AS IT expands its operations in the Philippines, linking cities like Cebu to other gateways, AirAsia Philippines reiterated its appeal to the government to scrap the travel tax for outbound passengers.
AirAsia Philippines Chief Executive Officer Dexter Comendador said policies like that are not travel-friendly, especially to Filipinos who travel in groups for short vacations abroad.
“You haven’t left the country and you already spend this much,” he said. “It’s a nuisance taxing our fellow countrymen when they travel.”
Comendador said removing the travel tax would stir outbound tourism, and that the country could offset losses by introducing initiatives in the airport that would entice both inbound and outbound guests to spend more.
AirAsia has submitted a proposal on this to the Departments of Finance, Tourism, Trade and Industry, and Transportation.
Airline passengers departing from the Philippines are levied a travel tax of P1,620 for economy-class passage and P2,700 for first-class passage.
Those exempted from paying travel tax are overseas Filipino workers, Filipinos with permanent residency abroad staying in the Philippines for less than a year, and children younger than two years old.
However, scrapping the travel tax would need legislative action.
Under Republic Act 9593 or the Tourism Act of 2009, 50 percent of the travel tax collection will go to the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) while 40 percent is for the Commission on Higher Education for tourism-related programs. The remainder will be given to the National Commission for Culture and the Arts.
‘Induced revenues’
Citing their own study, Comendador said that if the government would take away the travel tax and airport fee, it would lose roughly P4 billion in five years.
But, he said, the country stands to gain P299 billion in terms of tourists coming in, from direct revenues and induced revenues.
AirAsia has yet to get answers from the agencies.
Last week, Comendador announced that they are mounting direct flights from Cebu to Shenzhen, Shanghai, and Hangzhou.
Earlier, tourism consultant and Consul Robert Lim Joseph, chairman emeritus of the Network of Independent Travel and Allied Services (Nitas), said scrapping the travel tax will increase outbound tourism and boost the country’s image as one of those countries that have removed impediments to travel and tourism.
More local and international flights are expected to come once new airport terminals open, like the one in Mactan, Cebu that is set to open this year.
Low-cost terminal
Besides scrapping the travel tax, a low-cost carrier terminal (LCCT) in the Philippines is also being lobbied for by the airline.
Comendador said they are in talks to build budget terminals similar to the Kuala Lumpur International Airport 2. The airline is eyeing Clark International Airport Terminal 1 to be converted into a budget airline. Other potential sites are Panglao and Davao airports.
An LCCT allows 25 minutes turnaround time, as it uses stairways instead of tubes, which will allow passengers to deplane in five to 10 minutes.
Comendador said the airline is striving not only to provide guests a better travel experience but also become more efficient and cost-friendly to price-sensitive travelers. (KOC)