SEAIR and Tiger violating Philippine Laws?

[B747-800]

Are SEAIR and TIGER wiolating Philippine Laws? Interesting article: http://www.yehey.com/News/Article.aspx?id=223714

Foreign airlines using Pinoy ‘dummies’ to get around EO
Manila Times
4 September 2008 | 12:10 AM
SUBIC BAY FREEPORT -- A group of travel agencies on Wednesday revealed that several foreigners have engaged the services of Filipino executives to act as “dummies” to get around the provisions of Executive Order 500A.
Robert Lim Joseph, chairman emeritus of the National Association of Independent Travel Agencies (Naitas) said that Filipino air companies such as the Philippine Airlines, Cebu Pacific and Asian Spirit have raised an alarm over the alleged attempt of several foreigners (whom he refused to name as of press time) to circumvent Philippine aviation laws by having Filipinos as fronts.
Joseph explained that EO 500A rationalized the unilateral grant of traffic rights under the original EO 500, which originally called for the outright, unilateral and unlimited grant of all traffic rights.
http://ads.teamyehey.com/ads/adview.php?what=zone:319&n=a703a20b (http://ads.teamyehey.com/ads/adclick.php?n=a703a20b)On the other hand, EO 500A allowed outright, unilateral and unlimited third and fourth freedom traffic rights to foreign carriers.
Third and fourth traffic rights refer to back-and-forth flights between two countries, by the carriers of both countries. For instance, Singapore Airlines, one of the biggest investors in Diosdado Macapagal International Airport (DMIA), can mount unlimited flights between Manila and the island-state under the existing EO 500A.
Joseph said that foreigners with interests in the airline industry are now opposing the unilateral open skies at the DMIA, in Clark, Pampanga, and Subic International Airport in Olongapo due to the new EO.
Joseph said the local airline firms are alarmed over the purported attempt in the wake of Southeast Asian Airlines’ (Seair) expansion plans.
Seair signed a lease agreement with Singapore carrier Tiger Airways for the lease of two brand-new A320 aircraft in September 2006. Tiger Airways flies to Singapore and Macau from DMIA.
The three Filipino carriers fear that Tiger Airways will use its agreement with Seair to circumvent local aviation policies.
Seair President Avelino Zapanta said, when asked to comment over the accusation, “They are saying that because we have a business relationship with Tiger, the airline from Singapore will take advantage of that agreement. We are not fronting for Tiger Air.”
With the new A320 planes, Seair plans to fly daily from Clark to Macau and Singapore by November, and later to Bangkok, Hong Kong, Taipei and Incheon, in South Korea.
Aviation experts claim Tiger Airways would be using Seair to be able to ferry Filipino workers and tourists to these international destinations using flight entitlements given to the Philippine government for local carriers.
The Manila Times tried, but failed to get in touch with officials from Tiger Air over this issue.

[lavinlaud]

To anyone out there interested in this thread, especially my fellow kababayans

"Truth shall prevail " or "Veritas vos liberabit" are statements which have always inspired me and maybe should have the same effect on "others" as well:ugh:

Unfortunately much of the truth is lacking in this inconclusive/speculative report about, yes I dare to call it, propaganda against a legal business commitment between a majority Filipino owned airline, leasing airliners from abroad to provide the Filipino community with safe, reliable and most importantly affordable means of air transportation!

I would agree that laws are there to PROTECT and should always be in the interest of the public and NOT the individual or a minority, this is a basic principle of democracy and thus doesn't violate any law(s)! Having observed local politics and especially the aviation sector I can only say that a lot needs to be done with regards to transparency and yes PLAYING BY THE RULES, aka FAIR PLAY.

Please allow me to state some facts here:

1. South East Asian Airlines (SEAIR) is a local airline (second oldest in the
Philippines) which to 99% employs Filipinos, is managed by gentlemen who are
in so many ways true aviators and secondary businessmen!
By aquiring new airplanes they would create hundreds of opportunities for
Filipino workers and their families! Jobs are what this country needs, or do I
stand wrong?

2. Regarding the LAW : In 2006 a leasing agreement was inked between SEAIR
and TigerAirways. And I do think that when the President of the Philippines
herself shakes hand with the aformentioned parites during the venue, she should
beforhand be enlightend by her legal advisors.

3. I do not know whether the public is aware of the fact that whenever they fly with
other local carriers they might be lucky enough of flying in airplanes not owned
but LEASED from abroad. :ok: As a matter of fact many airlines abroad order
hundreds of airplanes with companies such as Boeing or Airbus, no not to
operate them but to either lease or sell them later on to other airlines at top
market rates. FYI Tiger has ordered 70 Airbusses, didn't know that Singapore
has such a vast territory and population :O

4. Since the advent of other local carriers such as CebuPacific etc. this market has
become more POCKET friendly by dissolving a monopolistic-domestic aviation
market. THANK YOU CebuPax!!! I am quite sure that many of you can recal
for how much tickets went over the counter around the millenium! EVERY JUAN SHOULD FLY NOW, hell yes!!!!! And believe in me more competition means cheaper airfares and that's what especially OFWs need. Cos most of them work hard, earn peanuts and every now and then would like to see their familes without forking out a little fortune :ok:

5. What big deal is it, if Tiger would connect passengers to Seair or vice versa?
Don't other local carriers funnel 1000s of passengers a year to airlines like (and
vv.) EMIRATES, QATAR, GULFAIR or why doesn't the FLAG CARRIER of
the Philippines fly to Saudi anymore? Why is it that a B777 of ThaiAirways
flies ex-Manila DAILY to Japan :=Couldn't SEAIR (with local crews, let's no
get into equipment issues) operate or any other local carrier do this job?

6. Point six? I was about to get into some things here but I know by only reading
point 1-5, everyone who utilizes common sense would agree THE LAW and
THE TRUTH are in favour of the SEAIR. THE QUESTION remains who really
does "manipulate" the local aviation market :mad:

My advice -DON'T THROW WITH STONES WHEN YOU SIT IN A HOUSE
MADE OF GLASS- or u myt ned a real, gud Dr.



Written by someone who is not in favour of any local airline BUT IN FAVOUR OF THE FILIPINO COMMUNITY.

"Walang tatalo sa totoo" , enlightend by McDo :)

[Cessna1052]

Is SEAIR president A. Zapanta the same guy running the show in PAL years ago? If he is :{:{:{:{:{

[B747-800]

And I believe in Sta Claus!

Didn't I met this guy Nik ???? a couple of weeks ago in SIN and he told me something different when he was in a good talking mood?

Guess you and the REAL owners (not the dummies) should get their story lines synchronized. :cool::cool::cool:

[B747-800]

Interesting newsclip from a paper over in the Philippines:

Untitled Document (http://www.manilastandardtoday.com/?page=business1_sept22_2008)

Yao may drop Seair bid

By Elaine Ramos Alanguilan
Businessman Alfredo Yao will likely dropping his bid to acquire Southeast Asian Airlines if talks with owners continue to drag.
A source privy to the negotiations said Yao was aiming to consummate the deal within the year and “if talks drag beyond that timeframe, he just might drop his bid.”
The source said Yao was concerned about the contentious issue on the pricing of the acquisition and the timing of the deal as well.
Talks have dragged on for quite some time with both parties still threshing out issues, including making Seair’s owners agree to a minority stake.
Yao earlier acquired the country’s fourth-biggest carrier, Asian Spirit, for P1 billion in March and has remained keen on buying Seair in his bid to make his asset a major force in the competitive budget airline industry.
Yao, who owns juice manufacturer Zest-O Corp., was earlier reported to be in the final stages of negotiations with Seair owners, including Nikos Gitsis, Iren Dornier and Tomas Lopez. The cost of acquisition was reportedly finalized between the two parties.
Yao said earlier he planned to merge the operations of the two carriers to serve the highly competitive budget airline market.
But months into the negotiations and with no signs of the deal taking off, Seair decided to pursue a long-delayed expansion program on its own.
“Buy-in is on a standstill. Talks are not progressing. We’re moving forward on our own,” Seair president Avelino Zapanta said earlier.
Seair needs infusion of additional capital to bankroll its expansion that involves a bigger fleet to support more domestic and regional destinations.
Yao’s offer to acquire majority of the airline and infuse additional equity would have not come at a better time.
But Zapanta said while talks were still hanging, the airline would renew efforts to secure the long-delayed approval from the Civil Aeronautics Board for the lease of two aircraft to be used for regional destinations. Seair has 11 planes that fly to 16 domestic destinations, including Caticlan, the gateway to Boracay, and Palawan. Once it gets the approval of the aeronautics board, Seair plans to mount flights to regional destinations such as Korea, Singapore, Macau and Bangkok.

[B747-800]

what's happening over in the PI?

Congressional franchise makes Seair optimistic (http://businessmirror.com.ph/index.php?option=com_content&view=article&id=2372:congressional-franchise-makes-seair-optimistic&catid=23:topnews&Itemid=58)

Congressional franchise makes Seair optimistic (http://businessmirror.com.ph/index.php?option=com_content&view=article&id=2372:congressional-franchise-makes-seair-optimistic&catid=23:topnews&Itemid=58)

LEISURE carrier Southeast Asian Airlines Inc. (Seair) has just been granted a franchise to operate domestic and international routes by the Philippine Congress.

The franchise is expected to boost Seair’s value, making it more attractive to potential buyers, according to an airline official and a legislator who coauthored a bill granting the franchise.

Seair owners, led by the foreign partnership of Iren Dornier and Nikos Gitsis and the Filipino group of Tomas Lopez Jr., have been trying to negotiate for a buyout of their shares with prospective investors, after their talks with Filipino-Chinese businessman Alfredo Yao fell through in May. Dornier and Gitsis own 40 percent of Seair while the rest of the shares are owned by Lopez’s group. Yao wanted to merge the operations of Seair with that of Zest Airways, formerly Asian Spirit, which he acquired in March 2008.

As this developed, a Seair official said the airline is still on an expansion mode and unaffected by the current global economic crisis which is seen dampening tourism worldwide. In its October 2008 report, the World Tourism Organization projected global tourism growth slowing down to a range of zero percent to 2 percent for 2009, from a revised growth of 2 percent to 3 percent in 2008. Average tourism growth from 2004 to 2007 was 7 percent.

Interviewed over the weekend, Seair president Avelino Zapanta said the law granting the carrier’s congressional franchise was recently signed by Sen. Manuel Villar, “among his last acts as Senate President,” and is now in Malacañang “awaiting the signature of President Arroyo.”

He said the Senate virtually adopted House Bill (HB) 3788, coauthored by Reps. Eleajandro Jesus Madrona, Ferjenel Biron, Teodoro Locsin Jr., et al.—who comprise the House Committee on Legislative Franchises—which is “more complete than that of the Senate’s bill.”

Through Committee Report 97, HB 3788 was endorsed for approval by the Senate Committee on Public Services, chaired by Sen. Juan Ponce Enrile, on August 28, “without amendment, taking into consideration Senate Bill (SB) 2376.” The latter was coauthored by Senators Ponce Enrile and Juan Miguel Zubiri. SB 2376 is likewise a proposed legislation granting Seair the “franchise to establish, operate and maintain domestic and international air transport services, with Clarkfield, Pampanga as its base.”

Seair’s congressional franchise has a term of 25 years upon the law’s effectivity.

Meanwhile, in a text message from London, Locsin said the congressional franchise “gives Seair permanency,” such that its operations cannot just be indiscriminately cancelled by any government agency without due cause.

This was echoed by Zapanta, who said the franchise gives the airline “a sense of legitimacy; that we’re not operating like a colorum anymore.” Colorum is a Filipino term usually applied to jeepneys and buses which do not have the license to ply certain routes. While it flies without a congressional franchise, Seair has a certificate of public convenience and necessity from the Civil Aeronautics Board (CAB), allowing the carrier to operate scheduled flight services.

Locsin added that with the franchise, the airline “can also borrow [loans], as well as sell its equity at a premium.”

Asked about the advantage of having a congressional franchise, considering that Seair has been operating and expanding since 1995, Zapanta explained that while “some banks will probably consider that [an airline’s franchise] before extending a loan, until you sell that airline, that value [of having a congressional franchise] is not actually manifested. It strengthens your value.”

The airline executive agreed that now that Seair has acquired its franchise, its owners could demand a higher price from potential buyers. When Yao group’s offered to buy out Seair’s owners, the latter were only offered $2 million (worth P84.63 million in May) in cash. With the congressional franchise, industry analysts estimate that Seair owners can now command even “three times that amount.”

Zapanta said the congressional franchise also gives the airline tax incentives such as duty-free importation of capital equipment and income tax holidays.

Locsin, meanwhile, said the franchise would enable Seair to continue flying, fostering competition among the airlines. “I believe that when you have more competition in the industry, it can only result in better service for the airline travelers.”

Meanwhile, Zapanta said Seair remains optimistic about the local and regional tourism market despite projections that the global financial crisis will slow down international travel beginning next year. “We’re bullish and even expanding our routes. We recently were allowed to operate in Singapore, for instance.”

On November 28, the airline will commence flights to Kota Kinabalu; in April 2009, Singapore and Macau; August 2009, Bangkok and Hong Kong, as well as Cebu and Davao; and in September 2009, “we’re looking at Inchon, Kuala Lumpur and Kaohsiung,” he added. All new flights will be out of the Diosdado Macapagal International Airport in Clark, Pampanga, which has more liberal aviation policies.

He stressed that the regional flights are “basically a Seair operation,” but using two aircraft, Airbus 320s, leased from Tiger Airways, a budget carrier based in Singapore. On July 31, the CAB approved the lease agreement between Seair and Tiger Air, two years after both carriers signed it. Local airlines had been opposing the agreement, saying it was a prelude to granting fifth freedom rights to Tiger Air, which they claimed would fly local destinations using Seair.

Fifth freedom rights allow an airline to pick up passengers from one country, transport them to another country, pick up passengers there, and fly to yet another country, like Philippine Airlines’s Manila-Vancouver-Las Vegas-Manila route.

Under the terms of its congressional franchise and in accordance with provisions in the Philippine Constitution on public utilities, Seair is also mandated to offer at least 30 percent of its outstanding capital stock to the public, “within five years from commencement of its operations.” But under the rules of the Philippine Stock Exchange, a company may list its shares in the market after three years of continued profitability. However, in certain instances, this requirement has been waived, as in the case of mining companies and small and medium enterprises.

In May this year, Seair owners rejected the offer of Yao to purchase 60 percent of the airline, because they felt it was a very low price for their shares. While the agreement between both groups was for Yao to purchase Seair for $3.75 million (P158 million then), the actual cash involved would only be $2 million.

[ads1963]

When are the two A320 of SEAIR coming?

[VS-Toga]

I flew with Seair on holiday.

Let 410 into Coron Island.

Great fun- great flight.

I'd swap Island hopping for long haul anyday. (not the pay packet naturally!)