SkyJet Responds to Aircraft Seizure Case

After the announcement that the Bureau of Customs may auction off an aircraft belonging to SkyJet Airlines, the carrier's new management is trying to reassure the public and the respective authorities that the boutique carrier is conducting an internal investigation to ensure that all legal obligations are satisfied. 

RP-C8538
Photo Credit: Adrian Smith/PPSG

The Philippine Bureau of Customs revealed earlier this week that it intends to auction off an 80-seat British Aerospace 146 aircraft valued at P583 million if the allegations are proven that Magnum Air Inc, operating as SkyJet Airlines failed to pay P90 million in customs taxes and duties at the time of the aircraft's importation. It would be the first time in the government agency's history that such action has been taken.

SkyJet originally came under scrutiny for continuing to operate commercial flights from 2014 to 2017 without allegedly paying the corresponding customs taxes and duties. SkyJet, under its legal name Magnum Air, was a former locator of the Subic Bay Metropolitan Authority, which previously granted the carrier tax-free privileges. However, according to the Port of NAIA district collector Carmelita Talusan, Magnum Air was delisted in 2014, forfeiting its privilege, and consequently, should have paid taxes after the aircraft in question was found at a hangar in the Port of NAIA.

However, the current management and ownership of Magnum Air are appealing the claim citing that the seized aircraft was not owned by the current owners at the time of import, but rather the carrier's past owners. According to SkyJet's management, the current owners of Magnum Air filed a case of Syndicated Estafa in February 2016 against the previous management for illegal acts and other irregularities. The complaint was submitted to the Bureau of Customs as part of the seizure proceedings.

In addition, the carrier asserts that it completed an internal compliance audit in December 2016 and communicated to the Bureau of Customs Port of Subic that it was willing to voluntarily disclose and settle any tax and duty obligation regarding the aircraft in question. This directive by the airline's management was communicated prior to the issuance of the Warrant of Seizure and Detention in May 2017. At the time, Skyjet's existing management made the gesture without knowledge or participation of the misdeeds of the previous management.

SkyJet management confirmed that the seized aircraft, RP-C8538, a series 100 British Aerospace 146, was legally admitted during its initial importation as proven by documents submitted to the Bureau of Customs for the seizure proceedings. The current management has continually reiterated its willingness to settle any past tax or duty obligation that may be legally due for the seized aircraft.

Although the present seizure case has now carried on for more than one year, SkyJet's management continue to cooperate and participate actively in the legal proceedings being led by the Bureau of Customs. In a statement released by the airline, the company praised the government's efforts to improve the BOC and correct any irregularities.

The carrier has undergone corporate and management restructuring since 2016, following the completion of its own internal compliance audits to address and correct the erroneous practices of the previous management and to ensure strict compliance with all applicable regulatory laws and regulations.

Last month, SkyJet Airlines named industry veteran Patrick Tan as its new President & CEO. Tan reaffirmed that the company will continue to investigate and comply with any lawful decision that may arise from this case as a result of the previous management's illegal acts. 

"We are very concerned in this issue and we would like to assure the public and the authorities that we shall be investigating on our end," said Tan. "We will work with the government authorities to ensure all obligations have been duly settled and the persons responsible will be held accountable." Tan went on to reaffirm the airline's compliance with the standards and practices of the Civil Aviation Authority of the Philippines and expressed his apologies to the travelling public for the uncertainty raised by this issue.

Meanwhile, the airline will continue to pursue a criminal case filed against the previous management in February 2016, long before the seizure case emerged. 

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