Antwerp Airport wants to be an alternative to Dutch airports as the imposition of another airport tax there is considered

Belgium’s Antwerp International Airport has declared that it wants to be an “attractive alternative” to Dutch airports in light of the Dutch Government’s proposal to reintroduce aviation taxes.

The cabinet of the convoluted four-party Dutch coalition government that has existed only since 09-Oct-2017 following the Mar-2017 General Election is reported to be considering an aviation tax, with a view to generating EUR200 million per annum from the air transport sector.  The driving force is likely to be the left wing, ‘progressive’ Democrats 66 party, which came fourth in the election but which is part of the coalition.

It is not the first time a Dutch government has introduced such a tax. A previous, environmentally-minded one did so on 01-Jul-2008 as a way to temper what it saw as the unrestrained growth of the aviation sector and to generate an additional source of income amounting to EUR350 million annually.

With an original standard charge of EUR25 per ticket (which was quickly watered down), the tax lasted exactly one year before it was withdrawn. Once it started to affect tourism and passenger numbers plummeted its days were numbered. Some lessons are never learned.

Both KLM and Schiphol Airport were active campaigners against the 2008 tax and they are equally so over this one. They were quick to point out that Belgium, the country most likely to gain from a Dutch tax, has no aviation tax of its own. (One was considered by the Belgian government at the same time as the original Dutch one but the proposal was abandoned). Germany does have an airport tax, since 2011, and in its early days it had a marked effect on passenger numbers. The government there, which also had Federal elections recently, is reported to be reconsidering the tax as one of 20 measures to strengthen German aviation.

The two companies emphasised a national Dutch airline tax “does not help the environment” and interferes with maintaining a competitive aviation market. They insist that aviation in the Netherlands is the only transport sector that fully pays its own infrastructure and its security, having contributed in recent years more than EUR750 million to sound insulation and compensation for aircraft-related damage, which “is unique in the world”.

So how could Antwerp’s airport profit from the Dutch tax if it is introduced? One advantage it has it that it is the nearest Belgian city to the Dutch border, the central area being only 20 km from that border. Brussels International Airport is around 40 km (25 miles) to the south.

MAP – Located in the north of Belgium, Antwerp is just 20km from the Dutch border and could be an attractive alternative to avoid a proposed Dutch departure taxSource: Google Maps

That puts it within striking distance of a series of heavily populated southern Dutch cities and towns such as Breda, Tilburg, ‘s-Hertogenbosch, Bergen op Zoom, Roosendaal, Eindhoven and Helmond (the Brabantse Stedenrij or Brabant Region) with a collective population of almost two million. The local airport for the region is Eindhoven, majority (51%) owned by the Schiphol Group, and which handled 4.7 million passengers in 2016. All have fairly easy access to Antwerp by the E19/A16 highway.

Further to the east in that Dutch region Duesseldorf Airport is also an attraction but German taxes apply there. Similarly with the low-cost Niederrhein Airport, at Weeze in the Lower Rhine region of Germany.

Antwerp Airport noticed an 11% year-on-year rise in passengers departing from the Netherlands in 2Q2017, with growing numbers of Dutch travellers also departing Belgian airports. The key statistic here is that nearly 10% of its traffic hails from the Netherlands already.

So Antwerp could offer itself as a ‘no-tax’ airport to several million non-Belgian people seeking an alternative.

The airport has a small terminal with limited facilities. A short runway of 1,500m restricts it to aircraft no larger than a Boeing 737. It ranks as only the 1778th out of 3812 airports globally for seat capacity (Amsterdam Schiphol is 14th and Eindhoven is 310th).

It is yet to pass the 300,000 passenger per annum mark and annual throughput has been as low as 121,000 (2014). The airport has been impacted by the recent (2016) demise of VLM, which was based there but VLM’s impact prior to that was positive; the airport added exactly 100,000 passengers between 2014 and 2015 and growth in that year was 82%, followed by 25% in 2016.

CHART – Antwerp International Airport witnessed strong growth between 2014 and 2016, but in the first nine months of 2017 traffic has slumped -4.2%Source: CAPA – Centre for Aviation and Antwerp International Airport reports

Cityjet, the previous parent of VLM, remains the largest pure scheduled carrier, with a service to London City, which terminates at the end of Oct-2017 to be replaced by one operated by the start-up VLM Airlines Slovenia, a subsidiary of SHS Aviation Slovenia, which is part of SHS Aviation – the company that acquired VLM Airlines in 2016. The vast majority of services though are offered by TUI Airlines Belgium and while that airline remains there is at least a solid base on which to build.

CHART – Operations at Antwerp International Airport are currently dominated by the leisure activities of TUI Airlines Belgium for the week commencing 16-Oct-2017Source: CAPA -Centre for Aviation and OAG

Despite the proximity of Brussels Airport and that fact that most Belgian LCC services operate from Charleroi Airport, a similar distance to the south of Brussels, it is surprising that Antwerp Airport is so small. A city of 500,000 people in a metropolitan area of 1.2 million, it has the second largest port in Europe. Indeed it has been part of a port network of air services in Europe in the past, being connected to others such as Hamburg, Rotterdam and London. But as some of those ports declined so did the need for an air service linking them.

Today Antwerp is a major trade and cultural centre, and is possibly the world’s second most multi-cultural city, with 170 nationalities present. The ‘Diamond Capital’ of the world owing to its large diamond district it also has extensive tourist attractions.

But in the absence of the air traffic these advantages should bring it is within its rights to seek cross-border traffic, which it can achieve if its charges are sufficiently competitive in addition to the ‘tax break’ it can offer passengers. At the same time, though, it remains limited by its infrastructure. As far as is known, no enhancements are planned.