Wednesday, August 29, 2012

Seair International eyes long-haul flights, looks for partners

MANILA, Philippines - A spun-off unit of South East Asian Airlines (Seair) is in talks with potential partners as it looks to fly to long-haul destinations in the future.

Seair International (Seair I) wants to fly to the United States, Middle East and Europe in the long term, said one of its owners, Greek-American Nick Gitsis.

“For our international component, we are looking for the right opportunity to fly there. But it's not going to happen tomorrow. Let’s see in a couple of years. That’s what we intend to do.”

Seair I is a spun-off unit of Seair. It will take over Seair's so-called missionary routes - a market shunned by the big local players, which fly to main destinations like Manila, Cebu and Davao.

Seair I, headed by former Seair president Avelino Zapanta, is awaiting the issuance of its Air Operator Certificate by regulators. It is eyeing a commercial launch by the final quarter of 2012.

The company's plan to fly overseas requires a bigger fleet, which, in turn, calls for huge funds.

"We do need bigger airplanes to fly to US, Middle East and Europe. That's why we need partners. The plan right now is all under study. Nothing is concrete. It's a big venture so we are looking for the right partners," Gitsis said.

“At this time we've talked to a couple of people, both international and local…It depends on what kind of partnership they have to offer, whether it's a lease in aircraft or they want to come in and take a stake, we are flexible,” he added.

Getting new investors has been a trend in the capital-intensive aviation industry.

Seair and legacy airline Philippine Airlines (PAL), for example, struck deals with investors to help finance their refleeting and modernization programs. Another player, AirAsia Philippines, is backed by regional low-cost carrier AirAsia Berhad.

Seair owners sold 40% of the company to Singapore's budget carrier Tiger Airways for $2.5 million. PAL, on the other hand, sold a 49% stake to conglomerate San Miguel Corp for $500 million.

Over the near term, Gitsis said Seair I will focus on expanding local routes.
Seair I currently has 3 Dornier 328s and one LET 410UVP-Es - small aircraft that fly only to destinations where big commercial planes cannot land. These destinations include Batanes and Palawan.

Gitsis said Seair I will purchase two more LET aircraft next year to be able to service more of these destinations.

“We plan to expand the fleet and position the aircraft to service missionary destinations like inter-Palawan, including Puerto Princesa-El Nido, Busuanga, Puerto Princesa-Taytay, Puerto Princesa-Cuyo, among others. We will keep Batanes and also focus on Palawan,” he said.

Long-haul challenges

Among local players, only PAL currently flies to long-haul destinations such as Vancouver, Las Vegas, San Francisco and Los Angeles in the US.

It had flown to Europe, but stopped its services there. PAL wants to launch long-haul flights to Toronto and New York soon.

Another player, budget carrier Cebu Pacific, will also start long-haul flights by 2013. It is primarily targeting routes in the Middle East, but also wants to serve US and Europe.

Their plans, like Seair's, face regulatory challenges however.

No Philippine carriers are allowed to mount new flights to any US destinations on top of exisiting ones since the Federal Aviation Regulation (FAA) has yet to lift its Category 2 rating on its Philippine counterpart.

The Category 2 was imposed on the Civil Aviation Authority of the Philippines (CAAP) for failing to meet international aviation safety standards.

The European Union followed FAA's verdict on CAAP and banned Philippine carriers from mounting flights to any European destinations. -


No comments:

Post a Comment

Note: Only a member of this blog may post a comment.