Philippine Civil Aeronautics Act

Definitions and control terms

Section 3 defines the following terms, controlling in the application and construction of the Act unless the context requires otherwise:
“Administrator” means the Civil Aeronautics Administrator (Section 3(a)).
“Aerodrome” means a defined area on land or water, including buildings, installations, and equipment intended for arrival, departure, and aircraft movement (Section 3(b)).
“Aeronautics” means the science and art of flight (Section 3(c)).
“Air carrier” means a person who undertakes, whether directly or indirectly, or by lease or other arrangements, to engage in air transportation or air commerce (Section 3(f)).
“Air transportation” means service or carriage of persons, property, or mail, in whole or in part, by aircraft (Section 3(h)).
“Airmen” includes: individuals in command or as pilot, mechanic, flight radio operator, or crew member engaged in navigation of aircraft while under way; and individuals directly in charge of inspection, maintenance, overhauling, or repair of aircraft, aircraft engine, propellers, or appliances; and aircraft dispatcher or air-traffic control operator (Section 3(l)).

Public-interest policies for aviation

Section 4 requires the Civil Aeronautics Board and the Civil Aeronautics Administrator to consider the following, among other things, as in the public interest and in accordance with public convenience and necessity:
Development and utilization of the air potential of the Philippines (Section 4(a)).
Encouragement and development of an air transportation system properly adapted to foreign and domestic commerce of the Philippines, the Postal Service, and National Defense (Section 4(b)).
Regulation of air transportation to preserve inherent advantages, assure the highest degree of safety, and foster sound economic condition, while improving relations and coordinating transportation (Section 4(c)).
Promotion of adequate, economical, and efficient service at reasonable charges without unjust discrimination, undue preferences, or unfair or destructive competitive practices (Section 4(d)).
Competition between air carriers to the extent necessary for sound development of the air transportation system for foreign and domestic commerce, Postal Service, and National Defense (Section 4(e)).
Promotion of safety of flight in air commerce in the Philippines (Section 4(f)).
Encouragement and development of civil aeronautics (Section 4(g)).

Civil Aeronautics Board: structure and powers

The Civil Aeronautics Board is composed of:
(1) the Secretary of Commerce and Industry as Chairman,
(2) the Civil Aeronautics Administrator,
(3) the Commanding Officer of the Philippine Air Force, and
(4) two other members appointed by the President (Section 5).
The Board holds office at the pleasure of the President and members receive per diem for each meeting actually attended in an amount fixed by the President; in case of absence or incapacity of the Secretary of Commerce and Industry, the Administrator acts as Chairman (Section 5).
No member of the Board may have a pecuniary interest in, or own any stock or bond of, any civil aeronautics enterprise (Section 5).
The Board’s principal office is in the City of Manila and it may hold hearings in the Philippines as provided by written order; Chairman and two members constitute a quorum, and a majority vote of quorum is required for valid decisions/orders; tie votes are referred to the President for decision (Section 6).
The Board has permanent personnel: a permanent Secretary (a member of the Philippine Bar) and a permanent stenographer, with specified annual compensation (Section 7).
The Board may engage temporary qualified consulting engineers and other qualified persons subject to Presidential approval and without regard to civil service rules (Section 8).
The Board makes an annual report to the President containing information/data valuable to determining questions connected with development of civil aeronautics, plus recommendations for additional legislation (Section 9).

Board authority over permits and rates

The Board regulates the economic aspect of air transportation and has general supervision and regulation, jurisdiction, and control over air carriers and their property, rights, equipment, facilities, and franchises as necessary to carry out the Act (Section 10).
The Board may issue and amend orders and general or special rules, regulations, and procedures necessary to carry out the Act (Section 10).
The Board may issue, deny, amend, revise, alter, modify, cancel, suspend, or revoke temporary operating permits or Certificates of Public Convenience and Necessity:
- upon petition or complaint, or
- on its own initiative (Section 10),
- and for foreign air carriers, issuance requires approval of the President of the Republic of the Philippines (Section 10).
The Board fixes and determines reasonable individual, joint or special rates, charges or fares that an air carrier may demand/collect/receive, and it may adopt air-carrier proposed rates if not unduly preferential, unduly discriminatory, or unreasonable; the burden of proof is on the air carrier to show proposed rates are just and reasonable (Section 10).
In fixing rates/charges/fares, the Board considers traffic movement effects, public need for adequate/efficient transportation at the lowest cost consistent with service, service standards prescribed by law, inherent advantages of aircraft transportation, and each carrier’s need for revenue under honest, economical, and efficient management to provide adequate and efficient service (Section 10).
The Board authorizes charters (domestic or international) and special air services previously exercised by the Department of Commerce and Industry under Commonwealth Act No. 97, under terms and conditions required by the public interest (Section 10).
The Board approves or disapproves increase of capital, sale of equipment, consolidation/merger, purchase/lease/operating contract, or acquisition and control between domestic air carriers; or between domestic and foreign air carriers; or between domestic air carriers and any person engaged in any phase of aeronautics (Section 10).

Board investigations, records, subpoenas, review

The Board may inquire into management of any air carrier and obtain full and complete reports and other information from the carrier and persons controlling/controlled by/under common control, and it may require reports to be under oath when required (Section 10).
The Board may require annual, monthly, periodical, and special reports from any air carrier, prescribe manner and form, require specific answers, and require reports to be under oath when required; it may also require filing of contracts/agreements/arrangements with other carriers or persons relating to traffic affected by the Act (Section 10).
The Board prescribes the forms of accounts/records/memoranda of traffic movement and money receipt/expenditures and the time to preserve them, while allowing additional records if they do not impair integrity or create undue financial burden (Section 10).
The Board may require officers and directors of air carriers to transmit reports describing shares or interests held by the air carrier with persons engaged in any phase of aeronautics, and holding/control of stock in and control of other persons engaged in any phase of aeronautics (Section 10).
The Board may investigate possible violations of the Act or its rules/regulations and take action consistent with the Act to prevent further violation (Section 10).
The Board may issue subpoena or subpoena duces tecum, require attendance and testimony, and require production of books, papers, tariffs, contracts, agreements, and other documents, verified under oath by the person in custody of the documents (Section 10).
The Board may review, revise, reverse, modify, or affirm on appeal administrative decisions/orders of the Administrator on: grounding of airmen/aircraft, revocation or denial of certificates, and imposition of civil penalties/fines relating to violations (Section 10).
The Board may determine on its own initiative or on appeal whether to impose, remit, mitigate, increase, or compromise fines and civil penalties (Section 10).
The Board must consult with the Department of Foreign Affairs on negotiation of air agreements with foreign governments for promotion/establishment/development of foreign air transportation (Section 10(1)).
The Board must consider obligations assumed by the Republic of the Philippines in treaties/conventions/agreements affecting civil aviation (Section 10(2)).

Certificates, permits: issuance and limits

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, foreign and/or domestic (Section 11).
Any permit may be altered, amended, modified, suspended, cancelled, or revoked by the Board in whole or in part upon complaint, petition, or on its own initiative whenever the Board finds such action is in the public interest (Section 11).
Permits carry reasonable terms, conditions, or limitations as required by the public interest (Section 11).
Permits do not confer any proprietary/property/exclusive right in the use of air space, civil airways, landing areas, or government air-navigation facilities (Section 11).
Permits must specify terminal and intermediate points (if any), the service to be rendered, times of arrival and departure at each point, and flight frequency (Section 11).
No change in routes, rates, schedules, frequency, or supplemental/additional flights covered by an Air Commerce Permit or franchise may be effected without prior Board approval (Section 11).
If operation is without the Philippines, the permit designates terminal/intermediate points only insofar as the Board deems practicable, and otherwise designates only general route(s) (Section 11).
No carrier may abandon any route or part thereof unless the Board finds abandonment uneconomical and in the public interest (Section 11).

Citizenship and Board proceedings rules

Section 12 requires that permits authorizing persons to engage in domestic air commerce and/or air transportation be issued to citizens of the Philippines, except as provided in the Constitution and existing treaties.
Board proceedings must be conducted in a manner conducive to proper dispatch of business and ends of justice; hearings/investigations follow the Board’s adopted rules of procedure; the Board is not bound by technical rules of evidence (Section 13).
The Board may designate in writing a member or officer to conduct hearings/investigations; the designee may administer oaths, issue subpoenas/subpoena duces tecum, require attendance/testimony, examine witnesses, and conduct ocular inspection or enter airline establishments/buildings/places/premises for official business (Section 14).

Applications, notice, hearings, and permits

Applications for a permit must be in writing, verified, in the Board-prescribed form and containing the required information, and accompanied by proof of service upon interested persons as the Board by regulation requires (Section 15).
Upon filing, the Board must give due notice:
- to the public by posting in the Board office and by publication once a week for three consecutive weeks in a newspaper of general circulation at the expense of the applicant; and
- to other persons as the Board determines by regulation (Section 16).
Notice/publication may be dispensed with when the Board judges that the public interest requires it (Section 16).
Any interested person may file a memorandum supporting or opposing the issuance (Section 16).
Within one week after the last publication, the Board or its duly designated representative sets time and place for meeting and notifies parties/their attorneys in writing to appear; if publication is dispensed with, the Board immediately sets time and place (Section 17).
If a party fails to appear or no party appears, the Board or its designee may proceed ex parte or adjourn for a future date, giving notice to absent parties (Section 18).
The Board or designees may order depositions for witnesses residing within or without the Philippines, taken in the manner prescribed by the Rules of Court; necessary witnesses receive mileage fees at the same rates as allowed in Courts of First Instance (Section 19).
Hearings on all applications are open to the public unless the Board determines otherwise for reasons of national security (Section 20).
Hearings are recorded in the form/manner the Board determines; the record becomes part of the application’s records (Section 20).
The Board must issue a permit authorizing the whole or part of service covered by the application if it finds the applicant fit, willing, and able to perform properly and conformity exists with the Act and rules, and that service is required by public convenience and necessity; otherwise the application is denied (Section 21).

Permit changes: modification, suspension, revocation

The Board may, after notice and opportunity for hearing, alter/amend/modify/suspend a permit in whole or part if public convenience and necessity so require, or revoke a permit for intentional failure to comply with the Act, Board orders/rules/regulations, or permit terms/conditions/limitations (Section 22).
For good cause, the Board may suspend any permit or privilege/authority for a period not exceeding thirty days by order without notice and hearing whenever necessary to avoid serious or irreparable damage or inconvenience to the public (Section 22).
Interested persons may file protests or memoranda supporting or opposing alteration/amendment/modification/suspension/revocation (Section 22).
Permits may not be transferred unless approved by the Board as consistent with public interest (Section 23).

Permit duration and route inauguration

Each permit is effective from the date specified in the permit and continues until suspended or revoked, or until the Board certifies operation has ceased (Section 24).
If authorized service is not inaugurated within ninety days after authorization (as fixed by the Board) or within another Board-designated period, the Board may order the permit cease to be effective to the extent of the service (Section 24).
No permit may be issued for more than twenty-five (25) years (Section 24).

Civil Aeronautics Administration: organization

The Civil Aeronautics Administration is under the administrative supervision and control of the Department of Commerce and Industry and has a chief and deputy chief known as Administrator and Deputy Administrator (Section 25).
The Administrator is appointed by the President with consent of the Commission on Appointments; the Administrator receives an annual basic salary of seven thousand two hundred pesos, and additional salary of one thousand eight hundred pesos per annum subject to Presidential approval; the Administrator is administrative head with bureau-head powers and administers laws relating to civil aviation in the Philippines, and submits written reports of office activities/transactions annually or as required (Section 26).
The Deputy Administrator is appointed by the President with consent of the Commission on Appointments and receives an annual basic salary of six thousand pesos (Section 27).
Besides the Administrator, authority to administer oaths extends to the Deputy Administrator, chiefs of divisions, and duly designated members of examining/investigating committees (Section 28).
The Administration has permanent divisions determined by administrative regulations or office orders approved by the Secretary of Commerce and Industry, including compensation rates and details (Section 29).
Upon recommendation of the Administrator, officers/assistants/employees are appointed by the Secretary of Commerce and Industry; the Administrator may assign personnel for study/training abroad within available funds (Section 30).
Licensed airmen and other authorized personnel required for regular/frequent aerial flights may receive an increase in compensation equivalent to fifty per centum of base pay, subject to the condition that total flying hours per month are not less than four hours (Section 30).
When employees work beyond usual office hours, they receive at least twenty-five per centum of regular salaries as additional overtime compensation (Section 30).
The Administrator may engage temporary service consulting experts or qualified persons with Presidential approval and fix their compensation (Section 31).

Administrator: technical powers and safety rules

The Administrator, subject to general control/supervision of the Department Head, primarily handles the technical and operational phase of civil aviation, including:
Carrying out Act purposes/policies and enforcing Act provisions and rules/regulations; primarily vested with technical/operational authority (Section 32).
Designating and establishing civil airways; acquiring/control/operating/maintaining air navigation facilities along airways; charting airways and arranging publication including required aeronautical charts/maps using government agencies’ equipment/supplies/assistance as practicable (Section 32).
Issuing an airman’s certificate specifying authorized capacity; issuing only upon finding the applicant properly qualified and physically able; certificates include terms/conditions/limitations to assure safety; airman licenses may be issued only to qualified persons who are citizens of the Philippines or citizens of countries granting similar rights/privileges (Section 32).
Issuing airworthiness certificates for aircraft, prescribing duration, type of service, and other terms/conditions/limitations required (Section 32).
Issuing air carrier operating certificates and establishing minimum safety standards; issuing only to aircraft registered under the Act (Section 32).
Issuing type certificates for aircraft, aircraft engine, propellers, and appliances (Section 32).
Inspecting/classifying/rating air navigation facilities and aerodromes for suitability and issuing certificates for such facilities/aerodromes; determining suitability of foreign aerodromes, air navigation facilities, and air routes prior to operation of Philippine-registered aircraft for foreign air transportation and from time to time thereafter for safety (Section 32).
Issuing certificates of persons or civil aviation schools giving flying instruction, repair stations, and other air agencies, and providing for examination and rating (Section 32).
Promulgating safety-related rules and regulations covering a broad range including airmen licensing, certificates, airworthiness, air traffic services, radio and aeronautical telecommunications, aircraft accident inquiry, aerodromes, construction of obstructions, registration of aircraft, search and rescue, facilitation of air transport, aircraft operations (domestic and international, scheduled and non-scheduled), meteorology, rules of the air, prevention of collision, identification of aircraft, safe altitudes, and other practices/procedures for safety/regularity/efficiency (Section 32).
Enforcing rules/regulations and conducting investigations for violations; in investigations the Administrator may require subpoenas/subpoena duces tecum, attendance/testimony, production of books/papers/documents/exhibits/evidence, and depositions before persons authorized to administer oath; refusal to submit to reasonable requirements is punishable under the Act (Section 32).
Investigating accidents involving aircraft and reporting Board facts/conditions/circumstances and probable cause; making recommendations to prevent similar accidents; when accidents result in serious or fatal injury, the Board must make public the report and recommendations (Section 32).
Prohibiting admission/use in civil suits of any accident report or any statement made during investigation/hearing relative to the accident for any purpose in any civil suit growing out of matters revealed in the report/statement/investigation/hearing (Section 32).
Collecting and disseminating civil aeronautics information and development of air commerce and aeronautical industry; exchanging information with foreign governments; providing direct communication with international aeronautical agencies for technical/operational phase matters (Section 32).

Administrator: fees, penalties, airports, and appeals

The Administrator may acquire and operate aircraft necessary to execute Administration duties and functions (Section 32).
The Administrator may plan/design/acquire/establish/construct/operate/improve/maintain/repair aerodromes and other air navigation facilities (Section 32).
The Administrator may impose and fix reasonable charges and fees for use of government aerodromes/air navigation facilities (with exceptions referenced to Section 40, paragraph twenty-five, and related provisions), for services rendered in rating aerodromes/air navigation facilities, civil aviation schools, instructions, aircraft repair stations, and aircraft radio/aeronautical telecommunications stations; the Administrator may collect and receive charges/fees for registration of aircraft and issuance/renewal of licenses/certificates for aircraft and related categories under the Act (Section 32).
The Administrator may fix reasonable charges for privately owned air navigation facilities and aerodromes (Section 32).
The Administrator may impose fines and/or civil penalties and make compromises (Section 32).
The Administrator may adopt a system for registration of aircraft as provided in the Act (Section 32).
The Administrator may designate prohibited and danger areas in consonance with international aeronautical agencies and national security (Section 32).
The Administrator may issue/deny/cancel/revoke certificates, permits, or licenses pertaining to aircraft, airmen, and air agencies; any order denying/cancelling/revoking may be appealed to the Board, whose decisions are final within fifteen days from date of notification (Section 32).
The Administrator administers, operates, manages, controls, maintains, and develops the Manila International Airport and all government-owned aerodromes except those controlled/operated by the Armed Forces of the Philippines, with powers including planning/construction/alteration, contracting, acquiring/holding/purchasing/leasing necessary properties and easements, but real property sale requires Presidential approval; granting concessions for space/property within the aerodrome for essential/appropriate operation, while exclusive use of any landing strip or runway cannot be granted (Section 32).
The Administrator may determine types of aircraft allowed to use aerodromes for public safety and may prescribe/enforce rules/regulations consistent with existing laws for safety/health/welfare within the aerodrome (Section 32).
The Administrator may determine/fix/impose/collect/receive landing fees, parking space fees, royalties on sales/deliveries to aircraft of aviation gasoline, oil and lubricants, spare parts, accessories, supplies, tools, and other royalties/fees/rentals for property under its management/control (Section 32).
The Act defines:
- “Landing fees” as charges for use of any landing strip or runway by any aircraft landing or taking off (Section 32).
- “Terminal fees” as charges for parking at/near ramp/terminal area/building for loading/unloading passengers and/or cargo (Section 32).
- “Royalties” as charges based on gross business or sales, or gross or net profit (Section 32).
- “Supplies” as items necessary for or incidental to aircraft operation (Section 32).
The Administrator may grant permits to civil aircraft or persons to carry instrument or photographic device for aerial photography or taking pictures by photograph or sketching any part of the Philippines (Section 32).

Registration and ownership of aircraft

Aircraft are eligible for registration only if owned by citizens of the Philippines and not registered under laws of any foreign country, except as provided by the Constitution and existing treaties (Section 34).
The certificate of registration is conclusive evidence of nationality for international purposes but not conclusive evidence in proceedings under Philippine law (Section 34).
The certificate of registration is conclusive evidence of ownership except in a proceeding where ownership is, or may be, at issue (Section 34).
Applications for aircraft registration must be in writing, signed and sworn to by the owner, and state date/place of filing, aircraft specifications/construction/technical description, and other Administrator-required information in Administrator-prescribed form/manner by regulations (Section 35).
If the Administrator finds the aircraft eligible, the Administrator registers it and issues a certificate of registration (Section 36).
The Administrator may revoke any certificate of registration for any cause rendering the aircraft ineligible (Section 37).
Conveyances affecting title or interest in civil aircraft of Philippine registry are invalid against persons other than the conveying party and those in privity (heirs, assignees, executors, administrators, devisees, successors in interest, and persons with actual notice) until recorded in the Civil Aeronautics Administration; recorded conveyances are valid against all persons (Section 38).
Recording governs effect: instruments required to be recorded take effect from the date of record in the Administration books, not from date of execution (Section 38).
Conveyances cannot be recorded unless they comply with requirements for registration of documents affecting land; conveyances must state (1) interest of the person executing the conveyance (or vendor’s interest in conditional sale), and (2) interest transferred (Section 39).
The Administrator records conveyances delivered in order of receipt and keeps indexed files showing aircraft identifying description, names of parties, instrument date and record date/time, transferred interest, if security for indebtedness then amount and maturity date, and all mortgages/liens/leases/encumbrances/decrees/instruments/attachments/entries affecting aircraft and matters determined under the Act (Section 40).
Airworthiness certificate applications for aircraft whose ownership has not been recorded must include information needed by the Administrator to show property interests and nature/extent of such interest (Section 41).

Violations and penalties for offenders

Engaging in air commerce without a permit issued by the Board is punishable by a fine not exceeding PHP 5,000, imprisonment for not more than 1 year, or both, in the discretion of the court (Section 42).
Persons already engaging in air commerce on the Act’s approval date may continue until the Board acts on an application for a permit; the application must be filed within 120 days after Act approval (Section 42).
Any air carrier violating terms/conditions/limitations in any permit or amendment is punished by a fine not exceeding PHP 1,000 for each violation (Section 42).
Any air carrier violating any order/rule/regulation of the Board is punished by a fine not exceeding PHP 1,000 for each violation (Section 42).
The following acts subject an air carrier to a fine not exceeding PHP 1,000 for each offense (Section 42):
- Discounts or rebates on authorized rates, fares, and charges.
- Adopting rates, fares, and charges found/determined by the Board to be unjust, unreasonable, unduly preferential, unjustly discriminatory in a final order, or not previously approved/authorized by the Board.
- Issuing free pass/free tickets/free or reduced rates/fairs/charges for passengers except to: officers/agents/employees of the air carrier and their immediate families; witnesses and attorneys attending legal investigations into accidents or investigations in which the carrier is interested; persons injured in aircraft accidents and physicians/nurses attending; Board members; Civil Aeronautics Administration officers/personnel when traveling on official business upon exhibition of credentials; Members of Congress; and other persons duly approved by the Board.
Operating any civil aircraft in violation of any rule/regulation/order issued by the Administrator relating to aeronautical safety standards/practices/procedures is punishable by a fine not exceeding PHP 5,000, imprisonment for not more than 1 year, or both (Section 42).
Without previous approval of the Civil Aeronautics Board, effects