Law Summary
International Air Transportation: Carrier Designation
- At least two (2) international carriers must be designated as official Philippine carriers.
- Additional carriers may be designated if designated carriers do not utilize allotted frequencies under Air Services Agreements.
International Air Transportation: Traffic Rights and Routes
- Exchange of traffic rights/routes based on:
- National interest, including promotion of trade, investments, tourism.
- Reciprocity, meaning exchange of rights and opportunities of equal or equivalent value.
- The Civil Aeronautics Board (CAB) determines national interest with focus on the country's larger interest and air service users.
International Air Transportation: Frequency and Capacity
- Grants of frequencies, capacity, route rights to foreign carriers are the CAB's prerogative, subject to Presidential confirmation.
- Rules for frequency/capacity allocation:
- Third and fourth freedom carriers' frequencies based on reciprocity and Philippine value.
- Fifth freedom traffic secondary and supplemental; CAB may grant fifth freedom rights to develop routes/destinations.
- Special flights may be authorized by CAB if designated carriers fail to meet demand.
International Air Transportation: Tariffs and Fares
- CAB regulates fares, rates, and charges of foreign carriers under existing laws.
- Discounts/promotions consider reciprocity and Philippine value.
- Filipino citizens should purchase and pay for air tickets locally where possible.
International Air Transportation: Charters and Non-Scheduled Services
- CAB may authorize charters and non-scheduled flights provided these do not significantly divert scheduled service traffic.
International Air Transportation: Developmental and Cooperative Air Services
- CAB can grant temporary (up to one year) authority to operate developmental air services for route/destination growth.
- Authority may be granted for services connecting non-premier foreign airports to new Philippine gateways under economic cooperation agreements.
International Air Transportation: Negotiating and Consultation Panels
- Air Negotiating Panel led by Department of Foreign Affairs (DFA) with CAB, designated carriers, and others authorized by the President.
- Consultation Panel led by Department of Transportation and Communications (DOTC) through CAB, alongside DFA, DTI, DOT, designated carriers, and others authorized by DOTC Secretary.
Domestic Air Transportation: Market Entry and Exit
- Liberalization encouraged with at least two operators per route/link.
- Routes served by single operators open to new entrants.
- Operators may exit routes subject to CAB findings that abandonment is uneconomical and in public interest.
Domestic Air Transportation: Tariffs and Fares
- Passage, freight, and charges liberalized within legal allowances.
- Deregulation of fares on routes with multiple operators.
- Single-operator routes remain regulated.
- CAB monitors all rates and charges.
Implementation and Compliance
- Government agencies, including government-owned or controlled corporations, must support and cooperate with this Order.
- Existing inconsistent executive, department, or agency issuances are amended or revoked.
- CAB directed to issue implementing rules and regulations.
- The Order takes effect 15 days after publication in a newspaper of general circulation.