More Airline Pull-outs Could Hurt the Philippines

The local travel trade is hoping that the Philippine lawmakers will approve the abolishment of an airline tax, which has been roundly criticised for its detrimental effect on the destination.  KLM – the last carrier to operate direct flights from Europe to the Philippines – recently announced it would add an intermediate stop in either Hong Kong or Taipei to its Amsterdam-Manila route from April.   Cees Ursem, Air France-KLM general manager South China Sea, attributed the decision to the financial burden dealt by two taxes – the common carrier tax (CCT), a three per cent business tax on gross receipts, and a 2.5 per cent gross Philippine billings tax. Stephen Crowdey, first vice chairman of the Board of Airline Representatives, said that “less non-stop capacity significantly reduces the appeal of the Philippines for  the trade and tourists alike,” a concern shared by inbound travel companies. Philippine Travel Agencies Association president, Aileen Clemente, explained: “The Philippines will be reliant on flights connecting through other Asian cities, which may be the deciding factor for tourists from Europe, (who may) just conclude their trip in an Asian hub of their chosen airline.”