Airfares may rise with TRAIN, removal of incentives, warns PAL


Posted at Feb 20 2018 08:47 PM | Updated as of Feb 21 2018 01:11 AM

MANILA - Airlines may increase fares following the imposition of new excise taxes on fuel, coupled with the proposed removal of incentives for carriers, the president of the Philippine Airlines said Tuesday. 
"Sa amin we're affected because there's an increase in the excise tax from P3.67 per liter to P4.00 (for jet fuel). It would mean a few hundred million (pesos) additional cost to us," PAL president and chief operating officer Jaime Bautista said. 

"And of course if you want to be operating with a small profit, you will have to pass this on to the passengers," he added.

Bautista however declined to give an exact figure about how much the fare hikes will be or how soon they may be implemented. 

The PAL chief also said the airline would be affected by the second package of the Tax Reform for Acceleration and Inclusion (TRAIN).

The Department of Finance has said that Package 2 of TRAIN will lower corporate income taxes to 25 percent from 30 percent currently, but will also remove tax holidays for some industries and companies. 

"Lets say if the tax incentives are removed from us, considering our operations in 2017, that would mean an additional cost for us of $200M per year," Bautista said. 

This cost would also be passed on to passengers, Bautista said. 

He added that if local airlines raise airfares, they would lose their competitive advantage over foreign carriers. -- with a report from Michelle Ong, ABS-CBN News