KLM Royal Dutch Airlines is set to transform its non-stop Amsterdam-Manila services into a one-stop service via Taiwan or Hong Kong in April. The move would result in a reduction in the number of seats available from Europe and Amsterdam to Manila, since capacity will be shared by both stops.
Currently the only European carrier still operating direct flights to Manila, the restructure is part of KLM’s efforts to counter the impact of the Common Carrier Tax (three per cent) and Gross Philippine Billings tax (2.5 per cent) being levied by Philippine authorities.
Philippine-based airlines operating both domestic and international services are exempted from paying the taxes.
KLM’s general manager South China Sea, Cees Ursem, said: “These taxes are a heavy burden for all foreign carriers, but especially for European carriers. That’s why all the European carriers have left the Philippines in the last decade.”
“We still think that the Philippines is a market with a lot of potential, but it has its limitation when it is getting too expensive for foreign carriers,” he added.
European carriers that have exited the Philippines in recent years include Aeroflot, British Airways, Alitalia, Swissair, Air France and Lufthansa.