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What rules govern the ownership of airports (both public and private)?
An airport intended for public use is a property of public dominion under the Civil Code and thus belongs to the state.
An owner of an airport used for private operations must be a Filipino citizen or a corporation or association organised under Filipino law, at least 60% of whose capital is owned by Filipino citizens.
What is the authorisation procedure for the operation of airports?
Aerodrome certificate An aerodrome or airport (ie, a defined area of land (including any buildings, installations and equipment) intended to be used either wholly or in part for the arrival, departure and surface movement of aircraft) may be operated only by a person that holds a valid certificate issued by Philippines Civil Aviation Authority for that aerodrome if it is used for:
- any international air transportation operation; or
- any national air transportation operation that is conducted using aircraft certified for more than 30 passenger seats.
A person may apply to the authority for an aerodrome certificate in order to operate an aerodrome at the place specified in the application. The authority may grant either:
- a temporary or interim aerodrome certificate, which is valid for six months; or
- a final or permanent aerodrome certificate.
Permit to operate Operators of airstrips or heliports conducting air transport operations or private operations using aircraft with fewer than 10 passenger seats must secure a permit to operate.
What ongoing operating requirements apply (including obligations relating to safety, security and facilities maintenance)?
The Civil Aviation Regulations Governing Aerodromes require aerodrome operators to comply with standards and procedures for aerodromes used in air transport operations set out in the Manual of Standards for Aerodromes.
Operating procedures are minimum arrangements required of the aerodrome operator to ensure the safe operation of the aerodrome, including:
- the appointment of a reporting officer duly signed by a heliport operator with corresponding duties and responsibilities;
- aerodrome serviceability inspection;
- reporting procedures;
- emergency arrangements (eg, response times and exercises);
- coordination with air traffic control (if applicable); and
- training of safety personnel.
What airport charges apply and how are they regulated?
The Philippines Civil Aviation Authority imposes and fixes reasonable charges and fees for the use of government aerodromes or air navigation facilities, and fixes the reasonable charges to be imposed in the use of privately owned air navigation facilities and aerodromes. Airport charges may include airport terminal fees and travel taxes.
What regulations govern access to airports?
No known laws restrict or qualify access to airports. Airport security regulations and procedures, which may restrict or qualify access to airports to a certain extent, are determined and implemented by each airport authority.
In addition, the Philippines Civil Aviation Authority, in coordination with the appropriate government agency tasked to provide airport security, is empowered to prescribe reasonable regulations, methods and procedures to ensure the safety of passengers and property.
What regime governs the allocation of airport slots (including slot transfer, revocation and disputes)?
Slots are allocated at airports using the Communication Navigation Surveillance System and the Air Traffic Management System.
The systems are communication, navigation and surveillance systems employing digital technologies, including satellite systems, together with various levels of automation, applied in support of a seamless global air-traffic management system.
How are ground handling services regulated?
Ground handling services are also subject to regulation by the Philippines Civil Aviation Authority. Ground handling personnel must obtain licences from the authority’s licensing division by undergoing knowledge and skills examinations.
Do any sector-specific competition regulatory/legal provisions apply to the aviation industry in your jurisdiction?
The Constitution prohibits and protects Filipino enterprises against unfair competition. However, there are no sector-specific competition rules that apply to aviation.
That said, general penal provisions in the Revised Penal Code punish any act that restrains free competition in the market. Further, the Republic Act 10667 (the Competition Act) prohibits anti-competitive agreements and the abuse of entities of their dominant position by engaging in conduct that would substantially prevent, restrict or lessen competition.
Code sharing and joint ventures
What (if any) competition concerns arise in relation to code sharing and air carrier joint ventures?
Under the Competition Act, each party to a joint venture agreement must notify the Competition Commission before signing the definitive agreement if:
- the aggregate value of the assets that will be combined in the Philippines or contributed into the proposed joint venture exceeds Ps1 billion; or
- the gross revenues generated in the Philippines by assets to be combined in the Philippines or contributed into the proposed joint venture exceed Ps1 billion.
In determining the assets of the joint venture, the following should be included:
- all assets which any entity contributing to the formation of the joint venture has agreed to transfer, or for which agreements have been secured for the joint venture to obtain at any time, whether or not such entity is subject to the requirements of the act; and
- any amount of credit or any obligations of the joint venture which any entity contributing to the formation has agreed to extend or guarantee, at any time.
The Competition Act is fairly new, and while no specific concerns have been raised with respect to code sharing, the act prohibits anti-competitive agreements and the abuse of dominant position by engaging in conduct that would substantially prevent, restrict or lessen competition.
What rules govern state aid in the aviation industry? Do any exemptions apply?
No sector-specific rules regulate direct or indirect financial support to companies in the aviation sector.
However, tax benefits may be granted to airlines operating under congressional franchise. These include tax benefits relating to the importation of aircraft, equipment and machinery, spare-part commissary and catering supplies, aviation fuel and oil and such other articles imported by and for the use of airlines operating under a congressional franchise. Moreover, all rentals, interest, fees and other charges paid by the franchisee to foreign or domestic lessors for the lease of aircraft, engines, spare parts, other flight or ground equipment and other personal property may be exempt from all taxes, provided that the liability for the payment of said taxes is assumed by the franchisee.
Have there been any notable recent cases or rulings involving competition in the aviation industry?
No recent cases or rulings involve competition in the aviation industry.
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