Regulators reject rivals’ plea to halt SEAIR-Tiger flights

By Kathleen A. Martin

December 20, 2010

THE CIVIL Aeronautics Board (CAB) has allowed a partnership between South East Asian Airlines (SEAIR) and Singapore-based Tiger Airways to proceed despite complaints from four local carriers.

CAB Executive Director Carmelo L. Arcilla said the carriers’ request to issue a cease-and-desist-order against SEAIR-Tiger Airways flights to Singapore from the Clark airport over legal questions was not granted.

“The matter is undergoing due process already and it will be set for a hearing,” Mr. Arcilla told yesterday.

Mr. Arcilla said that after four local carriers, namely Philippine Airlines (PAL), Cebu Pacific, Air Philippines, and Zest Air, filed a consolidated opposition to the SEAIR-Tiger Airways deal last month, SEAIR was asked to comment. The four carriers are claiming SEAIR is allowing a takeover of a foreign airline in the guise of a marketing and leasing deals.

“The first step was to furnish the respondent a copy of the complaint and ask them to comment on the allegations, and now that SEAIR has responded, it will be set for hearing,” Mr. Arcilla said.

Mr. Arcilla said a hearing will “probably be scheduled next week,” as this will be the next step in the process.

In a letter dated Dec. 9, PAL wrote on behalf of the other carriers to CAB Chairman Glicerio V. Sicat, reiterating their opposition to the partnership first raised in a letter to the board last Nov. 26.

“We believe that we are raising compelling questions on whether the SEAIR/Tiger service may not actually be a Philippine carrier operation, but instead the first salvo of a foreign (Singaporean) air carrier operating a Philippine-based international route network in the guise of a Philippine air carrier, and making use of Philippine carrier international traffic rights privileges,” Ma. Socorro R. Gonzaga, PAL senior assistant vice-president for external affairs, said in the letter.

“Indeed, the operation may be expanded to include domestic routes as well, raising likewise the question of effectively granting regular cabotage access to a foreign airline for the first time in [Philippine] history,” Ms. Gonzaga added.

The four carriers are pointing to CAB Resolution No. 51, which prohibits Tiger Airways from directly earning money from the partnership with SEAIR.

SEAIR and Tiger Airways announced the partnership in a joint statement last Nov. 23. Under the deal, two Airbus aircraft will be leased to SEAIR, and SEAIR seats will be distributed through Tiger Airways’ Internet booking system.

The first SEAIR-Tiger Airways flight from Clark to Singapore last Dec. 16 pushed through.

In a phone interview, SEAIR President Avelino L. Zapanta, said the complaints of the four local carriers were only a “rehash” of what they had filed in 2007, when SEAIR and Tiger Airways first sought to seal a partnership. The deal did not push through amid a global economic slowdown.

“In 2008, the case was dismissed in favor of SEAIR,” Mr. Zapanta said. “These are the same speculations and allegations three years ago and they have not come up with any new evidence,” he said.

PAL spokeswoman Cielo C. Villaluna said: “There is simply a concern regarding overcapacity and a possible price war among airlines. But PAL, as an airline, welcomes competition.” -- Businessworld

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