Question & AnswerQ&A (Republic Act No. 11682)
Republic Act No. 11682 renews for another twenty-five (25) years the franchise granted to Air Philippines Corporation, doing business as AirPhil Express, PAL Express, and Philippine Airlines, to establish, operate and maintain domestic and international air transport services.
The franchise covers the carriage of passengers, mails, goods, and property by air, both domestic and international, including maintenance and operation of hangars, aircraft service stations, wireless communication facilities for air navigation, and other auxiliary air transport services.
The Grantee must secure appropriate certificates, permits, and licenses from the Civil Aeronautics Board (CAB) and the Civil Aviation Authority of the Philippines (CAAP). All aircraft must be airworthy and crews licensed by the Philippine government.
The franchise shall be deemed ipso facto revoked if the Grantee fails to operate continuously for two (2) years.
At least twenty-five percent (25%) of all flight frequencies must serve the domestic market within the Philippines.
The Grantee must fix just and reasonable rates for transportation of passengers, mails, goods, and freight, subject to the regulations and approval of the CAB and other proper regulatory agencies.
The President of the Philippines has special rights to temporarily take over and operate the Grantee's facilities or equipment, temporarily suspend operations, or authorize government use of such facilities upon due compensation during times of war, rebellion, public peril, calamity, emergency, disaster or disturbance of peace and order.
The Grantee cannot sell, lease, transfer, grant usufruct, assign this franchise, merge, or transfer controlling interest without prior approval of Congress. Failure to inform Congress of such transactions within 60 days after completion results in ipso facto revocation of the franchise.
At least thirty percent (30%) of the outstanding capital stock must be offered to Filipino citizens in any Philippine securities exchange within five (5) years from the effectivity of this Act. Noncompliance leads to ipso facto revocation of the franchise.
The Grantee must create employment opportunities and accept on-the-job trainees, prioritizing residents where the principal office is located, and must comply with applicable labor laws and allowances. Employment figures must be reflected in the annual General Information Sheet filed with the Securities and Exchange Commission.
Failure to submit the annual report results in a fine of Five hundred pesos (P500.00) per working day of noncompliance, which is separate from CAB penalties and is remitted to the Bureau of the Treasury.
No, the franchise is not exclusive and is subject to amendment, alteration, or repeal by Congress when public interest requires.
The annual report must include updates on commencement, development, operation and expansion of business; audited financial statements; the latest General Information Sheet submitted to the SEC; certification from the CAB and CAAP on permits and operations; and updates on the dispersal of ownership undertaking, if applicable.
The franchise is renewed for a period of twenty-five (25) years from the effectivity of the Act.