Aviation authorities said Thursday they have blocked a marketing deal between budget Singapore carrier Tiger Airways and a small local partner in a fight over the booming domestic aviation market.
The Civil Aeronautics Board said the deal between Tiger and South East Asian Airlines (SEAir) broke a law banning foreign carriers from operating domestic routes.
It also ordered SEAir to stop advertising flights between Manila and the major cities of Cebu and Davao that it was due to start flying on July 2.
"A circumvention of the law on cabotage is against public interest and constitutes an unfair business practice that must be nipped in the bud," the board said in its written order dated May 18.
The writ is temporary but the board is set to make a final ruling shortly on allegations that Tiger and SEAir broke the law, its hearing officer Wyrlou Zamudio told AFP.
The final ruling should be issued at the board's next meeting, Zamudio said, while adding no specific date has been set for the meeting.
Cebu Air, Air Philippines Express and Philippine Airlines filed separate complaints earlier this month over the SEAir flights that would use Airbus aircraft leased from Tiger, which would also sell seats on its booking systems.
SEAir president Avelino Zapanta told AFP it would comply with the regulators' interim ban, but rejected allegations the arrangement with Tiger was illegal.
"Definitely not. That's what they've been trying to prove and they haven't proved anything," Zapanta said.
He said the dispute reflected rising competition in the domestic aviation market, where passenger traffic had risen 22 percent last year.
Should the government eventually rule against SEAir, the company would consider increasing destinations to other Asian routes, Zapanta added.
SEAir now flies to five small provincial airports from Manila and also serves the Boracay beach resort, the Philippines' top tourist draw, from its hubs at Clark airport near Manila and Cebu.
The company also began flying to Singapore from Clark in December, using leased Tiger aircraft.
Source: AFP Asian Edition
