KLM stops direct plug to Manila

But Clarifies its here to stay!

November 11, 2011

Air France-KLM, has announced that it will scrap its direct Manila-Amsterdam route starting April 2012, according to Cees Ursem, Air France-KLM country manager.

“Our flight has becomes unsustainable to continue because of declining passenger numbers. Couple it with unreasonable tax regime and our business doesn't look so good. ” Ursem said.

The airline reduced its direct Amsterdam-Manila flight from 7 to 6 flights weekly starting from its Winter Schedule on October 31 which is a peak season for them, and by Summer 2012 it will stop in Hong Kong on April before proceeding to Manila and vice-versa.

Data from Civil Aeronautics Board revealed that  Air France-KLM registered a declining passenger numbers to Amsterdam and Europe as compared to figures posted in the previous years. Manila used to be serviced by Boeing 777-300ER last year. Now, it downgraded its service on a much smaller Boeing 777-200ER plane.

The carrier handled some 100,000 passengers from the Philippines last year with 70% of its offered seat taken.

“The strategy is not actually new. KLM used to stop in Hong Kong before they make direct flights to the Philippines. So basically we are just taking one step backward.” Ursem said.

Air France-KLM has no fifth freedom rights to and from Hong Kong and is therefore not allowed to pick up passengers to unload to the crown colony except passengers from Manila on their way to Amsterdam.

“If we can't fill the plane then there is no point flying direct or flying more because overhead expenses for long haul flight ain't cheap,” he adds.

KLM's Manila office will be cut down and some 15 employees will have to go. Our hotel bookings for flight crew which averages 36 rooms a day at Sofitel will also have to be cancelled, Ursem said.

“But we want to maintain our strategic presence in the country. After all we are already the oldest foreign airline operating here. That is already an achievement for us. And since we can't sustain direct flights, you can always fly via stop-over and make  onward connection. That way the country is still in our network.” Ursem explains.

KLM has been using similar strategy to other destinations in Asia from the likes of Jakarta which stops at Singapore, as well as Taipei and Ho Chi Minh which stops in Bangkok Thailand. 

The drawback there is the time but you can always compensate it with lower fares, so the flight becomes competitive and reasonable for the budget conscious.”

Cees Ursem sees the growing presence of Gulf -based carriers operating  in Manila a factor in their decision.

“If you can see, Gulf-based airlines has been growing leap and bounds here, adding more seats and frequency to Europe via their hub in the Middle East” says the KLM country manager, citing Emirates, Ethihad, Qatar and Gulf EAir as examples which flew merely 7-10 flights per week two years ago but now operates 14 flights a week or double daily as compared to them.

“That is 16 more wide body flights to the Philippines carrying more than 350 people per flight. That is roughly 5,000 passengers a week and with 8,000 new passengers per week at Manila, imagine how much do they get from the rest of us” laments Ursem.

KLM started flying to the Philippines in 1951 and is the oldest foreign carrier in the country operating under the same name. It will celebrate its 60th year of operations in December 2011.