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SEAir and Tiger await ruling on domestic route agreement
Marianne Carandang, Manila, May 25, 2011

SOUTHEAST Asian Air's (SEAir) Manila-Cebu and Manila-Davao routes, due to launch in July, have been suspended by Philippine civil aviation authorities, who are investigating whether the airline's partnership with Singapore's Tiger Airways violates local laws.


The temporary cease-and-desist order was issued after joint and separate complaints were filed by the country’s four other carriers – Philippine Airlines, Cebu Pacific, Zest Air, and Air Philippines Express.


The complaints allege cabotage rights – the license to carry passengers and shipment cargo between two points in one country, and which are usually extended only to domestic airlines – are being violated by SEAir’s aircraft lease and marketing agreement with the Singapore carrier. SEAir’s two new routes would be operated using Tiger Airways aircraft.


Wyrlou Samodio, head of the Civil Aviation Board’s legal division, told TTG Asia e-Daily on Monday: “SEAir’s lease agreement (with Tiger Airways) will be affected if the findings show it was used to circumvent cabotage rules.”


SEAir’s relationship with Tiger Airways dates back to 2006, when SEAir signed the aircraft lease agreement, as well as a marketing arrangement to use Tiger Airways’ reservations system. Tiger Airways is currently in the process of acquiring a 32.5 per cent stake in SEAir for about US$6 million.


SEAir operates three international routes from Clark International Airport using Tiger Airways aircraft: Singapore, launched last December; Hong Kong, launched last March; and Macau, due to begin on May 27.


Tiger Airways has been busy making other budget airline investments in South-east Asia. Last week, the carrier said it would acquire 33 per cent of Indonesia-based PT Mandala Airlines, which is in rescue talks with an Indonesian private equity fund planning to secure 51 per cent majority ownership.


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