Seair International cleared for takeoff

MANILA, Philippines – The Civil Aviation Authority of the Philippines (CAAP) has finally given Seair International (Seair-I) the green light for its flight operations beginning this month. 

The company’s Vice Chairman Nikos Gitsis said in an interview Seair-I is launching its maiden flight from Manila to Basco, Batanes on December 7. 

“The plan is, we will fly Fridays and Mondays and we will go from there. It could become three times a week,” he said. The carrier will use a 32-seater Dornier 328 turboprop for this service. 

He said the carrier will also offer a “VIP charter service early next year for domestic and international routes” using a seven-seater Falcon 10 jet. 

“[Apart from the scheduled Basco flights] we will focus on charters for the time being, and we will explore and open up new destinations,” Gitsis added (Read the rest at InterAksyon.com. This piece was originally published on Dec. 2, 2012.)

Seair takes ‘more fun’ to the skies

Seair flight DG7792 (registered as RP-C6320) taxis toward the Budget Terminal of the Changi International Airport in Singapore, after arriving from Clark, Pampanga. Seair operates a once daily flight between Clark and Singapore. This aircraft was delivered to the airline just over a month ago as part of its partnership agreement with Singapore-based budget carrier Tiger Airways. This is one of the two Airbus A320-232s which sports the Philippines’s new tourism slogan “It‘s More Fun in the Philippines,” and is a way for the carrier to help promote the country as a key destination in Asia, officials said. (Photo courtesy Andre Giam/Jetphotos.net)

NOT only is it more fun in the Philippines, but apparently, it’s also more fun to fly one local carrier, as well.

Two Airbus A320-232s of Southeast Asian Airlines are now sporting the “It’s More Fun in the Philippines” slogan, an initiative of the carrier to help promote the country as a key destination in Asia.

A photo of one of the planes repainted with the slogan and taxiing on the runway of the Changi International Airport in Singapore has been making the rounds of the Internet via the Facebook account of Tourism Paradise Philippines, a local travel guide web site.

Nikos Gitsis, Seair co-founder and incumbent vice chairman of the board, confirmed to the BusinessMirror the new livery on the carrier’s planes. “Two of our new Airbus A320s assigned to the international routes [are sporting the slogan]. Those two are doing the Singapore-Hong Kong-Bangkok-Kota Kinabalu routes [from Clark International Airport in Pampanga].”

Gitsis even reposted the “fun” plane photo on his Facebook wall on August 7, 2012, captioning it thus, “Seair is [a] pioneer in many ways—This is another first for us!” He disclosed that he hasn’t actually seen the planes yet because they’re in Clark. The A320s were leased from Tiger Airways Inc., which had purchased a 32.5-percent stake in Seair in February 2011 for $6 million. The Singapore-based low-cost carrier plans to raise its stake in Seair to 40 percent, paying up an additional $7 million for the additional shares. (See, “Tiger Airways eyes bigger pie of local carrier Seair,” in the BusinessMirror, April 18, 2012.)

“It’s been 17 years in the making,” said Gitsis about the carrier’s “long amazing struggle” in the local aviation industry. “But when I saw that pic [of the repainted plane], it all makes sense.” Established in 1995, Seair is a pioneer in the local airline industry, one of the first to fly to Caticlan, Aklan, the gateway to Boracay Island, and other missionary routes that had been earlier abandoned by Philippine Airlines.

(Nikos Gitsis, co-founder of Seair)

For his part, Tourism Assistant Secretary Eugene Kaw disclosed it was Seair “which came up with the idea [of using the slogan for its plane], and approached us.”

He said the Seair team met with DOT officials regarding the proposed use of the slogan “some three to four weeks ago…. They’re going to do it for free and DOT agreed, on a non-exclusive basis.”

By “non-exclusive,” this means other local carriers such as PAL, Cebu Pacific, and Zest Airways can use the slogan on their respective planes as well, if they also make a request to the tourism agency.

Kaw explained that Seair “shouldered the cost of the painting. No charge to DOT also for the placement,” adding that “it will be for an international flight as per our discussion. ”

He added that Seair had actually planned to use the old DOT slogan hatched under the term of former Tourism Secretary Alberto Lim, but this was eventually scrapped after the slogan was ditched following massive outcry from tourism stakeholders. “They’ve [Seair] allotted the space for it since ‘Pilipinas Kay Ganda’, but got deferred,” Kaw disclosed.

Meanwhile, the photo of the Seair plane sporting the “fun” slogan used by Tourism Paradise and Gitsis was taken from Jetphotos.net, a photo web site dedicated to aviation enthusiasts. The plane photo was captured by Andre Giam, a member of the Ninervictor Spotting Group, a group of aviation enthusiasts in Singapore.

In his caption of the plane photo posted on Jetphotos.net on August 5, 2012, Giam said: “DG7792 taxiing toward the [Changi] Budget Terminal after arriving from Clark. Seair, based in the Philippines, operates a once-daily flight between Clark and Singapore. This aircraft was delivered to the airline just over a month ago (leased from Singapore based carrier—Tiger Airways). First photo of Seair’s A320 in the database. Last but not least, this particular aircraft carries a special quote in order to promote Philippines as a ‘better’ holiday destination among the Southeast Asian countries, which says ‘It’s More Fun in the Philippines.’”

As per the photo, the plane sports a registration number of RP-C6320, with Serial Number CN 5194.

With its strategic partnership with Tiger Airways, Seair is currently expanding its network domestically and internationally. It recently acquired, via lease, from Tiger two A319-200s and three A320-232s. The carrier is targeting to fly 2 million passengers to its international destinations this year.

(UPDATE:) The Seair plane sporting the logo was inaugurated this Sunday morning, Aug. 19th, after the inaugural flight of the carrier from Manila to Davao. On hand was DOT Secretary Ramon Jimenez Jr. Will post the photos once they're in.

(My piece was originally published in the Aug. 14th, 2012 issue of the BusinessMirror. Photo of Nikos Gitsis from Routes News.)

More Yuletide thoughts

CONTINUING from my column on December 24, here are the favorite or unforgettable Christmas gifts of several of our friends:

Rina Lopez-Bautista, President, Knowledge Channel Foundation Inc.

About six years ago, I received a Holy Bible. What made this gift special was that it was given to me by my friend who is a Muslim Datu. He had promised to help a Christian lady distribute 1 million Bibles.

With the Holy Bible, he included pages of yellow highlighted passages from the Holy Koran which he believed bore similarity to that of the Christian faith.

His hope was that one day we could all focus on our similarities rather than our differences and create lasting peace. Although he had achieved it in his hometown in Maguindanao, his hope was that one day peace would reign in the rest of the Autonomous Region in Muslim Mindanao.

My friend has passed away since, but his dreams and aspirations will one day be fulfilled by his children and others like him who continue to wage peace.

Nikos Gitsis, Director and co-founder of Southeast Asian Airlines

When I first came to the Philippines, I left New York on December 24, 1994, and arrived in Manila on December 26. Due to the time change, I lost Christmas that year. But looking back, I was given my chance to realize my childhood dream on that Christmas-less year—to become a pilot and own an airline, and it was offered to me by the Philippines. Happily, I can say that I accepted. It is because of this I owe the realization of my dream to the country that I have made my home now.

Claire Yap, Senior vice president-head of the Global Service Centre, Global Payments

I belong to the Vedruna Foundation where there are diverse communities of children centers that we support with educational and feeding programs and spiritual enrichment from funds raised through individual donations and contributions by the largest Catholic parish in Tokyo, St. Ignatius Parish Church.

Our simple gifts for these children in the yearly Christmas parties—from way south in the Philippines like with the Manobos in Cotabato, to the Pangarap Children’s Centers in Quezon City and the abandoned children at Tahanan Vedruna in Tagaytay—are greatly anticipated and are filled with games, music and surprises.

The mere sight of the happy faces of children who receive our full attention for the day tops my list of the best Christmas presents I get blessed with every year.

Olivia Limpe-Aw, President, Destileria Limtuaco

I can’t really choose one favorite or unforgettable gift. For me the most memorable gifts I receive are always from those who took the time to think about what to give, gave the time and put in the effort to make me happy, delighted, or even to surprise me.

So in a way, it really is the thought that counts but the effort to make it happen is what makes it even more meaningful and unforgettable.

Philippe Bartholomi, General manager, Century Park Hotel

My favorite Christmas gift as a little boy was my first Formula 1 and Rally cars electric racetrack which was given by my parents when I was around 8 or 9 years old. Another unforgettable gift was when my parents visited me and were around during the Christmas season, the first time was in 2007, when I was still managing a hotel in Boracay. We had a wonderful Christmas Eve dinner and big New Year’s Eve bash on the beach. The second time was in 2008 when I was back here in Manila at Century Park Hotel. Their presence really meant a lot to me and it was the best gift ever.

Jocelyn Chua, Proprietor, French Dolls

The best Christmas gift I received was a Rolex watch from my husband Al during our first year of marriage. It’s not the material thing, but the thought/gesture and the love that came with the gift. It was touching because instead of buying something nice for himself, he thought of me first.

Happy New Year people! Thank you for continuing to read my blog. Wishing you all the best in 2011!

(My column, Something Like Life, is published every Friday in the Life section of the BusinessMirror. Photos provided by the interviewees.)

Caticlan monopoly may ease Seair’s revenue losses

So despite the drop in passenger traffic in the first five months of the year, Zapanta said its revenues only dipped by 18 percent. “At the onset of 2009, while the other airlines continued to bleed, Seair has stopped the bleeding. We are happy to even have just a slim margin for the whole, but with the new development in Caticlan, we will have to revisit the plans for the rest of the year.” (Click Caticlan monopoly for the rest.)

(Blogger's note: In the statement, "Lean, mean and small is our aim through the current business climate we are experiencing, and awaiting opportunities as they come to assess how we move," the quote was attributed by our editor to Seair president Avelino Zapanta, but actually it was said by Seair co-founder and director Nikos Gitsis. Apologies to both gentlemen.)

(Boracay-bound passengers board a Seair DO-328 for a flight to Caticlan.)

Just for the record...

Nikos Gitsis, co-owner of Seair, just wants everyone to know that it was Seair owner Iren Dornier and he who first splashed their plane into the Hudson River. Been there, done that. Belat to you Sully!

And Nick has the photos to prove it!

(Flying near the Statue of Liberty)

(Landing in the Hudson River)
Twitter that Janis Krums!

In all seriousness though, the conditions under which Dornier and Nick landed their plane in the Hudson, were very much different than that of United Airways Flight 1549 of course. It was a much happier occasion as it was part of the World Tour of the DO-24ATT, an old seaplane built by Dornier's grandfather Claude Dornier (yes, yes, the aviation engineer/designer for Germany's Luftwaffe) and restored by Iren in 2003. The tour was meant to raise funds for UNICEF's programs on child education and lasted from 2005-2007.

Btw, the seaplane (if you look closely, it is actually registered in the Philippines) did land in the Hudson River in Aug. 2005, according to old press reports. Hmmm...I wonder if Nick and Iren will get their own Facebook fanpage now.

* * * *
In a related note, Miracle on the Hudson hero Capt. Chesley "Sully" Sullenberger III and his crew of five, as well as their families, have been invited to participate in the Miracle in Washington DC, i.e. the inaugural ceremony for U.S. President-elect Barack Obama. (Matt Lauer of NBC's Today show is said to have snagged the first press interview of Capt. Sullenberger supposedly today. Hopefully, it will be shown on local cable TV (Ch. 19) this morning.)

Gads! This is soooo exciting! I'm so looking forward to watching the inaugural ceremony later. I believe the telecasts on CNN and the BBC begin at 6 pm. I can't wait 'til George Bush goes bye-bye! What was that old Dick Van Patten show on Ch. 7 back in the day? Ah yes, EIGHT IS ENOUGH!

Right now, I'm channel surfing as all the U.S. TV networks' morning shows are broadcasting from DC near the venue of the event. Our own Jessica Soho (GMA7) and Charrie Villa (ABS-CBN) are also supposedly covering the ceremony, although I dunno how close they can get in their coverage. But sana it will be live and not just a phone patch like one local TV network did during the November election in the U.S.

(Btw, did anyone watch the reruns of Soho's old interview w/ Cristeta Comerford, the executive chef at the White House? Chef Cris kinda looked masungit and impatient in answering Soho's questions. I wonder if she got bitten by the old fly-on-the-carabao bug. Tsk, tsk.)

Roaches attack Zest Air passengers...eeew!

LAST week I received an email w/c apparently has been making the rounds of several friends in the tourism business and email groups. I am publishing it to warn travelers about the hazards of riding on Zest Airways (formerly Asian Spirit), which in the past, I've written about because they flew w/o any insurance. I forwarded the same email to Butch Rodriguez, the carrier's VP for Commercial Affairs and official spokesman, but have not received any reaction to email writer Ms. Polintan's concerns.

Gee, Seair's Nikos Gitsis must be thanking his lucky stars he didn't accept the buy-out offer of Zest Airways' Alfredo Yao.

Here's the email:

On Tue, 11/25/08, Marge Polintan <******@yahoo.com> wrote:

Customer Relations/ZEST AIR:

We are a party of 17 (15 adults and 2 minors) who all took the Manila-Caticlan on Nov. 22 and returned to Manila on Nov. 24 via Kalibo-Manila when our return flight was diverted from Caticlan to Kalibo.

We checked in all 17 of us at Caticlan about 4:10PM only to be told that we have to motor to Kalibo as our flight was diverted. When we asked why, we were given the most stupid reasons that only a moron can accept. Your MR. RODEL URGUELLES informed us that the plane could not take off as sunset was at 5:20. (1) Our flight was supposed to leave at 5:00PM so clearly we would have been up in the sky when sunset was supposedly setting in. (2) Another stupid reason given to us was that the Caticlan airport had no runway lights making it impossible for us to take off!!!! Why in heaven's name do you schedule late afternoon flights knowing that the Caticlan airport is not fitted with lights (I seriously doubt if is this is true). (3) We also asked why we were not contacted to let us know that they were moving our flight earlier. They were able to contact us before we left Manila that our departure was moved to an earlier time. (4) We informed your Mr Urguelles that we had a pregnant lady in our party and were concerned about the long trip from Caticlan to Kalibo. We were asking for a guarantee that should she suffer a miscarriage, the airline will be made answerable for it. Of course he could not give any guarantee. Having no choice we took the risk and motored to Kalibo for a good one hour motor ride. Upon reaching Kalibo, we found out that two other Zest Air flights were likewise diverted. We were made to wait some more as the planes coming from Manila were delayed. I surmised that this was the main reason why our flights were moved from Caticlan to Kalibo.

We were finally herded to an airplane for our flight to Manila. With grumbling stomachs and exhausted from the trip from Caticlan, we had to make our way inside the airplane in darkness. When we asked the flight attendant why there were NO cabin lights, we got another STUPID response and were informed that they are conserving energy and therefore we have to grope for our seats in darkness without any airconditioning. Madilim na Mainit pa!!!!!! What would have been a one hour flight seemed like an eternity as it took us about an hour and a half to reach Manila in darkness.

Having undergone all these nerve wracking experience what was more irritating apart from the stupidity of your staff is the fact that they did not even offer any apology for all the inconvenience we were experiencing. I think you should all go back to school and take courses on basics of good manners, effective management and people skills. Your staff is sorely lacking in all of these!!!!!!

This is our first and last time we are flying ZEST AIR. You can be assured that the 17 of us will be your worst advertisement and will make it a point to inform all our friends and other concerned agencies.

Passengers
MARGARITA S. POLINTAN
LUIS MANUEL S. POLINTAM N
MIA MARGARITA S. POLINTAN
JOSEFINA S CRISTOBAL
MARIANO CRISTOBAL III
RIZZA JOIE CRISTOBAL
EMMANUEL UBIADAS
CATHERINE UBIADAS
GABRILLE ERIN UBIADAS (Minor)
VIRGINIA AGALOOS
BERNARDO AGALOOS III
AILEEN AGALOOS
RACHEL EUSTAQUIO
BERNADETTE NEWELL
ZANDRA NEWELL
ANDREW NEWELL (Minor)
TIMOTHY BLANK

AFTER two weeks, below is the response of Zest Air's Customer relations department. Geez, not even a personal call to apologize to Ms. Polintan? No offer of a comp hassle-free trip next time? How totally lacking in respect for their passengers. Tsk, tsk.

From: Customer relations
To: Marge Polintan <****** @yahoo.com>
Sent: Wednesday, December 3, 2008 3:53:54 PM
Subject: Re: [stcqchs'65] Fw: ZEST AIR/ASIAN SPIRIT NEVER AGAIN-A HARROWING EXPERIENCE

Mam,

I apologize for the inconvenience and have noted your concerns and complaints, the old planes will be grounded and 5 new planes will be in placed.

Best regards

NOW I know Rodel Arguelles, who has been Asian Spirit's Caticlan station manager for the longest time. I've never had a problem w/ him. He has been one of the more efficient employees I know in Asian Spirit. So I'm not so sure what has happened to him. Could be a reflection in the change of management style and their policies.

And yaaak! Ipis! I've also heard that the planes' toilets are not cleaned well. Plain soap and water are used instead of that blue toilet-duck product. So Zest Air management would rather cut expenses that make sure their passengers are safe from health risks huh? Sweet.

There was a time when Asian Spirit was one of the best and most efficient budget carriers in the country. Now that it's been transformed to Zest Air, it is just sh**. Sad.

Seair revives talks with investors

(I've been on vacation so this is another lazy post...a story I wrote for BusinessMirror for its May 9/10 issue.)

SOUTHEAST Asian Airlines (Seair) is reviving talks with international investors following the rejection of a purchase offer by the group of industrialist Alfredo M. Yao. Yao is the founder of Zest-O Corp.

A highly-placed source from the local carrier told BusinessMirror “these talks were stalled when we thought we were already going to have a deal with Yao by June. So we’re just reviving them.”

The source declined to identify the foreign groups only saying that these were “from Singapore and Brunei,” for possible “capital infusion” into the local carrier.

Seair owners headed by co-founders Iren Dornier, Nikos Gitsis and the Filipino group led by marketing guru Tomas B. Lopez Jr., declined the offer by Yao to purchase their shares for $2 million (or P84.63 million). This was $1.75 million (P74 million) lower than the “original consensus price” of $3.75 million (P159 million), before Yao’s group conducted due diligence on the airline.

Yao said he still intends to pursue the purchase of the carrier.

Sources familiar with the matter said the $2-million offered by Yao’s group will only pay for the cost of the brand and takeover of employees. The group does not intend to buy the 10 aircraft Seair is currently leasing from Dornier’s Aviation Enterprise Inc. (AEI) and spare parts. Yao’s group will also not cover the debts of the carrier including the payables on the aircraft leases to AEI. “All of the liabilities of Seair will have to be paid by Gitsis [and company],” the sources added.

In the proposed share purchase agreement, “[Yao’s group] will lease aircraft from AEI on a “power-by-the-hour” basis, the same sources added. This means that Yao’s group will pay only for the actual use of the leased aircraft, even if these are parked in the airline’s hangar. With this commitment to lease AEI’s planes, “it’s like the offer price is still the same as what we had initially discussed,” explained another source from the Yao group.

There is also a non-compete clause in the proposed share purchase agreement between Yao and Seair shareholders. This means that Dornier and Gitsis, who are both pilots and who currently own 40 percent of Seair, cannot put up another carrier to compete with Yao’s airline.

BusinessMirror sources observed that “this clause was not present in the initial agreement between Yao and Asian Spirit’s former owners.” Yao said he intends to merge Asian Spirit and Seair into one airline company.

Yao bought Asian Spirit for about P1 billion but turned over a check amounting to only P700 million because his group was taking over the debts and liabilities of the airline.

In an earlier interview, Gitsis said Seair was “open to all possibilities” in terms of investments either through capital infusion or selling the owners’ shares “lock, stock and barrel.”

“We’re still open to selling [even just the shares owned by the foreign group]. In the long run, the airline needs partners that can help in [our] growth, to keep us up with the growth opportunities that are still open in the market,” he said.

Referring specifically to the negotiations with Yao, Gitsis said: “If the need for capital and aircraft is the main motivator, [we] don’t want to sell out. Our hearts are in the company and we are more than willing to stay, and more than willing to work another 13 years. [Dornier and I] love this country and we no longer consider ourselves foreigners. On the other hand, everything has a price in business.”

He said the airline sees massive potential growth in local tourism “and we can contribute to that in many ways.” But he said he hoped the Civil Aeronautics Board (CAB) would allow the airline to do just that by approving its lease purchase agreement with Tiger Airways.

In January 2007, Seair signed a lease purchase agreement with Tiger Air, the low-cost carrier subsidiary of Singapore Airlines. The deal was for the lease of two Airbus 320s from the regional carrier which would enable Seair to fly to Singapore and Macau, as well as other Asian destinations. Local carriers have opposed the agreement saying the partnership would give fifth-freedom rights to Tiger Air, thereby allowing it to transport passengers to a second country and onwards to a third country.

Due to opposition by local carriers, the CAB has yet to approve the agreement, preventing Seair’s efforts to expand its routes to international destinations using the Clark International Airport as a regional hub.

“Tiger Air gave us a challenge. We thought we could live up to the challenge and we’re still optimistic that we can overcome that challenge,” said Gitsis. He admitted that the regional carrier has also expressed interest in buying into Seair, “but we [foreign shareholders] would have to sell out.”

- - - -

P.S. I flew to Caticlan and back to Manila over the weekend via Seair and noticed that the drinks served to passengers were made by Zest-O. Hmmm...

Seair ‘rejects’ Yao offer, but talks ‘active’

(Seair owners: Iren Dornier, Nikos Gitsis, and Tomas B. Lopez Jr. representing Filipino shareholders. Photos of Dornier/Gitsis from the Iren Dornier Project. Photo of Lopez from AIM.)


THE owners of Southeast Asian Airlines (Seair) said they have rejected the offer of industrialist Alfredo M. Yao to purchase the airline, but the fruit-juice king’s camp stressed the two sides are still “actively talking.”

A highly placed source in the carrier told the BusinessMirror: “The deal is off. The offer is $2 million. [It's] too low from the original consensus price [between the owners and Yao’s group].”

Contacted for comment, Yao said, “Their group and ours are still talking. Nick [Gitsis, co-founder and director of the carrier] is still in the States, so we haven’t spoken to each other.”

While Yao did not wish to confirm how much his group’s offer price was, the Seair source said the owners had agreed to sell their shares to Yao at $3.75 million (or roughly P158 million at P42.315 to the dollar).

The price only covers the cost of the airline brand and the takeover of the staff, but not the planes. The 10-plane fleet of Seair — composed of three Dornier 328s and seven LET-410s — are turboprops currently leased from Aviation Enterprise Inc., a company owned by Seair founder Iren Dornier.

The source added that the notice to formally reject the deal has already been transmitted to Yao’s group.

Yao is widely known for having developed the fruit-juice drinks under the Zest-O brand, now the largest-selling ready-to-drink fruit-juice brand in the country. His recent purchase of Asian Spirit boosts his interests in the tourism sector, where he also owns a hotel in Subic Bay. (See my profile interview of Yao in the blog entry below.)

Despite the rejection of Yao’s offer, the Seair source was confident that the airline would continue operating. “We have a good safety record. We are No. 1 in our market.” He added that Dornier will continue to infuse capital in the airline even if the local shareholders won’t.

Gitsis earlier said a deal with Yao’s group could be announced before the end of June. (See “Yao bucks tide, may buy 2nd airline,” BusinessMirror, April 14.) The two parties have been negotiating Seair’s purchase since July 2007.

(Industrialist Fred Yao)

Meanwhile, aviation analysts who requested anonymity said that with Yao’s recent purchase of Asian Spirit, he doesn’t need to purchase another carrier. “He has his own airline already, with its own staff and planes.

Both of them [Seair and Asian Spirit] serve almost the same markets, so he [Yao] really doesn’t need another airline.” The analysts added that unlike Asian Spirit, Seair does not have a congressional franchise and is not a designated flag carrier.

A source in Yao’s group confirmed this. “Strictly speaking, we don’t need them [Seair]. It’s not imperative that we buy them. But we can learn from their expertise and benefit from their niche marketing.”

Yao has already successfully lured Seair’s operations manager, Eli Tabora, to join Asian Spirit, but is still keen on recruiting Avelino Zapanta, current president of Seair and former president of Philippine Airlines, to be head of a merged airline company. Yao’s group is also impressed with the marketing savvy of Patrick Tan, Seair’s vice president for commercial affairs.

Despite the rejection of the offer, a source in Yao’s group said the businessman is still pursuing his plan to buy Seair. “The upside for us buying Seair is, they have good people, and we can do single administration [of routes and ticketing], and let’s face it, they have a good reputation in the niche market they are serving. The downside to us, of course, is there is a cost to all of that.”

The source stressed that both groups are still “actively talking. There are just some areas of confusion [with regard to the offer price]. I think it just wasn’t explained to them very well why the offer is such. They may have interpreted it differently.”

While he declined to go into specifics, he noted that since Seair’s planes are not included in the purchase price, “why should we pay for the spare parts? But essentially, our offer to them is still the same.” Other sources said the carrier also has debts which are going to be taken over by Yao’s group.

This was essentially the same tactic Yao used in taking over Asian Spirit. While the purchase price for that carrier was P1 billion, the actual check turned over to its former owners was only about P700 million because of the debts and liabilities of the carrier that Yao’s group would be assuming.

As for Yao’s offer to Seair’s owners, the source said: “We didn’t offer an inordinately low price. I think we just have to explain to them how we came up with this figure.” The offer to purchase Seair for about $2 million (or P84.63 million) was made after Yao’s group completed its recent due diligence of the airline.

In an interview on February 13, Gitsis admitted to BusinessMirror the pinch the carrier has felt with the entry of larger carriers in its major routes: “We’re still the fastest flight to Boracay (Caticlan). We still have the most modern planes. But we have felt a reduction in revenues, and a softening in the market prices.”

The Manila-Caticlan route, a major revenue earner for Seair, is now being serviced by major carriers such as Philippine Airlines through its subsidiary PAL Express/Air Philippines, and Cebu Pacific. Current fares to Caticlan have dropped to about P588, one-way, excluding insurance, taxes and other surcharges.

The carrier’s plans to tie up with Tiger Airways so it could lease two planes from the regional airline to service more domestic points, and enable Seair to fly to Macau, Singapore and other regional routes from the Clark International Airport, have also been strongly opposed by other local carriers.

“We’ve had delays with the CAB (Civil Aeronautics Board) in trying to lease planes from Tiger Air to put in service in the Philippines. We have had no approval for that. It’s been a long process. We’re surprised why we’re getting this reaction from larger companies when we’re a small company,” Gitsis said of the other challenges Seair has had to overcome.

Dornier and Gitsis own 40 percent of Seair while the rest of the shares are owned by a Filipino group led by marketing guru Tomas B. Lopez Jr.

(My story on Seair was published on the front page of the BusinessMirror on May 6, 2008. Blog entry contains corrections with regards to the offer price.)