AN ACT GRANTING THE ASIAN SPIRIT

Case Overview and Summary

Summary of Republic Act No. 9183

Nature and Scope of Franchise (Section 1):
- Grants Asian Spirit, Inc. (the grantee) a franchise to establish, operate, and maintain domestic and international air transport services for passengers, mail, goods, and property.
- Includes the operation of hangars, aircraft service stations, and other auxiliary facilities.
- Allows the grantee to construct and operate wireless communication facilities for air navigation purposes.

Regulatory Compliance (Section 2):
- The grantee must secure appropriate permits and licenses from the Civil Aeronautics Board.
- All aircraft and crew members must be licensed and comply with regulations of the Air Transportation Office.
- The grantee's equipment and operations are subject to inspection and regulation by the Air Transportation Office.
- The grantee must comply with Republic Act No. 776 and its regulations.

Responsibility to the Public (Section 3):
- The grantee shall maintain scheduled, non-scheduled, and chartered air transport services throughout the Philippines and between the Philippines and other countries, as traffic needs require.
- At least 25% of all frequencies shall be for the domestic market.

Rates for Services (Section 4):
- The grantee shall fix just and reasonable rates for transportation, subject to regulations and approval of the Civil Aeronautics Board and other regulatory agencies.

Terms of Franchise (Section 5):
- The franchise is valid for 25 years from the date of effectivity, unless revoked or cancelled earlier.
- The franchise shall be revoked if the grantee fails to:
- Commence operations within 1 year from the approval of its permit by the Civil Aeronautics Board.
- Operate continuously for 2 years.
- Commence operations within 2 years from the effectivity of this Act.

Acceptance and Compliance (Section 6):
- The grantee must accept the franchise in writing within 60 days after the effectivity of this Act.
- Non-acceptance shall render the franchise void.

Bond (Section 7):
- The grantee shall file a bond, determined by the Civil Aeronautics Board, to guarantee compliance with the franchise conditions.
- If the grantee fails to operate within 3 years from the date of permit approval, the bond shall be forfeited, and the franchise revoked.

Landing Facilities (Section 8):
- The grantee may use government-owned landing and airport facilities in the Philippines, subject to terms, conditions, restrictions, and national policy considerations.
- The Philippine Government has the right to use the grantee's landing and airport facilities in the Philippines.

Contracts (Section 9):
- The grantee is authorized to enter into transportation contracts with the Philippine Government, including carrying mail, upon mutually agreed terms and conditions.
- The grantee shall give preferential consideration to contracts with the Philippine Government.
- The grantee may enter into transportation, maintenance, servicing, and other contracts related to air transport with other foreign-owned airlines, particularly those with international routes.

Right of Government (Section 10):
- The President of the Philippines has the right to temporarily take over, operate, suspend operations, or authorize temporary use of the grantee's facilities or equipment during times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order, in the interest of public safety, security, and welfare, upon due compensation to the grantee.

Warranty in Favor of National and Local Governments (Section 11):
- The grantee shall hold the national, provincial, city, and municipal governments harmless from all claims, demands, or actions arising out of accidents or injuries caused by the operation of services under the franchise.

Sale, Lease, Transfer, Usufruct, Etc. (Section 12):
- The grantee shall not lease, transfer, grant usufruct, sell, assign, or merge the franchise or rights acquired thereunder to any person, firm, company, corporation, or other entity without prior approval from the Congress of the Philippines.
- Any entity to which the franchise is sold, transferred, or assigned shall be subject to the same conditions, terms, restrictions, and limitations of this Act.

Dispersal of Ownership (Section 13):
- In accordance with the constitutional provision to encourage public participation in public utilities, the grantee shall offer at least 30% of its outstanding capital stock, or a higher percentage as may be provided by law, in any securities exchange in the Philippines within 5 years from the commencement of its operations.
- Non-compliance shall render the franchise ipso facto revoked.

Interpretation of Franchise (Section 14):
- This franchise shall not be interpreted as an exclusive grant of the privileges provided herein.
- If any competing individual, partnership, or corporation receives a similar permit or franchise with more favorable terms or provisions that place the grantee at a disadvantage, then such terms and provisions shall be deemed part of this franchise and shall operate equally in favor of the grantee.

Separability Clause (Section 15):
- If any section or provision of this Act is held invalid, all other provisions not affected shall remain valid.

Repealability and Non-exclusivity Clause (Section 16):
- This franchise shall be subject to amendment, alteration, or repeal by the Congress of the Philippines when the public interest so requires, and shall not be interpreted as an exclusive grant of the privileges provided herein.

Reportorial Requirement (Section 17):
- The grantee shall submit an annual report to the Congress of the Philippines on its compliance with the terms and conditions of the franchise and on its operations within 60 days from the end of every year.

Effectivity Clause (Section 18):
- This Act shall take effect 15 days from the date of its publication, upon the initiative of the grantee, in at least two newspapers of general circulation in the Philippines.