Corporate News

Qatar Airways firm on decision to halt Cebu flights

Posted on March 10, 2012

CEBU CITY -- Despite efforts by stakeholders here to have the decision reconsidered, Qatar Airways is reportedly pushing through with plans to halt flights between Doha and Cebu by March 27 due to taxes imposed on foreign airlines and rising fuel costs.

Nigel Paul C. Villarete, Mactan-Cebu International Airport Authority (MCIAA) general manager, said the country manager of Qatar Airways instead promised to just consider reopening the route in the future.

He said the airline management cited rising fuel costs as well as the carrier taxes imposed by the Philippine government as behind its decision.

Foreign airlines are slapped with a 3% common carriers tax and a 2.5% gross Philippine billings tax on cargo and passenger revenues originating from the country.

KLM Royal Dutch Airlines, for its part, will stop flying direct flights between Manila and Amsterdam come March 26, and is instead offering a stopover flight in Taiwan.

Mr. Villarete was with Cebu officials, businessmen, and tourism players who recently met Abdallah Okasha, Philippine country manager of Qatar Airways.

Mr. Villarete said Mr. Okasha promised to review the reopening of the Doha-Cebu line once economic conditions improve and there is a positive feedback to the petition of airline associations to scrap the imposition of carrier taxes. Qatar operates flights from Doha to Cebu three times weekly.

Mr. Villarete and Department of Tourism (DOT) Central Visayas regional director Rowena Montecillo said the cancellation of the flights will have an effect on tourists from Europe since the Doha-Cebu line provide them the easiest route to the island. Visitors to Cebu from European countries grew 6.43% in 2011 compared to 2010, from 116,763 to 124,276.

Mr. Villarete, however, said he was confident that other players will come in, citing reports stating that Emirates and Etihad Airways are interested in the route.

Business groups in Cebu had written Qatar Airways to ask the airline to reconsider its decision. Cebu Chamber of Commerce and Industry president Samuel Chioson, in his letter, said Cebu is "in dire need of the services of your airways to connect and from Europe."

He added that they've also asked the Philippine Chamber of Commerce and Industry (PCCI) to intercede in behalf of the airline so its bilateral agreement with the Philippine government can be reviewed and its concerns addressed. -- M.D. Limpag