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  1. Join Date
    Sep 2003
    Posts
    21,859
    #1
    The Philippines taxes out the last European carrier...

    Country to lose direct flights to Europe | BusinessWorld Online Edition

    Country to lose direct flights to Europe
    BY KATHLEEN A. MARTIN, Reporter
    Posted on October 16, 2011 11:04:41 PM

    AIR FRANCE-KLM, the only European carrier operating in the Philippines, will be phasing out direct Manila-Amsterdam flights due to issues with the country’s taxes.

    Reduced flights will start by end-October and the nonstop service will cease in April next year, said Cees Ursem, general manager for South China Sea at KLM Royal Dutch Airlines.


    He told BusinessWorld last week that this was in response to taxes levied by the Philippines on international carriers.


    “The airline industry is in a very, very bad shape already for a couple of years now... and here, we are punished with taxes of 5.5% over gross receipts,” Mr. Ursem said.


    Foreign airlines are slapped with a 3% common carriers tax and a 2.5% gross Philippine billings tax on cargo and passenger revenues originating from the country.


    By month’s end, Air France-KLM will be reducing Manila-Amsterdam flights to six times per week from seven, to be halted during the first quarter of 2012. Flights starting April will now have a Hong Kong detour.


    “We have to consider our operations... so by the end of October, we are reducing flights from seven to six. From April next year, we are not flying direct anymore to Manila,” Mr. Ursem said.


    “We are making an intermediate stop by Hong Kong to make sure that we reduce the amount of tax payments because we will not have so many passengers anymore to Manila,” he added.


    Mr. Ursem noted that Air France-KLM was the only airline offering direct flights from Manila to Europe, with all other European carriers having left within the last decade. December 5 would mark the airline’s 60th year of flying to the Philippines uninterrupted, he added.


    “After all the meetings with different stakeholders of the [Philippine] government in the past year...it all turned out to be unsuccessful,” Mr. Ursem said.


    The reduced service and end to direct flights will also mean Air France-KLM ending accommodation tie-ups with local hotels.


    “We’re also stopping our crew accommodations in Sofitel [Philippine Plaza] and that’s about 11,000 rooms per year,” Mr. Ursem said.


    Sofitel officials were not immediately available for comment.


    A European Chamber of Commerce of the Philippines (ECCP) official, meanwhile, said Air France-KLM’s move was the result of the Philippines’ unwillingness to address foreign carriers’ concerns.


    “We have been discussing with this government the need to reduce the costs for the foreign airlines,” ECCP Executive Vice-President Henry J. Schumacher told BusinessWorld. “This is bad for tourism and investment as travellers will no longer reach the Philippines non-stop.”


    The Civil Aeronautics Board (CAB), for its part, said Air France-KLM’s move would likely have a minimal impact on tourist arrivals.


    “I don’t think the effect will be very adverse as we have seen small numbers of tourist arrivals from Europe in the last couple of years as compared to other regions like Asia,” CAB Executive Director Carmelo L. Arcilla said.


    “We still have to wait and see how this will affect [tourism]. This will be a sad news for the country because that’s our only direct connection to Europe,” he added.

  2. Join Date
    Dec 2005
    Posts
    38,698
    #2
    A European Chamber of Commerce of the Philippines (ECCP) official, meanwhile, said Air France-KLM’s move was the result of the Philippines’ unwillingness to address foreign carriers’ concerns.

    “We have been discussing with this government the need to reduce the costs for the foreign airlines,” ECCP Executive Vice-President Henry J. Schumacher told BusinessWorld. “This is bad for tourism and investment as travellers will no longer reach the Philippines non-stop.”

    The Civil Aeronautics Board (CAB), for its part, said Air France-KLM’s move would likely have a minimal impact on tourist arrivals.

    “I don’t think the effect will be very adverse as we have seen small numbers of tourist arrivals from Europe in the last couple of years as compared to other regions like Asia,” CAB Executive Director Carmelo L. Arcilla said.

    “We still have to wait and see how this will affect [tourism]. This will be a sad news for the country because that’s our only direct connection to Europe,” he added.

    When everyone's trying so much to get a bigger piece of the world tourism pie,- we're giving up ours?...

    Ano ba naman ito??? :twak:

    14.2K:juggle:

  3. Join Date
    Nov 2005
    Posts
    34,801
    #3
    overtaxation is a disincentive to do business

    i guess the govt doesnt know that

    so sino talo ngayon?

    may tax ka nga... wala na yung magbabayad

  4. Join Date
    Aug 2004
    Posts
    22,710
    #4
    So... what else are we going to sacrifice to keep PAL going?

    We've lost a lot of technical personnel and pilots to foreign airlines because of the "maximum flight hours" policy. Check.

    We've driven away all the foreign airlines by using a tax as an anti-competition measure. Check.

    We're driving away all the tourists by forcing them to use the squatter shanty that is Terminal I if they don't use PAL. Check.

    What else can we do? I know! Force Cebu Pacific to split its fares with PAL!

    Ang pagbalik ng comeback...

  5. Join Date
    Sep 2003
    Posts
    21,859
    #5
    Welcome to the Philippines...

    KLM 'absolutely not happy' in PH | ABS-CBN News | Latest Philippine Headlines, Breaking News, Video, Analysis, Features

    KLM 'absolutely not happy' in PH
    By Recto Mercene, BusinessMirror
    Posted at 10/19/2011 7:31 AM | Updated as of 10/19/2011 2:06 PM

    MANILA, Philippines - Exasperated by the government’s inaction on its appeal, the head of Air France-KLM in the Philippines said the only way the government can stop the airline from carrying out its planned withdrawal is to “abolish the common carriers tax and the gross Philippine billings tax on cargo and passenger revenues tomorrow.”

    “Once we stop our flights, it will send a signal that doing business in the Philippines is very difficult and no European carrier will fly to the Philippines,” Cees Ursem, country manager of Air France-KLM, said during a telephone interview on Tuesday.

    “The airline business worldwide is in a very bad shape,” he said. “We are absolutely not happy and absolutely oppose these taxes.”

    The airline’s decision to stop direct flights between the two cities was prompted by the government’s insistence on charging a 3-percent common carriers tax and a 2.5-percent gross Philippine billings tax on cargo and passenger revenues originating from the country.

    The same taxes, together with increasing competition from heavily subsidized Middle Eastern competitors, have forced other European airlines out of the Philippine market over the last decade.

    Those that no longer fly out of Manila include [size=2]British Airways, Sabena, Lufthansa, Alitalia, Scandinavian Airlines System, Swissair (now Swiss International Airlines) and Air France.[/size]

    Starting November 1, Air France-KLM will move from daily flights to six times per week, said Ursem, who had been in the country for the last two years.

    And in April 2012, the airline will altogether stop direct flights to Manila and fly via Hong Kong instead before landing Manila.

    “Then we resume daily operations again via Hong Kong,” he said, adding that this move will decrease the number of European passengers going to the Philippines. It will also affect its crew accommodations for local hotels, since the airline’s crew will spend their layovers in Hong Kong.

    “We use 11,000 rooms in Manila per year but that will all be gone,” he said.

    Ursem is puzzled that despite European carriers extending help to local carriers, their plea to abolish the taxes had fallen on deaf ears.

    “We have been extending help to Philippine Airlines in providing training, so much money had been given to the Philippines,” he rued. “Now for the first time in all those years, we’re knocking on the doors of the Philippine government to help us, since all our requests for abolishing those taxes had been ignored.”

    Ursem said the taxes have been levied since 1997 and because of that, seven European air carriers had ceased flying out of Manila.

    He said the taxes are “especially harmful” to airlines flying long distances just to reach the Philippines, what with the high cost of aviation fuel.

    “The taxes are levied over the value of the ticket,” he said, adding that European carriers pay the maximum price, regional carriers pay far less and Philippine carriers do not pay the taxes at all.

    Told that Transportation Secretary Manuel Roxas II has said he would talk to the airline, Ursem said he had heard many promises before from the government bureaucrats, but all of them to no avail.

    “I have talked to [former Finance Secretary Margarito] Teves. [Finance Secretary Cesar] Purisima, [Rep. Ermilando] Mandanas, [House Speaker Feliciano] Belmonte, [former Tourism Secretary Alberto] Lim, (former Tourism Secretary Alberto] Lim, [former Customs Commissioner Angelito] Alvarez, [Executive Secretary Paquito] Ochoa,” he said.

    He said he also wrote to President Aquino.

    “How many more letters do we have to send? Who is solving our problem? Nothing happened,” he said. “We made it clear, if you don’t help us, we will make the action."

End of Direct Flights to Europe