Renewing for Another 25 Years the Franchise Granted to Air Philippines Corp.
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Renewing for Another 25 Years the Franchise Granted to Air Philippines Corp.
Republic Act No. 11682
April 11, 2022
Case Overview and Summary
Summary of Republic Act No. 11682:Nature and Scope of Franchise (Section 1):
- Renews the franchise granted to Air Philippines Corporation (doing business as AirPhil Express, PAL Express, and Philippine Airlines) for 25 years.
- Allows the operation of domestic and international air transport services for passengers, mail, goods, and property.
- Permits the maintenance of hangars, aircraft service stations, and other auxiliary facilities.
- Allows the construction and operation of wireless communication facilities for air navigation.
Authority of CAB and CAAP (Section 2):
- Requires appropriate certificates, permits, and licenses from the Civil Aeronautics Board (CAB) and Civil Aviation Authority of the Philippines (CAAP).
- Mandates compliance with airworthiness, crew licensing, equipment, and operational regulations of CAAP and other regulatory bodies.
- Subjects equipment and operations to inspection and regulation by CAAP.
Responsibility to the Public (Section 3):
- Requires the maintenance of scheduled, non-scheduled, or chartered air transport services within and outside the Philippines, subject to traffic needs.
- Mandates that at least 25% of all frequencies shall be for the domestic market.
Rates for Services (Section 4):
- Allows the Grantee to fix just and reasonable rates for transportation services, subject to CAB and other regulatory agencies' approval.
Term of Franchise (Section 5):
- The franchise is valid for 25 years from the effectivity of the Act, unless revoked or cancelled earlier.
- The franchise shall be deemed revoked if the Grantee fails to operate continuously for 2 years.
Landing Facilities (Section 6):
- Allows the Grantee to use government-owned landing and airport facilities in the Philippines, subject to national policy considerations and terms imposed by the government.
- Grants the government the right to use the Grantee's landing and airport facilities in the Philippines.
Contracts (Section 7):
- Authorizes the Grantee to enter into transportation contracts with the Philippine government, including mail carrying.
- Requires the Grantee to give preferential consideration to contracts with the Philippine government.
- Allows the Grantee to enter into transportation, maintenance, or servicing contracts with other foreign-owned airlines.
Right of the Government (Section 8):
- Reserves the President's right to temporarily take over, suspend, or authorize the temporary use of the Grantee's facilities or equipment during times of war, public peril, calamity, emergency, disaster, or disturbance of peace and order, with due compensation.
Warranty in Favor of National and Local Governments (Section 9):
- Requires the Grantee to hold the national, provincial, city, and municipal governments free from claims, liabilities, demands, or actions arising out of accidents causing injury or damage during operations.
Commitment to Provide Employment Opportunities (Section 10):
- Mandates the Grantee to create employment opportunities and accept on-the-job trainees, with priority given to residents of the Grantee's principal office location.
- Requires compliance with applicable labor standards and allowance entitlements.
- Mandates the reflection of employment opportunities in the General Information Sheet submitted to the Securities and Exchange Commission annually.
Sale, Lease, Transfer, Grant of Usufruct, or Assignment of Franchise (Section 11):
- Prohibits the sale, lease, transfer, grant of usufruct, or assignment of the franchise or rights and privileges without prior approval from Congress.
- Requires informing Congress within 60 days after any such transaction.
- Failure to report shall render the franchise revoked.
- Any transferee shall be subject to the same conditions, terms, restrictions, and limitations.
Dispersal of Ownership (Section 12):
- Requires the Grantee to offer at least 30% of its outstanding capital stocks to Filipino citizens in a securities exchange in the Philippines within 5 years from the effectivity of the Act.
- Noncompliance shall render the franchise revoked.
Reportorial Requirement (Section 13):
- Mandates the submission of an annual report to Congress on compliance with franchise terms and conditions, operations, audited financial statements, GIS, CAB and CAAP certifications, and ownership dispersal update.
- Requires a reportorial compliance certificate from Congress before any application for permit or certificate is accepted by CAB and CAAP.
Fine (Section 14):
- Imposes a fine of P500.00 per working day of non-submission of the annual report to Congress, remitted to the Bureau of the Treasury.
Equality Clause (Section 15):
- Grants the Grantee any more favorable terms or provisions received by competing individuals, partnerships, or corporations.
Repealability and Non-exclusivity Clause (Section 16):
- Allows amendment, alteration, or repeal of the franchise by Congress when the public interest requires.
- The franchise shall not be interpreted as an exclusive grant of privileges.
Separability Clause (Section 17):
- Provides that if any section or provision is held invalid, all other valid provisions shall remain in effect.
Repealing Clause (Section 18):
- Repeals, amends, or modifies all laws, decrees, orders, resolutions, instructions, rules and regulations, and other issuances inconsistent with the Act.
Effectivity (Section 19):
- The Act shall take effect 15 days after its publication in the Official Gazette or a newspaper of general circulation.
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Statutes
Republic Acts
Air Philippines Corporation
AirPhil Express
PAL Express
Philippine Airlines
air transport services
franchise renewal
domestic and international routes
Civil Aeronautics Board
Civil Aviation Authority of the Philippines
rates and charges
landing facilities
government contracts
employment opportunities
ownership dispersal
reportorial requirements
fines
equality clause
repealability and non-exclusivity
Law
Renewing for Another 25 Years the Franchise Granted to Air Philippines Corp.
Republic Act No. 11682
•April 11, 2022
April 11, 2022
REPUBLIC ACT NO. 11682
AN ACT RENEWING FOR ANOTHER TWENTY-FIVE (25) YEARS THE FRANCHISE GRANTED TO AIR PHILIPPINES CORPORATION, DOING BUSINESS UNDER NAME AND STYLE OF AIRPHIL EXPRESS, PAL EXPRESS, AND PHILIPPINE AIRLINES, UNDER REPUBLIC ACT NO. 8339, AS AMENDED BY REPUBLIC ACT NO. 9215, ENTITLED "AN ACT GRANTING AIR PHILIPPINES CORPORATION (AIR PHILIPPINES) A FRANCHISE TO ESTABLISH, OPERATE AND MAINTAIN DOMESTIC AND INTERNATIONAL AIR TRANSPORT SERVICES"
SECTION 1. Nature and Scope of Franchise. — Subject to the provisions of the Constitution and applicable laws, rules and regulations, the franchise granted to AIR PHILIPPINES CORPORATION, doing business under name and style of AIRPHIL EXPRESS, PAL EXPRESS, and PHILIPPINE AIRLINES, hereunder referred to as the Grantee, its successors or assignees, under Republic Act No. 8339, as amended by Republic Act No. 9215, to establish, operate and maintain transport services for the carriage of passengers, mails, goods, and property by air, both domestic and international, is hereby renewed for another twenty-five (25) years.
Air transport services shall include the maintenance and operation of hangars...
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