason for the relatively low loss of business in 2001 was Amsterdam's favourable geographic situation. Malaysia Airlines has withdrawn from Frankfurt-Hahn, in favour of Schiphol. Ethiopian Airlines has also returned, while Dragon Air, Singapore Airlines and China Airlines have expanded their operations in Amsterdam. "AMS” was in a stronger position than London, Paris, Frankfurt and Brussels as regards air cargo services to the Far East, and actually experienced 5% growth in the Asian/Pacific sector. Amsterdam airport continues to view Asia, Africa, the Middle East and North America as its most important markets.

Over the next few years a number of infrastructural improvements are planned, including extra roads, logistics centres and business parks, and on top of these an underground connection for time-critical goods is being considered. Amsterdam Schiphol has big plans for the future. All that the airport is waiting for now is privatisation.

From page 80 of FLUG REVUE 8/2002

Last updated 11 July 2002

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