Uncertain outlook

posted on 27th May 2020
Uncertain outlook

Covid-19 has had a massive effect on Amsterdam Airport Schiphol – in ATMs and traffic. And although it is handling around 55% more full freighter flights than last year, this does not compensate for the loss of belly freight, emphasises Bart Pouwels, head of cargo

Covid-19 has had a massive effect on the operations of our airport in terms of air traffic movements (ATM), and traffic.

Since the pandemic started in mid-March, daily ATMs into Schiphol have declined 89% and the daily total number of passengers have fallen by 97% compared to last year. This has led to a decimation in belly cargo capacity, which usually accounts for half of cargo volumes and the need for more cargo-only flights to fill the capacity shortage.

Freighter aircraft and combinations of passenger aircraft with freight in the hold have increased and the average number per week has increased from 260 before the crisis to 360 flights a week. There has also been an increase in the number of freight charters, while passenger planes loaded with cargo are also being operated, and represent about 10% of the extra flights being flown.

We have an upsurge in freighter flights; both full freighters and passenger aircraft that the airlines now use to carry cargo. The numbers show approximately 55% more full freight ATMs than this same period last year. However, the increase in full freighter flights does not compensate for the volume loss of the belly freight that is transported in passenger flights.

In April, there was an increase in the number of full cargo flights, which mainly took place towards North America and Asia. The number of additional full freight movements to North America amounted to more than 275 flights. More than 250 additional flights to Asia took place.

Nevertheless, the total volume of cargo transported declined by 26%, as it does not fully offset the freight normally carried in passenger aircraft holds.

Schiphol’s main focus is making sure the current skeleton network is maintained and freight demand accommodated, especially medical supplies. We have introduced various social distancing measures – such as a 1.5m safety distance, which is now being rolled out at the cargo handlers’ warehouses.

Cargo volumes have dropped and exports have lagged

In April, the number of air traffic movements (ATMs) to and from Schiphol fell by 90% to a total of 4,242. The number of cargo flights during the month rose by 713 (+63%) compared to the same month last year, to reach a total of 1,837. April volumes reached 93,255 tonnes, a 26% decline on the 126,743 tonnes in the same month last year. Between January and April, volumes totalled 443,109 tonnes, a decline of 13.1% on the same period in 2019 (509,955 tonnes).

The Covid-19 pandemic has led to a shift in cargo flows at Schiphol and some usually high-volume verticals have decreased such as the import and export of flowers. There has been an increase in the movement of medical goods and aircraft have been arriving loaded with bandages, mouth masks, glasses and gloves to help with the Netherlands and Europe’s fight against the virus. Normally these are not time-critical goods and are transported by sea freight, but shipments are being diverted to air freight as faster delivery is they are needed to meet strong and quick demand.

The general trend at Schiphol during the Covid-19 outbreak is that there is a lot of imports, but exports are lagging behind. Schiphol is seeing different cargo trends during the Covid-19 outbreak and is processing large amounts of imports from China and the US, which is proving costly for operators as there is an imbalance.

Significant cooperation between stakeholders
Schiphol works very closely together with handlers, Dutch Customs and the rest of its cargo community. Our strong cargo community has enabled the cargo to move freely. We are in constant dialogue with the community about new flight schedules and changes. We are in contact with our partners on a daily basis. We are constantly transmitting new information about schedules from airlines and from handlers on our website

Supply chain cooperation is – especially now – very important as flight schedules can change on a daily basis. It is very important that goods keep moving, especially now a lot of medical shipments are transported by air. Dutch Customs is clearing these goods even more quickly. Moreover, Dutch Customs set up an extensive back office to handle all Covid-19 related questions and its process teams are working around the clock to accommodate all shipments.

What challenges have been presented by the introduction of cargo-only passenger aircraft services?
Passenger aircraft with only cargo on board, which are operated by KLM or other airlines at Schiphol, are handled no differently than normal.

What new opportunities have arisen, if any?
We do not tend to talk about anything during the Covid-19 pandemic ‘as an opportunity’. There has been an increase in freighters to meet demand needed for quick and fast movement of medical supplies and perishables. We are pleased to play a role in ensuring the cargo that is needed in the Netherlands and EU keeps moving.

Have most or all strategic initiatives had to go on hold?
No, our approach with our strategic programmes such as the Smart Cargo Mainport Programme (SCMP), Holland Flower Alliance and our sustainability programme will continue, but with revised attention and capacity. These are still long-term programmes, which continue to need our attention.

What preparations do you have in place for volumes returning to more normal levels as restrictions are eased?
At this time, we are working towards a continued safe and 1.5m social distancing environment. Once the road to normal or recovery is set in motion, we are in close dialogue with our strong cargo community in order to make this happen as smoothly as possible, within all good health guidelines, when and where it is needed.

Do you have any other comments or observations about the current challenging environment?
At first, we were busy trying to predict the impact of the corona crisis. Now we know the depth of the impact and have focused on developing scenarios for what recovery might look like. Due to the uncertainties we have developed several scenarios around when corona will be under control and what the economic implications might be.

Obviously, we have also looked to other implications – such as changed passenger requirements including providing a safe, healthy and germ-free journey and changed travel needs. But we also have looked at driving our innovation portfolio by accelerating some (maintenance) projects, including providing a more seamless (and touch-free) journey for our passengers and freight.

Safety and health of all Schiphol employees and travellers has been Schiphol’s number one priority since the outbreak of Covid-19. The virus has a big impact on our airport and the way we operate. Schiphol has remained open and continues to do so, limiting operations to two piers from which passengers can disembark aircraft.

Due to the uncertainty surrounding the approach to the coronavirus, the outlook is uncertain and we are trying to estimate how long this dip will last, and try to discover the first glimpses of hope on the horizon. We are in close contact with our airline customers, and Schiphol will therefore take various scenarios into account in the near future. It is still difficult to predict which scenario will become. But we are always ready to scale up wisely and sensibly, whenever that moment is.