SEAir Expands in Domestic Filipino Skies

Filipino carrier Southeast Asian Airlines (SEAir) is to expand its domestic offering from the end of July as it begins to introduce additional short-haul aircraft into its fleet as part of its restructuring under the business model of its new shareholder Tiger Airways. The carrier currently operates two Airbus A319s but will acquire three larger A320s during the current financial year to expand its domestic and international network.

“The Philippines is a large country with more than 7,000 islands and a population of over 90 million, not including the 11 million working and living abroad. There is enormous potential to develop the domestic and international air travel,” said Chin Yau, Chief Executive Officer, Tiger Airways which subject to final approval controls a 40 per cent share of the Filipino venture.

SEAir plans to launch services on seven new domestic routes from Manila with links to Cebu, Tacloban, Iloilo, Puerto Princesa, Kalibo, Davao and Bacolod. These flights will be operated on an at least daily schedule with Cebu seeing three daily rotations and Davao two flights per day. As the table below shows, all these links are already well served by local operators with Airphil Express, Cebu Pacific Air, Philippine Airlines and Zestair serving all seven routes.

The new domestic schedules were uploaded to the GDS just days after Asian low-cost venture Tiger Airways finalised its agreement to acquire a 40 per cent stake in the carrier. The budget operator plans to develop SEAir into a pan-Asian network that can leverage upon its own established operations in Singapore and Australia. In a formal statement Tiger Airways said it regards SEAir as an opportunity “to provide affordable low-cost air travel for the domestic and international traveller into and from the Philippines, and to contribute to the economic growth of the country.”

Through its wholly-owned purchase vehicle Roar Aviation II, Tiger Airways is acquiring 55,000 Common A shares and 145,000 Common B shares in the issued share capital of SEAir from shareholders Iren Dornier and Nick Gitsis for a reported $7 million, less liabilities. The deal has been under discussion for the past couple of years after the airline’s entered into a partner airline agreement for SEAir to fly two leased Tiger A319s from the Filipino market.

The investment in SEAir is Tiger’s second such joint venture in Asia with Tiger already acquiring a 33 per cent stake in Mandala Airlines in Indonesia in January 2012. “We will continue to seek opportunities to extend the Tiger reach in Asia Pacific,” said Mr Chin. “Asia is one of the fastest growing areas in air travel and we intend to play a major role in driving that growth.”