Legal basis and relation to RA 776
- Republic Act No. 776 is the principal statute amended by Presidential Decree No. 1462.
- Republic Act No. 776 already contains the definitions, Board structure, permitting system, and penalty framework that Presidential Decree No. 1462 modifies.
Policy and purpose statements
- The decree recognizes a need for the Civil Aeronautics Board to be given more authority and flexibility to meet current and future demands on civil aviation development by Philippine trade, commerce, and tourism.
Definitions added under RA 776
- Section 3 of Republic Act No. 776 is amended by adding definitions for:
- “General sales agent” as a person who is not a bona fide employee of an air carrier and who, pursuant to authority from an airline (by itself or through an agent), sells or offers for sale air transportation or negotiates for it, or holds himself out by solicitation, advertisement, or otherwise as one who sells, provides, furnishes, contracts or arranges for such air transportation.
- “Cargo sales agent” as a person who does not directly operate an aircraft for purposes of air transportation/air commerce and is not a bona fide employee of an air carrier, who sells or offers for sale cargo air transportation, or negotiates for it, or holds himself out by solicitation/advertisement or otherwise as one who sells, provides, furnishes, contracts or arranges for such cargo air transportation.
- “Air freight forwarder” as any indirect air carrier that, in the ordinary and usual course of business, assembles and consolidates or provides for assembling and consolidating property, or performs break-bulk and distributing operations with respect to consolidated shipments, is responsible for transportation of property from the point of receipt to the point of destination, and uses the services of a direct air carrier for all or part of the transportation.
Civil Aeronautics Board composition and operations
- Board composition is amended under Section 5 of Republic Act No. 776 to provide that the Civil Aeronautics Board is composed of:
- the Minister of Tourism as Chairman;
- the Director of the Civil Aeronautics Administration as Vice Chairman;
- the Commanding General of the Philippine Air Force; and
- two members appointed by the President of the Philippines.
- Board members hold office at the pleasure of the President.
- Board members receive per diem of Five Hundred Pesos per member for each meeting actually attended, not exceeding Two Thousand Pesos a month.
- If the Minister of Tourism is absent or incapacitated, the Director of the Civil Aeronautics Administration acts as Chairman.
- Board members are prohibited from having a pecuniary interest in or owning stock or bond of any civil aeronautics enterprise.
- The Board’s principal office is in Metro Manila.
- The Board may hold hearings within the Philippines at times and places it provides by order in writing.
- Quorum is constituted by the Chairman or the Vice Chairman and two members of the Board.
- The Board’s permanent personnel are amended under Section 7:
- The Board has an Executive Director, a Deputy Executive Director, and a Board Secretary who must be a member of the Philippine Bar.
- The Executive Director is the Chief Executive of the Board and receives compensation of Thirty Seven Thousand Pesos per annum, plus such other allowances as the Board authorizes.
- The Deputy Executive Director receives salary of Thirty Thousand Pesos per annum, plus such other allowances as the Board authorizes.
- The Board Secretary records all proceedings, keeps all papers, and performs other duties prescribed by the Board.
- The Board has Chiefs of the Technical Divisions and other officers/employees required for its functions.
- The Board Secretary, together with the Chiefs of the Technical Divisions, receive compensation of Twenty-Four Thousand Pesos per annum, plus such other allowances as the Board authorizes.
- In the absence of the Executive Director and Deputy Executive Directors, the Chairman designates a senior staff member to act as Officer-in-Charge.
- Under Section 8, the Chairman may, upon recommendation of the Board, engage duly qualified consultants, experts, agencies, and/or other qualified persons for temporary service and fixes their compensation.
Powers and permitting control
- Section 10 (Powers and Duties of the Board) is amended to provide that, except as otherwise provided, the Board:
- regulates the economic aspect of air transportation; and
- has general supervision and regulation and jurisdiction and control over air carriers, general sales agents, cargo sales agents, and airfreight forwarders and their property, property rights, equipment, facilities, and franchise, as necessary to carry out the Act.
- The Board’s chartering authority is amended under Section 10(C)(3):
- The Board may authorize any type of charters (domestic or international) and special air services or flight under terms and conditions the Board judges to require based on public interest.
- Even with existing bilateral air agreements, the Board is authorized to grant a foreign airline increase in frequencies and/or capacities on international routes when, in the Board’s judgment, the national interest requires it.
- The increase in utilization of frequencies/capacities is not more than thirty days.
- All grants of frequencies and/or capacities are subject to the approval of the President.
- Under Section 10(C)(4), the Board must approve or disapprove:
- increase and/or decrease of capital,
- lease, purchase, sales, or aircraft of an air carrier engaged in air commerce,
- consolidation, merger, purchase, lease, and acquisition, and
- control of operating contracts between:
- domestic air carriers,
- domestic and foreign air carriers, or
- domestic air carriers and any persons engaged in any phase of aeronautics.
Certificate of public convenience and necessity
- Under Section 11:
- A Certificate of Public Convenience and Necessity is a permit issued by the Board authorizing a person to engage in air commerce and/or air transportation, whether foreign and/or domestic.
- No person shall engage in air commerce unless a permit is in force issued by the Board.
- After the first paragraph of Section 11, a new rule is added requiring permits for marketing/agency activities:
- No general sales agent, cargo sales agent, or airfreight forwarder shall engage in the activities covered by Section 3 paragraphs (jj), (kk), and (ll) respectively unless a permit or other form of authorization is in force issued by the Board.
- Under Section 23:
- A permit may not be transferred without the prior approval of the Board.
Violations, fines, and enforcement by CAB
- Under Section 42(B), any air carrier or person that violates or fails to comply with:
- any provision of the Act, or
- the terms, conditions, or limitations in a permit or amendment thereto, or
- any orders, rules, or regulations issued by the Board
is subject to a fine not exceeding Five Thousand Pesos per violation.
- A continuing-default penalty applies:
- A fine not exceeding Two Hundred Pesos per day is imposed for every day during which the default or violation continues.
- The Board is empowered to impose the fines after due notice and hearing.
- Payment and consequences are mandated:
- The fines imposed must be paid to the government of the Philippines through the Board.
- Failure to pay fines within the time specified in the Board’s order or decision is a ground for the suspension of the permit of the air carrier until payment is made.
- Payment may be enforced by appropriate action brought to a court of competent jurisdiction.
- References to “other fines” for violation prescribed elsewhere under Section 42 are amended/modified accordingly by the decree.
Fees and collection rules
- Section 51 is amended to provide that when any act of service is performed or rendered by the Civil Aeronautics Administration or the Civil Aeronautics Board under the Act for which no fee has been fixed by law, fees are collected as the Administration or Board prescribes from time to time.
- Fees prescribed by the Civil Aeronautics Administration require the approval of the Department Head.
Repeal and inconsistency clause
- All acts, parts of acts, executive orders, ordinances, rules, and regulations inconsistent with Presidential Decree No. 1462 are repealed, amended, or modified accordingly.