The Finance department is looking at ways to slash aviation travel costs in a bid to boost trade and tourism.
This could include the scrapping of the airport or departure tax in small airports, Finance Secretary Carlos Dominguez 3rd said in a statement on Monday.
He also broached the possibility of airports selling or leasing gates to airlines in lieu of 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 was quoted as having told AirAsia Group Chief Executive Tony Fernandes.
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.
The Finance department said that Fernandes, during a courtesy call on Dominguez, noted that the lowering or scrapping of the airport or departure tax would help realize AirAsia\s expansion plans.
Fernandes raised the issue of either removing or lowering rates at small airports as he welcomed Dominguez’s proposal for airports to sell or lease gates, the DoF added.
The AirAsia chief said the low-cost airline was 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,” he was quoted as saying by the DoF.
Fernandes said there would be a “massive opportunity” in expanding the tourism sector once air travel costs 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 also paid a courtesy call on President Rodrigo Duterte.
On the issue of privatizing airports, Dominguez told Fernandes that the government was bidding out operations and maintenance contracts for six facilities while the rehabilitation of others could be done through public-private partnerships.
The Finance chief, a former chairman of flag carrier Philippine Airlines, also assured Fernandes that he would take “a hard stand” against a proposal to charge airlines for the overtime pay of Customs personnel posted 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,” he said.