Air France-KLM stops Manila-Europe flight

By Recto Mercene, BusinessMirror

Posted at Mar 28 2012 07:08 AM | Updated as of Mar 29 2012 12:12 AM

MANILA, Philippines - The general manager for South China of Air France-KLM (AF-KLM), Cees Urcem, on Monday said he was “very happy” with the announcement that the Common Carrier’s Tax (CCT) bill has been approved on second reading in Congress. But he said the airline would still have to study whether or not it would resume direct flights from Amsterdam to the Philippines, and vice versa.

The last Air France-KLM flight left Manila for Amsterdam on Sunday night. The flights were discontinued because of the CCT.

Urcem made the statement after he was informed that House Bill 444 had been approved on second reading; the measure now needs only the approval of President Aquino to become law.

Once signed, the CCT, which earns the Bureau of Internal Revenue some P1.3 billion in annual income, would be scrapped.

“I am very happy, but we will have to reconsider the operations. You have to make decisions long in advance. You are working with very, very expensive aircraft and you have to make a complete summer and winter schedule,” Urceem said.

He added: “We cannot bring them [direct flights] back to the old schedule anymore, but as we mentioned before, if the change comes and it is final, we will reconsider.”

Earlier, Urceem said that they needed to see the total abolition of the CCT before KLM and the rest of the European airlines decide to resume direct flights from Europe to Manila.

AF-KLM terminated 60 years of direct flights to Manila and started intermediate stops to Taipei in December 2011 after complaining of difficult economic circumstances and high fuel costs servicing the Manila-Amsterdam routes.

However, the airline said it has decided to transform its current non-stop operations between Manila and Amsterdam to one, with an intermediate stop in Taipei to pick up passengers before continuing the journey onward.

Scores of European carriers have terminated direct flights from Manila to Europein the past years because of the imposition of the 3-percent CCT and 2.5-percent gross on billings tax.