U.S. authorities are likely to retaliate against the Dutch government's decision to cut flights at Amsterdam's Schiphol airport, probably limiting slots for Dutch airline KLM at U.S. airports, airline lobby group IATA said on Tuesday.

"This decision is significantly more damaging than people have estimated," International Air Transport Association (IATA) head Willie Walsh said at an IATA conference in Amsterdam.

"It will mostly affect KLM, tearing apart the fabric of their network."

The Dutch government aims to cut flights at Schiphol, one of Europe's main air transport hubs, to 452,500 per year - almost 10% below 2019 levels, mainly to reduce noise pollution.

The move is fiercely contested by flag carrier KLM and industry groups, who claim it is in violation of the EU-U.S. "Open Skies" agreement granting airlines the right to operate in each other's countries.

The decision has meant that airlines without historic rights have received no Schiphol slots for summer 2024, while others received 3% fewer slots than before.

U.S. carrier JetBlue, one of the newcomers denied slots, last month urged the U.S. Department of Transportation to ban KLM from New York's John F. Kennedy International Airport in retaliation for the plans.

European Union and U.S. authorities held discussion behind closed doors on the matter on Monday, the EU's director for mobility and transport Magda Kopczynska told the conference.

"Certainly it is an important decision which has never been done before. We are really closely following this process," Kopczynska said without giving further details.

KLM CEO Marjan Rintel said she was hopeful the talks could help to change the government's mind and to find another solution to cut noise pollution at Schiphol.

"Yesterday the EU and U.S. exchanged ideas and we heard that at least there will be new meetings in the next coming months," the KLM chief said.

Rintel said the Dutch government had failed to follow the EU-prescribed approach of ruling out all other options to reduce noise before cutting the number of slots for airlines. (Reporting by Bart Meijer Editing by David Goodman and Mark Potter)