Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

Sixteenth Congress

First Regular Session

House BILLNO. 3485

Introduced by Representative ELEANDRO JESUS F. MADRONA

EXPLANATORY NOTE

This Bill seeks to grant the Southeast Asian Airlines International, Inc. (SEAIR
INTERNATIONAL) a franchise to establish, operate and maintain domestic and international air

transport services,

The SEAIR Intemational, Inc. is a stock corporation incorporated under the laws of the
Republic of the Philippines with the primary purpose to engage in the business of air
transportation and related activities in all their aspects, including the operation of any aircraft of
any kind and description, including airplanes and helicopters, owned or lease or acquired in any
manner, for the carriage of passengers, cargo, freight and mail or all kinds and nature
whatsoever; for itself or for others, scheduled or non-scheduled, within and outside the

Philippines; to build, operate and maintain facilities for its operation.

SEAIR International is a separate and distinct airline that sprung from the leisure airline
services of SEAIR, Inc. an airline that has now been converted into a low-cost carrier and

rebranded into Tiger Air Philippines.

In SEAIR International’s 5-Year Development Plan, it will service scheduled and

chartered flights both local and international destinations.

SEAIR International will take over the leisure and pioneer routes of SEAIR, Inc. which is
now concentrating on low-cost operations as a budget carrier purely utilizing Airbus aircraft for

its operations. As such, SEAIR International intends to continue SEAIR, Inc.’s 16-year service


on leisure destinations such as Caticlan and Basco, among others, and as well as missionary

destinations like inter-Palawan where bigger commercial planes cannot operate.

SEAIR International will serve public convenience and necessity as it will continue to
provide the country and the riding public’s much needed services to secondary routes which
include not only exotic tourist destinations but more importantly missionary routes where none

or only few airlines operate and invest on, This will pave way to the development of tourism by

pioneering new and exciting destinations, In fact, it envisions to be the Philippines’ Premium

Leisure Airline.

‘Thus, the approval of this Bill is earnestly sought

Pa a

ELEANDRO JESUS F. MADRONA



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Sixteenth Congress

First Regular Session

HOUSE BILL NO. 8485

Introduced by Representative ELEANDRO JESUS F. MADRONA

AN ACT
GRANTING THE SOUTHEAST ASIAN AIRLINES INTERNATIONAL, INC. (SEAIR
INTERNATIONAL) A FRANCHISE TO ESTABLISH, OPERATE AND MAINTAIN
DOMESTIC AND INTERNATIONAL AIR TRANSPORT SERVIC

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 International, 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 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 time 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/ Civil Aviation Authority of the Philippines. — The
grantee shall secure from the Civil Aeronautics Board (CAB) and the Civil Aviation Authority of
the Philippines (CAAP) the appropriate permits and licenses for its operations. The CAB and
CAAP, however, shall not unreasonably withhold or delay the grant of any such authority.

All aircraft used by the grantee including their accessories and equipment shall at all

times be airworthy and the crew members shall be licensed by the Government of the


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Philippines. They shall be equipped with radio communications, safety and other equipment and
shall be operated and maintained in accordance with the regulations and technical requirements
of the CAAP 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 CAP.

‘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 regulations 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

s to any and all points and places throughout the Philippines and

chartered air transport servi
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 and approval of
the CAB and other proper regulatory agencies of the government.

SEC

years from date of effectivity of this Act, unless sooner revoked or cancelled.

Term of Franchise. - This franchise shall be for a period of twenty-five (25)

his 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 operating permit
by the CAB;

(b) Commence operations within two (2) years from the effe

ity of this Act; and

(c) Operate continuously for two (2) years.

SEC. 6. Acceptance and Compliance. — Acceptance of this franchise shall be given
in writing within sixty (60) days from the effectivity of this Act. Upon giving such acceptance,
the grantee shall exercise the privileges granted under this Act. Non-acceptance shall render the
franchise void.

SEC. 7. Bond. ~The grantee shall file a bond issued in favour of the CAB, which shall
determine the amount, to guarantee compliance with and fulfilment 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 be maintained or owned by the government within the


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Philippines on the grantee’s line subject to such terms and conditions, restrictions and national
policy consideration as the Philippine government may impose: Provided, That the Philippine
government shall have the right to use the landing and other airport facilities as may be
maintained or 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 mutual 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 local and
foreign-owned airlines particularly with those which have international routes.

SEC. 10, Right of Government.

the Philippines, in times of war, rebellion, public peril, calamity, emergency, disaster or

A special right is hereby reserved to the President of

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
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 a s, whether to

dents or injuri

property or to persons, caused by the operation of the services under the franchise hereby
granted.

SEC. 12, Sale, Lease, Transfer, Usufruct, Assignment. ~ The grantee shall not lease,
transfer, grant the usuftuct of, sell nor assign this franchise or the rights and privilege acquired
thereunder to any person, firm, 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 Congress of

the Philippines: Provided, That Congress shall be informed of any lease, transfer, granting the
usufruct of, sale or assignment of franchise or the rights or privileges acquired within sixty (60)
days after the completion of said transactions; Provided, further, That failure to report to

Congress of such change of ownership shall render the franchise ipso facto revoked; Provided.

finally, That any person or entity to which this franchise is sold, transferred or ass igned, shall be
subject to the same conditions, terms, restrictions and limitations of this Act.
SEC. 13. Dispersal of Ownership

encourage public participation in public utilities, the grantee shall offer to Filipino citizens at

In accordance with the constitutional provision to

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. Non-compliance therewith shall render the franchise
ipso facto revoked.

SEC. 14, 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 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,

SEC. 15. Reportorial Requirement. - ‘The grantee shall submit an annual report to the

Congress of the Philippines through the Committee on Legislative Franchises of the House of

Representatives and the Committee on Public Services of the Senate,

on its compliance with the
terms and conditions of the franchise and on its operations within ninety (90) days from the end
of every year.

SI

16. Separability Clause. ~ If any of the sections or provisions of this Act is held
invalid, all other provisions not affected thereby shall remain valid.

SEC. 17. Repealability and Non-Exelusivity Clause, ~ This franchise shall be subject to
‘amendment, alteration, or repeal by the Congress of the Philippines when the public interest so
requires and shall not be interpreted as an exclusive grant of the privileges herein provided for.

SEC. 18. Effectivit 's Act shalll take effect fifteen (15) days from the date of

Clause.

its publication in at least two (2) newspapers of general circulation in the Philippines.

Approved,