http://www.malaya.com.ph/oct19/busi6.htmlOriginally Posted by andy222
THE top executive of Air France-KLM in Manila, fed up with promises from bureaucrats that burdensome taxes would soon go, yesterday said direct flights between Manila and Amsterdam will cease next April.
"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," said Cees Ursem, country manager of Air France-KLM.
He said the only way the government can stop the airline from carrying out the planned withdrawal is to "abolish the common carriers tax and the gross Philippine billings tax on cargo and passenger revenues tomorrow."
"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 in the country.
The taxes, together with increasing competition from heavily subsidized Middle Eastern airlines, have forced other European airlines out of the Philippine market over the last decade.
Those that no longer serve Manila include British Airways, Sabena (Belgian airlines); Lufthansa (Germany); Alitalia (Italy); Scandinavian Airlines System (SAS); Swissair (now Swiss International Airlines); and Air France (which has a code-sharing arrangement with KLM).
Ursem, who has been in the country over the last two years, said that from November 1, the carrier will shift from daily flights to six times a week.
Next April, Air France-KLM will altogether stop direct flights to Manila and fly via Hong Kong instead, he said. "Then we resume daily operations again via Hong Kong," he added.
He said the move will also affect crew accommodations at local hotels because layovers will be spent in Hong Kong.
"We use 11,000 rooms in Manila per year but that will all be gone," Ursem said.
He said since the imposition of the taxes in 1997, seven European air carriers have ceased flying to Manila.
He said the taxes are especially harmful to airlines flying long distances to reach the Philippines, in view of 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 and Communications Secretary Mar Roxas was quoted in the papers as saying he would talk to them, Ursem said he has heard similar promises before.
"I have talked to Teves (former Finance Secretary Margarito Teves); Purisima, (Finance Secretary Cesar V. Purisima); Mandanas (Rep. Hermilando I. Mandanas, who is chairman of the House committee on ways and means), Belmonte, (Speaker Feliciano Belmonte Jr.); Lim (former Tourism Secretary Alberto Lim); Alvarez (former Customs Commissioner Angelito Alvarez); Ochoa (Executive Secretary Paquito Ochoa)."
He said he has sent many letters to President Aquino.
"How many more letters do we have to send? Who is solving our problem?" he said.
