Airneth Column
June 2010
By Dr. Eric Pels

On September 30 2003 the alliance (merger, or takeover) between Air France and KLM was finalized. A holding company, Air France-KLM, was created, with airlines Air France and KLM continuing as separate brand names. The holding has its seat in Paris, but KLM operates under Dutch law, because of the traffic rights. Worries that KLM would disappear, and/or Amsterdam Airport Schiphol would loose its position as the hub of KLM’s network and become a regional airport led to agreements which guaranteed KLM’s and Schiphol’s positions for a number of years. These agreements gave certainty about the existence of KLM, and the hub at Schiphol, at least until 2011/2012 (depending on the agreement).

Airneth Column
April 2010
By Dr. Marc Dierikx 

What is it with commercial airplanes that makes people stand back in awe? Is it their size? The impression of power? The lure of speed? The attraction of distant horizons? The uncertainty of risking the elements?

From the very start aviation has enjoyed all of these attractions – and then some. Yet the actual production of aircraft has never quite shared the sentiments embodied in the finished product. There were exceptions, of course, especially in the early decades of flight, such as the aircraft workshops of Glenn Curtiss in the U.S., Handley Page in Britain, or Latécoère in France. All of these names have in common that they are no longer around. In Airneth home country Holland ‘we’ also had such a romantic name in the business: Fokker. Until 1996 that is. Now, in 2010 and fourteen years after Fokker’s sad ending in bankruptcy, ‘plans are in the making’ to resurrect aircraft production and build a new version of the Fokker-100 airliner. In March the Dutch media reported that a group of businessmen was to receive from the Ministry of Economic Affairs a credit of 20 million euros (out of an envisaged total of 600 million) to develop plans for Next Generation Aircraft to produce the new jet. Have the Dutch fallen victim to the romance of the airplane business – again?

The regulation of Amsterdam Airport Schiphol’s charges was first formulated nearly a decade ago and since then a great deal has happened to change the face of European aviation. Consequently, it is understandable that the Dutch competition authority, NMa, should have decided to instigate a review of Schiphol’s market power and it has done so by commissioning an academic consortium under the nomenclature German Airport Performance (GAP) to undertake a study, the report of which was released in January. The report is a long one, 185 pages (with annexes) and it is difficult to do justice to its analysis and conclusions in this short appraisal. It is a well-written report set within the traditional framework of an investigation in the context of competition law. Competition law often provides a difficult framework for economists to exercise their skills because of its pro-forma approach and this report belies these difficulties. As a consequence, its analysis and conclusions, unfortunately, beg a number of important questions.