FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
1 
SENATE 
S. No. 
376 
Introduced by Senator JUAN MIGUEL F. ZUBlRl 
EXPLANATORY NOTE 
Much of our country's progress and development rely on an efficient and 
reliable transportation system. 
Thus, the government should ensure the 
continuous growth of the transportation sector, such as encouraging the entry of 
new players or providing support to existing ones, if it were to enhance its 
economic opportunities and competitiveness. 
Southeast Asian Airlines, Inc., or more commonly known as SEAIR, flew 
its maiden flight in 1995 to Taytay, Palawan with 12 passengers. Since its 
maiden flight thirteen years ago, SEAIR has now been servicing 12 domestic 
routes and flew around 3 million domestic passengers until 2007. 
SEAIR has been providing the country with vital air transportation services 
since 1995. Over the years, SEAIR has expanded its routes by servicing 
abandoned destinations by bigger commercial airlines and has explored new and 
unchartered territories such as Siargao, Camiguin, Baler and Basco. SEAIR has 
boldly gone where no one has gone before. It has also opened missionary routes 
in Mindanao, from Zamboanga connecting Jolo, Tawi-Tawi and Cotabato, at a 
time when other airlines abandoned these areas. SEAIR has shortened the 
distance to and fro the far-flung areas, so to speak. 
SEAIR further aims to improve its services to the public thru expanding its 
operation to regional routes and provide additional low-cost travel alternatives 
within and outside the country to overseas Filipino workers and their families, 
business travelers and foreign tourists. 
Thus, to ensure the vibrancy of the air transportation sector through 
competition and level playing field, as well as the safety of the riding public, the 
grant of Congressional Franchise to SEAIR is imperative. 
In view of the foregoing, approval of this bill is earnestly sought. 
AN MIGUEL F. ZUBlRl 


I 
2 
3 
4 
5 
6 
7 
8 
9 
I O  
11 
12 
13 
14 
15 
16 
17 
18 
I9 
2 0 
21 
22 
FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
SENATE 
S. No. 2376 
Introduced by Senator JUAN MIGUEL F. ZUBlRl 
AN ACT 
GRANTING SOUTHEAST ASIAN AIRLINES (SEAir), INC. FRANCHISE TO 
ESTABLISH, OPERATE AND MAINTAIN DOMESTIC AND INTERNATIONAL AIR 
TRANSPORT SERVICES, WITH CLARKFIELD, PAMPANGA AS ITS BASE 
Be it enacted by the Senate and the House of Representatives OF the Philippines in 
Congress assembled: 
SECTION 1. Nature and Scope of Franchise. - Subject to the provisions of the 
Constitution and applicable laws, rules and regulations, there is hereby granted to 
Southeast Asian Airlines (SEAir), Inc.; hereunder referred to as the grantee, its 
successors or assigns, a franchise to establish, operate and maintain transport services 
for the carriage of passengers, mail, goods and property by air, both domestic and 
international. 
Air transport services shall include the maintenance and operation of hangars 
and aircraft service stations and facilities and other services of similar nature which may 
be necessary, convenient or useful as an auxiliary to aircraft transportation. 
The grantee shall have the right at its terminal and landing fields, as well as in its 
aircraft, to construct, operate and maintain stations or transmitting sets for wireless 
telegraphy and direction findings, and other radio aids to air navigation, using 
wavelengths in accordance with the rules and regulations made from time to tide by the 
proper agencies of the government. The wireless communication, facilities shall be used 
solely for receiving and transmitting weather forecasts and other matters in connection 
with the grantee's services. 
SEC.2. Civil Aeronautics Board (CAB). - The grantee shall secure from the CAB 
the appropriate permits and licenses for its operations. 
All aircraft used. by the grantee including their accessories and equipment shall at 
all times be air worthy and the crew members shall be licensed by the Government of 
the Philippines. They shall be equipped with radio communications, safety and other 
equipment and shall he operated and maintained in accordance with the regulations 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
I 1  
12 
13 
14 
15 
16 
17 
18 
I9 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
and technical requirements of the Civil Aviation Authority of the Philippines or such 
other regulatory bodies the government may prescribe for this purpose. 
The grantee's equipment and the operation of such equipment shall at all times 
be subject to inspection and regulation by the Civil Aviation Authority of the Philippines. 
The grantee shall comply with the provisions of Republic Act Numbered Seven 
hundred and seventy-six (R.A. No. 776), otherwise known as the "Civil Aeronautics Act 
of the Philippines", and the regulation promulgated thereunder from, time to time. 
SEC. 3. Responsibility to the Public. - Excepting cases of force majeure and 
whenever weather conditions permit, the grantee shall maintain scheduled and/or non- 
scheduled and/or chartered air transport services to any and all points and places 
throughout the Philippines and between the Philippines and other countries at such 
frequencies as traffic needs may require: Provided, however, That at least twenty-five 
percent (25%) of all its frequencies shall be for domestic market. 
SEC.4. 
Rates for Services. - The grantee shall fix just and reasonable rates for 
the transportation of passengers, mail, goods and freight, subject to the regulations arid 
approval of the CAB and other proper regulatory agencies of the government. 
SEC.5. Term of Franchise. - This franchise shall be for a term of twenty-five (25) 
years from the date of effectivity of this Act, unless sooner revoked or cancelled. This 
franchise shall be deemed ipso facto revoked in the event the grantee fails to comply 
with any of the following conditions: 
(a) Commence operations within one (1) year from the approval of its permit by 
the CAB; 
(b) Operate continuously for two (2) years; and 
(c) Commence operations within two (2) years from the effectivity of this Act. 
SEC. 6. Acceptance and Compliance. - Acceptance of this franchise shall be 
given in writing within sixty (60) days after the effectivity of this Act. Upon giving such 
acceptance, the grantee shall exercise the privileges granted under this Act. 
Nonacceptance shall render the franchise void. 
SEC. 7. Bond. - The grantee shall file a bond issued in favor of the CAB, which 
shall determine the amount, to guarantee the compliance with and fulfillment of the 
conditions under which this franchise is granted. If, after three (3) years from the date of 
the approval of its permit by the Board, the grantee shall have fulfilled the same, the 
bond shall be cancelled by the Board. Otherwise, the bond shall be forfeited in favor of 
the government and the franchise ipso facto revoked 
SEC.8. 
Landing facilities. - The grantee may use the landing and other airport 
facilities on land and water as may he maintained or owned by the government within 
the Philippines on the grantee's line subject to such terms and conditions, restrictions 
and national policy considerations as the Philippine Government may impose: Provided 
2 


1 
2 
3 
4 
5 
6 
7 
8 
9 
I O  
I1 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
3 0 
31 
32 
33 
34 
35 
36 
37 
That the Philippine Government shall have the right to use the landing and other airport 
facilities as may be maintained and owned by the grantee in the Philippines. 
SEC. 9. Contracts. - The grantee is authorized to enter into transportation 
contracts with the Philippine Government, including the carrying of mail, upon such 
terms and conditions as may be mutually agreed upon. The grantee shall give 
preferential consideration to contracts with the Philippine Government. The grantee may 
likewise enter into transportation maintenance and/or servicing contracts, and such 
other contracts relating to air transport with other foreign-owned airlines particularly with 
those which have international routes. 
SEC.lO. Right of Government. - A special right is hereby reserved to the 
President of the Philippines, in times of war, rebellion, public peril, calamity, emergency, 
disaster or disturbance of peace and order, to temporarily take over and operate the 
facilities or equipment of the grantee, to temporarily suspend the operation of any facility 
or equipment in the interest of the public safety, security and public welfare, or to 
authorize the temporary use and operation thereof by any agency of the government, 
upon due compensation to the grantee, for the use of said facilities or equipment during 
the period when they shall be so operated. 
SEC. 11. Warranty in Favor of the National and Local Governments. ._ The 
grantee shall hold the national, provincial, city and municipal governments of the 
Philippines harmless from all claims, accounts, demands or actions arising out of 
accidents or injuries, whether to property or to persons, caused by the operation of the 
services under the franchise hereby granted. 
SEC 12. Nontransferabilify of Franchise. - The grantee shall not lease, transfer, 
grant the usufruct of, sell nor assign this franchise or the rights and privileges acquired 
thereunder to any person, film, company, corporation or other commercial or legal 
entity, nor merge with any other corporation or entity, nor shall the controlling interest of 
the grantee be transferred, whether as a whole or in parts and whether simultaneously 
or contemporaneously, to any such person, firm, company, corporation or entity without 
the prior approval of the Congress of the Philippines. Any person or entity to which this 
franchise is sold, transferred or assigned, shall be subject to the same conditions, 
terms, restrictions and limitations of this Act. 
SEC. 13. Dispersal of Ownership - In accordance with the constitutional provision 
to encourage public participation in public utilities, the grantee shall offer at least thirty 
percent (30%) of its outstanding capital stock or a higher percentage that may hereafter 
be provided by law in any securities exchange in the Philippines within five (5) years 
from the commencement of its operations. Noncompliance therewith shall render the 
franchise ipso facto revoked. 
3 


I 
2 
3 
4 
5 
6 
I 
8 
9 
IO 
I 1  
12 
13 
14 
15 
16 
17 
18 
19 
SEC. 14. Reporbrial Requirement. - The grantee shall submit an annual report to 
the Congress of the Philippines on its compliance with the terms and conditions of the 
franchise and on its operations within sixty (60) days from the end of every year. 
SEC 15. Equality Clause. - In the event that any competing individual, 
partnership or corporation receives or enjoys or shall receive similar permit or franchise 
with terms, provisions and/or privileges more favorable than those herein granted or 
which tend to place the herein grantee at any disadvantage, then such terms and/or 
provisions shall be deemed part hereof and shall operate equally in favor of the herein 
grantee. 
held invalid, all other provisions not affected thereby shall remain valid. 
SEC. 16. Separability Clause - If any of the.sections or provisions of this Act is 
SEC. 17. Repealability and Nonexclusivity Clause. - This franchise shall he 
subject to amendment, alteration or repeal by the Congress of the Philippines when the 
public interest so requires and shall not he interpreted as an exclusive grant of the 
privileges herein provided for. 
SEC. 18. Effectivity Clause. - This Act shall take effect fifteen (15) days from the 
date of its publication, upon the initiative of the grantee, in at least two (2) newspapers 
of general circulation in the Philippines. 
Approved,. 
4