SEAir Franchise for Air Transport Services

The grantee must secure all necessary permits and licenses from the Civil Aeronautics Board (CAB).
All aircraft and crew must be certified as airworthy and licensed by Philippine authorities.
Aircraft must have required communications, safety, and other equipment and adhere to Civil Aviation Authority of the Philippines regulations.
Equipment and operations are subject to inspection and regulation by the Civil Aviation Authority.
Compliance with Republic Act No. 776 (Civil Aeronautics Act) and related regulations is mandatory.

The grantee is required to maintain scheduled, non-scheduled, or chartered services to destinations nationwide and internationally, barring force majeure or adverse weather.
At least 25% of all service frequencies must cover the domestic market.

Rates for transportation of passengers, mail, goods, and freight must be just and reasonable.
Rate setting is subject to regulation and approval of the CAB and other relevant government agencies.

The franchise term is 25 years from enactment unless revoked earlier.
Franchise is automatically revoked if the grantee fails to commence operations within one year after CAB permit approval, operate continuously for two years, or commence operations within two years from enactment.

The grantee must file a bond with CAB to guarantee compliance with franchise conditions.
After three years of satisfactory compliance, the bond may be canceled; otherwise, it will be forfeited and the franchise revoked.

The grantee may use government-owned landing and airport facilities subject to terms, restrictions, and national policies.
The government retains the right to use facilities owned or maintained by the grantee.

The grantee can enter into transportation-related contracts with the Philippine Government, including mail carriage, with preferential consideration.
May also contract with foreign-owned airlines for maintenance, servicing, and international routes.

The President may temporarily take over or suspend operations of the grantee’s facilities or equipment in times of war, emergency, or other public disturbances.
The government must compensate the grantee for any such temporary takeover.

The grantee shall hold the national and local governments harmless from all claims arising from accidents or injuries related to its operations.

The franchise cannot be sold, transferred, leased, assigned, or merged without prior Congressional approval.
Any transfer subjects the new holder to the same conditions and limitations.

The grantee must offer at least 30% of outstanding capital stock to the public on a Philippine securities exchange within five years of commencing operations.
Failure to do so results in automatic revocation of the franchise.

The grantee must submit an annual report to Congress on franchise compliance and operational status within 60 days after each year.

If competitors receive more favorable terms or privileges, such terms automatically apply to the grantee equally.

Invalidity of any provision does not affect the validity of the remaining provisions.

Congress may amend, alter, or repeal the franchise when public interest requires.
The franchise is nonexclusive and does not preclude others from obtaining similar rights.

The Act takes effect 15 days after publication in at least two newspapers of general circulation, initiated by the grantee.