Question & AnswerQ&A (Republic Act No. 11410)
The franchise grants Magnum Air (Skyjet) Inc. the right to establish, operate, and maintain domestic and international air transport services for carrying passengers, mails, goods, and property by air. It also includes the operation of hangars, aircraft service stations, and other auxiliary services related to air transportation.
Magnum Air must secure appropriate certificates, permits, and licenses from the Civil Aeronautics Board (CAB) and the Civil Aviation Authority of the Philippines (CAAP).
All aircraft and their accessories must be airworthy at all times. Crew members must be licensed by the Philippine government. Equipment must meet CAAP technical and safety requirements and are subject to inspection and regulation by CAAP.
The grantee must maintain scheduled, nonscheduled, and/or chartered air transport services across all points in the Philippines and internationally as required by traffic needs, with at least 25% of all frequencies allocated for the domestic market, except in cases of force majeure or adverse weather conditions.
Rates for transportation of passengers, mails, goods, and freight must be just and reasonable and are subject to regulation and approval by the CAB and other appropriate government regulatory agencies.
The franchise is granted for 25 years from the date it takes effect unless sooner revoked or cancelled due to failure to meet specific conditions such as commencing operations within a certain period or continuous operation requirements.
Failure to commence operations within one year from CAB permit approval, failure to operate continuously for two years, failure to commence operations within two years from the Act's effectivity, failure to offer at least 30% of capital stock in a Philippine securities exchange within five years, and failure to report changes in ownership to Congress within 60 days.
The grantee must file a bond issued in favor of the CAB to guarantee compliance with the franchise conditions. If the conditions are fulfilled after three years from permit approval, the bond is released; otherwise, it is forfeited to the government and the franchise is revoked.
The grantee may use government-owned landing and airport facilities subject to government terms and national policy considerations. Conversely, the Philippine government has the right to use landing and airport facilities owned or maintained by the grantee within the Philippines.
In times of war, rebellion, public peril, calamity, emergency, disaster, or peace disturbances, the President may temporarily take over, operate, or suspend the grantee's facilities or authorize government agency usage, with due compensation to the grantee.
The grantee must create employment opportunities, allow on-the-job training prioritizing residents near the principal office, comply with applicable labor laws and standards, and reflect created jobs in the General Information Sheet submitted annually to the Securities and Exchange Commission.
No. The grantee cannot sell, lease, transfer, grant usufruct, assign the franchise, merge, or transfer controlling interest without prior approval from the Congress of the Philippines. Failure to report such changes within 60 days will result in automatic revocation of the franchise.
The grantee must offer at least 30% of its outstanding capital stock or a higher percentage mandated by law in a securities exchange in the Philippines within five years from starting operations. Noncompliance results in automatic revocation of the franchise.
The grantee is required to submit an annual report to the Congress through designated committees on its compliance with franchise terms and operational status on or before April 30 each year during the franchise term.
If competing entities are granted more favorable terms, provisions, or privileges, those same favorable terms shall apply equally to the grantee, ensuring no competitive disadvantage.
No, the franchise is nonexclusive and may be amended, altered, or repealed by Congress when public interest requires.
If any part is held invalid, the remaining provisions of the Act that are not affected shall remain valid and enforceable.