Consultation of Schiphol’s cost allocation system for 2019-2021

The Netherlands Authority for Consumers and Markets (ACM) today published the draft decision regarding the cost allocation system of Amsterdam airport Schiphol for the period of 2019-2021. Schiphol uses this system to set the tariffs that it charges airlines. Such tariffs include landing tariffs and security tariffs. As a result of recent changes to the Dutch Aviation Act, Schiphol sets these tariffs for a period of three years starting in 2019. This replaces the current system with one-year tariffs.

Interested parties have until March 9 to submit their comments about the draft decision.

Regulation of Schiphol’s tariffs

Schiphol is only allowed to pass on to airlines the costs that are related to aviation and security. Before setting the tariffs it charges airlines, Schiphol must demonstrate, using a cost allocation system, what costs they have included in the tariffs for airlines. ACM must subsequently approve this system. When assessing the system, ACM checks whether Schiphol has applied acceptable accounting principles.

This decision for the period of 2019-2021 covers an estimated turnover of almost EUR 3 billion in aviation-related activities.

Current developments

Several expansion projects are planned over the next few years, such as a new concourse and a new terminal. In the assessment of the cost allocation system for 2019-2021, ACM has looked at the calculation method for the depreciation costs of these new buildings. ACM has concluded that the standard depreciation method that Schiphol uses for buildings is satisfactory. 

Efficiency incentives in the Dutch Aviation Act are meant to stimulate Schiphol to keep the actual costs of investment projects within the budget. For example, Schiphol is not allowed, for several years, to pass on to airlines certain financial setbacks from major investments. Schiphol has laid down in the cost allocation system how it will calculate differences (both positive and negative) between the budgeted investment costs and the actual costs, and how it will incorporate these differences in the tariffs.

Comments

ACM invites all interested parties to submit to ACM their comments about the draft decision. Airlines and other parties that have an interest in this decision have six weeks (starting today) to submit their comments.