AirAsia Eyes Expansion of PH Services

Malaysia-based AirAsia has expressed interest in expanding its services in the Philippines to include flights from Davao City to key cities in China, Korea and Malaysia.

In his courtesy call on Finance Secretary Carlos Dominguez III, AirAsia Group CEO Tony Fernandes said the lowering or scrapping of the airport or departure tax in small airports will help in realizing the airline’s expansion plans in the Philippines.

Dominguez, in turn, said he will look into this possibility to help slash travel costs and boost trade and tourism.

The finance chief also broached the possibility of airports selling or leasing gates to airlines at different rates depending on the landing times, in lieu of imposing airport taxes.

“I have asked the DOF (Department of Finance) representatives in the airports to tell them to consider this differential pricing, selling gates, rather than a fixed tax,” Dominguez told Fernandes.

Fernandes raised the issue of either removing or lowering the rates in small airports to encourage airlines to put in more flights as he welcomed Dominguez’s proposal for airports to sell or lease gates as a viable alternative to the airport tax.

The AirAsia CEO said the low-cost airline is interested in expanding its existing Davao-Singapore flights to include routes from Davao City to China, Korea and Malaysia.

“There’s a big population here. There’s a good business here. We met some farmers who wish to send their cargos directly to these places,” Fernandes said.

Fernandes said there is a “massive opportunity” in expanding the tourism sector in the Philippines once the costs of air travel in coming here are made more affordable by budget airlines whose pricing will depend on how much they are charged for the use of airport terminals.

“The President mentioned the islands here and when I checked it, I said wow, it’s really amazing and we are not worried about Marawi and all that because we think tourism is tourism. People want to come here at a right price,” said Fernandes who earlier paid a courtesy call on President Duterte.

On the issue of privatizing airports, Dominguez told Fernandes that the government is bidding out the operations and maintenance for six airports while the rehabilitation of others could be done through Public-Private Partnerships (PPPs).

Dominguez, a former chairman of Philippine Airlines (PAL) also assured Fernandes that he will take “a hard stand” against the proposal to charge airlines for the overtime pay of Customs personnel at the airports.

“I don’t like it. We will get a hard stand on that. I used to complain about that when I was in PAL. You cannot earn 50 percent above your salary for overtime pay,” Dominguez said.

Joint Circular No. 1 series of 2015 issued by the Civil Service Commission and the Department of Budget and Management sets a maximum overtime pay of 50 percent of the base salary of a government employee. (DOF)