QuestionsQuestions (Republic Act No. 7909)
RA 7909 grants Pacific Airways Corporation a franchise to establish, operate, and maintain rural air transport services for the carriage of passengers, cargo, and mail, including industrial flights, aerial agricultural spraying, aerial environmental protection, management, and related services, and also to manufacture, overhaul, assemble, repair aircraft components and related parts.
It refers to providing air transport in and between municipalities, cities, or provinces and all points and places throughout the Philippines as short-haul carriers, making such service an essential part of the national transportation network.
Except in cases of force majeure and whenever weather conditions permit, the grantee must maintain scheduled or non-scheduled air transport services at frequencies as traffic needs may require.
The grantee must secure prior approval of the Civil Aeronautics Board in determining its routes and rates for scheduled and non-scheduled passenger and/or freight services.
The grantee may use government-owned or maintained landing and replenishment facilities on land or water, except those the government deems unusable for military/naval considerations. The government reciprocally may use facilities maintained/owned by the grantee, subject to the same general premise.
Solely for receiving and transmitting weather forecasts and messages relating to the grantee’s aircraft and other matters connected with the grantee’s services.
Use must be “in accordance with the rules and regulations made by the National Telecommunications Commission.”
It authorizes a responsive system with the Philippine Air Force involving service credits that allow the Air Force to draw aircraft parts and fuel from the grantee to meet needs, with repayments in future goods and services to be drawn by the Air Force.
It may enter into transportation contracts with the Philippine government, including carrying of mail, under mutually agreed terms and conditions. It may also enter into transportation and/or servicing contracts and other contracts relating to air transport with other foreign-owned airlines, particularly those with international routes.
The grantee may be deputized by the Air Transportation Office, especially for enforcement of air safety standards, subject to the terms of the deputization.
Subject to limitations and procedures prescribed by law, the grantee may exercise eminent domain reasonably necessary for landing fields, hangars, docks, ramps, wireless stations, and other related structures. No private property may be taken without proper condemnation proceedings and just compensation. The authority applies only to land required for the actual purpose of the franchise.
The grantee must hold national, provincial, city, and municipal governments harmless from all claims, demands, or actions arising from accidents or injuries, whether to property or persons, caused by the operation of the services under the franchise.
During the franchise life, it must pay a franchise tax of 5% of gross revenues derived from transport operations. It is also subject to income tax under Title II of the National Internal Revenue Code and tax on real property under existing law; revenues from activities other than air transportation remain taxable under those rules.
The franchise is granted with the understanding that at least 60% of the capital stock is bona fide owned by Filipino citizens, and that such citizens’ interest can never fall below 60%, under penalty of cancellation of the franchise.
No. The franchise is not an exclusive grant. If a competing party receives a similar permit or franchise with more favorable terms that would place the grantee at any disadvantage, those more favorable terms become part of RA 7909 and operate equally in favor of the grantee.
The term is 50 years from the effectivity of the Act. The franchise is not valid unless the grantee accepts it within two years after effectivity, with written acceptance filed with the Civil Aeronautics Board.
The grantee may not lease, transfer, grant usufruct of, sell, or assign the franchise or its rights/privileges, nor merge with another company for the same purpose, without prior approval of Congress. Any entity that acquires it is bound by all conditions, terms, restrictions, and limitations as if granted to it.