Franchise for Magnum Air Inc. operations

Magnum Air must secure all necessary certificates, permits, and licenses from the Civil Aeronautics Board (CAB) and the Civil Aviation Authority of the Philippines (CAAP).
All aircraft and their equipment must at all times be airworthy and crew members must be licensed by the Philippine government.
Equipment must include radio communications and safety gear, and be maintained under CAAP's technical regulations.
The grantee’s facilities and equipment are subject to inspection and regulation by the CAAP.
Compliance with Republic Act No. 776 (Civil Aeronautics Act) is mandatory.

The grantee must maintain scheduled, nonscheduled, and/or chartered air transport services domestically and internationally, barring force majeure or adverse weather.
At least 25% of the route frequencies must serve the domestic market.

Passenger, mail, goods, and freight rates must be just and reasonable.
Rate schedules are subject to approval and regulation by the CAB and other government agencies.

The franchise term is 25 years from the law’s effectivity unless revoked earlier.
The franchise is revoked ipso facto if the grantee fails to:
- Commence operations within 1 year of CAB permit approval,
- Operate continuously for 2 years, or
- Commence operations within 2 years from the law’s effectivity.

The grantee shall post a bond to guarantee compliance with franchise conditions.
The bond amount is determined by the CAB.
After 3 years of approved operations, if conditions are met, the bond is released.
Failure to comply results in forfeiture of bond and automatic revocation of the franchise.

The grantee may use government-owned landing and airport facilities subject to government terms and national policy.
The government reserves the right to use the grantee’s airport facilities within the Philippines.

The grantee is authorized to enter into transportation and mail contracts with the Philippine government.
Preference must be given to government contracts.
The grantee may enter into agreements with foreign airlines for international routes.

The President may temporarily take over, operate, or suspend the grantee’s facilities or equipment during war, rebellion, calamity, emergency, or public disorder.
The grantee must be compensated for use of its facilities during such periods.

The grantee shall hold the national and local governments free from claims or liabilities arising from accidents during franchise operations.

The grantee must create employment opportunities and provide on-the-job training.
Priority for employment is given to residents of the principal office location.
Labor standards and lawful employee benefits must be observed.
Annual reports to the Securities and Exchange Commission must reflect employment data.

Sale, lease, transfer, or assignment of the franchise or controlling interest requires prior congressional approval.
Congress must be informed within 60 days of any ownership changes.
Failure to report results in automatic revocation.
Successors are subject to all franchise conditions.

The grantee must offer at least 30% of its outstanding capital stock to the public via Philippine securities exchange within 5 years of starting operations.
Failure to comply leads to automatic franchise revocation.

The grantee must submit an annual operations and compliance report to the Philippine Congress committees overseeing legislative franchises and public services.
Reports are due by April 30 each year during the franchise term.

If competitors receive more favorable terms in similar franchises, those terms automatically apply to this franchise.

The franchise is nonexclusive and subject to amendment, repeal, or alteration by Congress in the public interest.

Existing laws or regulations inconsistent with this Act are repealed or amended accordingly.

The law takes effect 15 days after publication in the Official Gazette or a newspaper of general circulation.