Regulatory framework

Regulators and primary legislation

Which bodies regulate aviation in your country? Under what basic laws?

The Civil Aviation Authority of the Philippines (CAAP) regulates the technical, operational, safety and security aspects of aviation and maintains the sole registry for aircraft and liens, other interests in aircraft or aircraft engines. The CAAP issues the air operator certificate to air carriers and the certificate of airworthiness for aircraft. The Civil Aeronautics Board (CAB) regulates the economic aspects of air transportation. The CAB issues the administrative franchise for domestic carriers (ie, certificate of public convenience and necessity) and the foreign air carrier’s permit of foreign air carriers.

Aviation operations

Safety regulations

How is air transport regulated in terms of safety?

The director general of Civil Aviation Authority of the Philippines (CAAP) prescribes rules, regulations and minimum standards governing practices, methods and procedures for civil aviation. The director general has the power to issue:

  • airmen certificates to individuals who possess the proper qualifications for, and are physically able to, perform the duties pertaining to the position for which the airmen certificate is sought;
  • airworthiness certificates for Philippine-registered aircraft, after it is found that the aircraft conforms with the appropriate type of certificate, and is in a condition allowing for safe operation; and
  • air operator certificates to air carriers that are properly and adequately equipped and have demonstrated the ability to conduct safe operations.

What safety regulation is provided for air operations that do not constitute public or commercial transport, and how is the distinction made?

The safety regulations for both commercial and non-commercial air transport are contained in the Philippines Civil Aviation Rules (PCAR) promulgated by the CAAP.

The same rules under the PCAR governs the safety regulations as regards aircraft instruments and equipment, and operations for commercial and non-commercial air transport except that certain provisions are only applicable for commercial operations such as the requirement for aircraft tracking, aural warning device, weather radar, forward-looking wind shear warning system, among others. The PCAR provides for specific requirements for obtaining the certificate to operate commercial air transport, which includes standards for the safety-management system.

Market access

How is access to the market for the provision of air transport services regulated?

A domestic air carrier must have:

  • a legislative franchise or a certificate of public convenience and necessity from the Civil Aeronautics Board (CAB); and
  • an air operator certificate from the Civil Aviation Authority of the Philippines (CAAP).

 

A foreign air carrier must have:

  • a foreign air carrier’s permit from the CAB; and
  • a foreign air operator certificate from the CAAP.
Ownership and control

What requirements apply in the areas of financial fitness and nationality of ownership regarding control of air carriers?

A domestic air carrier is a public utility and is thus subject to the nationality requirement that at least 60 per cent of its equity (including at least 60 per cent of its voting equity) should be owned by Philippine nationals. A foreign air carrier is not subject to this requirement and is allowed to engage only in foreign air transportation (ie, air transportation between the Philippines and any place outside it or wholly outside the Philippines).

The Civil Aeronautics Board requires domestic air carriers to have a minimum paid-up capital ranging from 25 million pesos (for carriers with domestic non-scheduled flights) to 150 million pesos (for carriers with domestic and international scheduled flights). Foreign air carriers must have paid-in equity capital of at least the equivalent of US$200,000.

Licensing

What procedures are there to obtain licences or other rights to operate particular routes?

A person or entity wishing to engage in air transport in the Philippines (including on specific routes) must submit an application to the Civil Aeronautics Board (CAB), together with the required documentation.

What procedures are there for hearing or deciding contested applications for licences or other rights to operate particular routes?

All affected air operators are notified of the application for an air carrier’s permit and may enter its objection to the application by appearing in the hearing of such application before the CAB.

Competition policy

Is there a declared policy on airline access or competition? What is it?

The Constitution prohibits and protects Filipino enterprises against unfair competition.

As a state policy, the Civil Aeronautics Board is mandated to promote competition between air carriers to the extent necessary to assure the sound development of an air transportation system properly adapted to the need of the foreign and domestic commerce of the Philippines.

Moreover, 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 anticompetitive agreements and the abuse of entities of their dominant position by engaging in conduct that would substantially prevent, restrict or lessen competition. The Philippine Competition Commission (PCC), the agency tasked to administer the local competition law, is currently looking into airport slot allocation and code-sharing as potential competition concerns. Based on a study commissioned by the PCC, the slot allocation in the Ninoy Aquino International Airport is based on historical allocation and the capacity of the airport to handle aircraft movements, giving incumbents an advantage over new players as they have some history of operation.

Requirements for foreign carriers

What requirements must a foreign air carrier satisfy to operate in your country?

A foreign air carrier must have:

  • a foreign air carrier’s permit from the Civil Aeronautics Board; and
  • a foreign air operator certificate from the Civil Aviation Authority of the Philippines.
Public service obligations

Are there specific rules in place to ensure aviation services are offered to remote destinations when vital for the local economy?

There are no specific public service obligations on air carriers.

Charter services

How are charter services specifically regulated?

Economic Regulation 2, which was issued by the Civil Aeronautics Board, specifically regulates both domestic and international charter services. It provides rules and regulations regarding authorisation for:

  • charter trips;
  • the amount of charter trips that may be performed;
  • charter agreements; and
  • applicable tariffs.
Regulation of airfares

How are airfares regulated?

The CAB has the power to fix and determine reasonable individual, joint or special rates, charges or fares that an air carrier may demand, collect or receive for any service in connection with air commerce.

Drones

How is the operation of unmanned aircraft systems (drones) regulated?

The Civil Aviation Authority of the Philippines:

  • requires prior authorisation for persons planning to conduct remotely piloted aircraft flying displays or air shows;
  • prohibits the flying of drones over airports and no-fly zones; and
  • provides guidelines on remotely piloted aircrafts controller and operator certificates.

Aircraft

Aircraft register

Who is entitled to be mentioned in the aircraft register? What requirements or limitations apply to the ownership of an aircraft listed on your country’s register?

The owner or operator of the aircraft (as the case may be) is entitled to be mentioned in the aircraft register.

Republic Act No. 9497 (the CAAP Law) provides that, except as otherwise provided in the Constitution and existing treaty or treaties, no aircraft shall be eligible for registration in the Philippines unless it is owned by or leased to a citizen of the Philippines or corporations or associations organised under the laws of the Philippines at least 60 per cent of whose capital is owned by Filipino citizens.

Thus, the nationality of the owner or the operator is the principal factor in determining which entity will be issued the Filipino certificate of registry. The owner of the aircraft (if not qualified to be the entity named in the aircraft registry) may still record its interest in the aircraft register and cause the annotation of the Filipino certificate of registry to reflect such interest.

Mortgage register

Is there a register of aircraft mortgages or charges? How does it function?

Yes. The Civil Aviation Authority of the Philippines (CAAP) maintains the aircraft registry in which conveyances affecting title to or interest (including mortgage, encumbrances and other interests) over Philippine-registered aircraft may be recorded.

To register a security interest over the aircraft with the authority, the security document must be filed and recorded in the authority registry and annotated on the rear portion of the certificate of registration.

In 2018, Republic Act No. 11057, otherwise known as the Personal Property Security Act (PPSA), took effect. The PPSA is intended to establish a unified and modern legal framework for securing obligations with personal property and states that it shall apply to all transactions of any form that secure an obligation with movable collateral, except interests in aircraft subject to the CAAP Law and interests in ships subject to the Ship Mortgage Decree of 1978. However, the PPSA expressly repealed the provisions of the Chattel Mortgage Law, which is the legal framework used for creation and enforcement of aircraft mortgages. The CAAP Law merely provides for the registration of aircraft interests with the CAAP registry and the PPSA and its implementing rules and regulations do not clarify if only the creation and perfection of security interest over aircraft are excluded from the coverage of the PPSA. There is a position that the creation and enforcement of security interest over aircraft should be governed by the PPSA, while its registration requirements should continue to be governed by the CAAP Law. Given that the PPSA is a new law, such position is not free from doubt.

Detention

What rights are there to detain aircraft, in respect of unpaid airport or air navigation charges, or other unpaid debts?

The Civil Code of the Philippines recognises possessory liens in respect of claims for the unpaid price of movables sold and in respect of credits for the making, repair, safekeeping or preservation of personal property. These liens apply to an aircraft. 

Moreover, Philippine tax authorities may also distrain or sell an aircraft for failure to pay Philippine taxes. Philippine customs authorities may likewise sell an aircraft for failure to pay customs duties, fees, charges or fines, or for carriage of smuggled or contraband goods, unless that aircraft is used as a duly authorised common carrier.

The Director General of the Civil Aviation Authority of the Philippines (CAAP) has the power to impose liens on aircraft and machinery if the charges and other fees of CAAP are not paid in full on due date or any part of the charges or the late payment penalty thereto remains unpaid; and in the case of failure to pay administrative fines arising from the violation of any rules and regulations promulgated by the CAAP. Properties and assets levied upon may be sold and the proceeds thereof shall be applied to the satisfaction of the obligation after due notice and hearing.

Under Executive Order 903, the Manila International Airport Authority (MIAA) (the government agency responsible for the management of the Ninoy Aquino International Airport and which is empowered to levy and collect dues, charges, and fees or concessions), or any service provided by the MIAA, may also on its own authority detain any aircraft, equipment, or furniture belonging to the owner or agent of said aircraft, until such amounts have been paid.

Maintenance

Do specific rules regulate the maintenance of aircraft? What are they?

Part 8 of the Philippines Civil Aviation Rules (PCAR) requires continuous airworthiness maintenance inspection and provides for other aircraft safety and maintenance requirements. The registered owner or operator of an aircraft is responsible for maintaining that aircraft in an airworthy condition, including compliance with all airworthiness directives. No person may perform maintenance, preventive maintenance, or alterations on an aircraft other than in compliance with PCAR.

A person may operate a civil aircraft only if it is airworthy. Furthermore, no person may operate an aircraft unless it is equipped with the required instruments and navigation equipment determined by the authorities to be appropriate to the type of flight operations conducted. Each pilot-in-command must determine whether an aircraft is in a safe condition for flight.

Air carriers must use continuous airworthiness maintenance inspection programmes for the inspection of the aircraft.

Airports

Ownership

Who owns the airports?

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 per cent of whose capital is owned by Filipino citizens.

Licensing

What system is there for the licensing of airports?

Aerodrome or airport operations are regulated by the Civil Aviation Authority of the Philippines (CAAP) through the Manual of Standards for Aerodromes and the Civil Aviation Regulations governing Aerodromes. Aerodrome operators are required to comply with the standards, practices and procedures that are required under the manual, as appropriate to the operations conducted at the aerodrome and the requirements for aircraft using the aerodrome.

The CAAP, however, may exempt an aerodrome operator from compliance with specified provisions of the CAR or the manual, taking into account any relevant considerations relating to the safety of air navigation.

 

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 Civil Aviation Authority of the Philippines 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 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.

Economic regulation

Is there a system of economic regulation of airports? How does it function?

The Civil Aviation Authority of the Philippines 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.

Access

Are there laws or rules restricting or qualifying 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 Civil Aviation Authority of the Philippines, 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.

Slot allocation

How are slots allocated at congested airports?

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.

Ground handling

Are there any laws or rules specifically relating to ground handling. What are they?

Ground-handling services are also subject to regulation by the Civil Aviation Authority of the Philippines (CAAP). Ground-handling personnel must obtain licences from the authority’s licensing division by undergoing knowledge and skills examinations.

The Philippine Securities and Exchange Commission has opined that ground-handling services (as defined CAAP Advisory Circular No. 09-007) constitute an operation of a public utility, thus the 40 per cent maximum foreign equity in public utilities apply to companies involved in ground handling.

Air traffic control

Who provides air traffic control services? And how are they regulated?

The Air Traffic Service of the Civil Aviation Authority of the Philippines provides air traffic control services implementing international standards.

Liability and accidents

Passengers, baggage and cargo

What rules apply in respect of death of, or injury to, passengers or loss or damage to baggage or cargo in respect of domestic carriage?

The liability of air carriers is governed by the Civil Code and the Convention for the Unification of Certain Rules for International Carriage by Air (Montreal Convention).

Common carriers, including air carriers, are bound to observe extraordinary diligence in the vigilance over goods and for the safety of the passengers transported by them.

A common carrier is bound to carry passengers safely as far as human care and foresight can provide, using the utmost diligence of cautious persons, with a due regard for all circumstances.

In the case of death or injury to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they can prove that they observed extraordinary diligence.

Surface damage

Are there any special rules about the liability of aircraft operators for surface damage? What are they?

We are unaware of any special rules about the liability of aircraft operators for surface damage. Generally, our Civil Code prescribes that whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. The Philippines is also a signatory to the Convention on Damage Cause by Foreign Aircraft to Third Parties on the Surface, otherwise known as the 1952 Rome Convention.

Accident investigation

What system and procedures are in place for the investigation of air accidents?

The investigation into accidents commences on the appointment of investigators and advisers by the chair of the Aircraft Accident Investigation and Inquiry Board under the Office of the Director General of the Civil Aviation Authority of the Philippines (CAAP). Where the chair of the Aircraft Accident Investigation and Inquiry Board is of the opinion that it would be desirable for public notice to be given that an investigation is taking place, he or she may do so in a manner that he or she thinks fit. 

Aircraft accident investigations are private. The extent of investigations and the procedure to be followed is determined by the chair, taking into account the purpose of the investigation, the principles and objectives of International Civil Aviation Organisation (ICAO) and the lessons that the chair expects to draw from the accident or incident for the improvement of safety. If in the course of an investigation it becomes known or is suspected that an act of unlawful interference was involved in the accident or incident, the investigator-in-charge will, after consultation with the chair and the CAAP: immediately inform the Philippine national police; or take steps to ensure that the aviation security authorities of other concerned ICAO contracting states are informed of the fact.

Accident reporting

Is there a mandatory accident and incident reporting system? How does it operate?

The operator of any Philippine-registered civil aircraft, any state aircraft not operated by the military or any foreign aircraft must immediately and by the most expeditious means available notify the chairman of the Aircraft Accident Investigation and Inquiry Board under the Office of the Director General of the Civil Aviation Authority of the Philippines when an aircraft accident or incident listed in Implementing Standards (IS) 13.030, IS 13.175-1 to IS 13.175-3 occurs. This initial notification requirement also applies when an aircraft is overdue and is believed to have been involved in an accident.

Competition law

Competition law

Do sector-specific or general competition rules apply to aviation?

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 Competition Act prohibits anticompetitive agreements and the abuse of entities of their dominant position by engaging in conduct that would substantially prevent, restrict or lessen competition.

Regulator

Is there a sector-specific regulator, or are competition rules applied by the general competition authority?

The Philippine Competition Commission is mandated to implement the national competition policy and enforce the Philippine Competition Act.

The Civil Aeronautics Board (CAB), to some extent, also enforces competition-related regulations. Under Republic Act No. 776, as amended, one of the policies of the CAB is the promotion of ‘[c]ompetition between air carriers to the extent necessary to assure the sound development of an air transportation system properly adapted to the need of the foreign and domestic commerce of the Philippines’. In fixing reasonable charges or fares, which an air carrier may demand or collect in connection with air commerce, the CAB shall approve fares that are not unduly preferential or discriminatory.

Market definition

How is the relevant market for the purposes of a competition assessment in the aviation sector defined by the competition authorities?

The Competition Act defines ‘relevant market’ as the market in which a particular good or service is sold and that is a combination of the relevant product market and the relevant geographic market, defined as follows:

  • A relevant product market comprises all goods and services that are regarded as interchangeable or substitutable by the consumer or the customer, by reason of the goods and services’ characteristics, their prices and their intended use; and
  • The relevant geographic market comprises the area in which the entity concerned is involved in the supply and demand of goods and services, in which the conditions of competition are sufficiently homogenous and which can be distinguished from neighbouring areas because the conditions of competition are different in those areas.
Code-sharing and joint ventures

How have the competition authorities regulated code-sharing and air-carrier joint ventures?

Under the Competition Act, each party to a joint venture agreement must notify the Philippine Competition Commission (PCC) within 30 days from the signing of 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 2.2 billion pesos; or
  • the gross revenues generated in the Philippines by assets to be combined in the Philippines or contributed into the proposed joint venture exceed 2.2 billion pesos.

 

In determining the assets of the joint venture, the following should be included:

  • all assets that an 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 that an entity contributing to the formation has agreed to extend or guarantee, at any time.

 

The PCC issued Guidelines on the Notification of Joint Ventures.

The PCC, the agency tasked to administer the local competition law, is currently looking into code-sharing as potential competition concern. To date, the PCC has yet to issue guidelines regulating code-sharing.

Assessing competitive effect

What are the main standards for assessing the competitive effect of a transaction?

In determining whether a merger or acquisition has an anticompetitive impact, the Philippine Competition Commission shall:

  • define the relevant market allegedly affected by the anticompetitive agreement or conduct;
  • determine if there is actual or potential adverse impact on competition in the relevant market caused by the alleged agreement or conduct, and if such impact is substantial and outweighs the actual or potential efficiency gains that result from the agreement or conduct;
  • adopt a broad and forward-looking perspective, recognising future market developments, any overriding need to make the goods or services available to consumers, the requirements of large investments in infrastructure, the requirements of law, and the need of our economy to respond to international competition, but also taking account of past behaviour of the parties involved and prevailing market conditions;
  • balance the need to ensure that competition is not prevented or substantially restricted and the risk that competition efficiency, productivity, innovation, or development of priority areas or industries in the general interest of the country may be deterred by overzealous or undue intervention; and
  • assess the totality of evidence on whether it is more likely than not that the entity has engaged in anticompetitive agreement or conduct including whether the entity’s conduct was done with a reasonable commercial purpose such as but not limited to phasing out of a product or closure of a business, or as a reasonable commercial response to the market entry or conduct of a competitor.

 

In general, the Competition Act prohibits anticompetitive agreements or those that substantially prevent, restrict or lessen competition, which can either be horizontal (between two or more competitors) or vertical (between two or more entities at a different level of distribution or production) such as price-fixing, bid-rigging, output limitation and market sharing.

Remedies

What types of remedies have been imposed to remedy concerns identified by the competition authorities?

The Competition Act provides for the following non-adversarial remedies:

 

Binding ruling

Where no prior complaint or investigation has been initiated, any entity that is in doubt as to whether a contemplated act, course of conduct, agreement or decision, is in compliance with, is exempt from, or is in violation of any of the provisions of the Competition Act, other competition laws, or implementing rules and regulations thereof, may request the Philippine Competition Commission (PCC), in writing, to render a binding ruling thereon, provided that the ruling is for a specified period, subject to extension as may be determined by the PCC and based on substantial evidence.

 

Consent order

At any time prior to the conclusion by the PCC of its inquiry, any entity under inquiry may, without in any manner admitting a violation of the Competition Act or any other competition laws, submit to the PCC a written proposal for the entry of a consent order, specifying therein the terms and conditions of the proposed consent order, which shall include among others the following:

  • The payment of an amount within the range of fines provided for under the Competition Act;
  • The required compliance report as well as an entity to submit regular compliance reports;
  • Payment of damages to any private party/parties who may have suffered injury; and
  • Other terms and conditions that the PCC deems appropriate and necessary for the effective enforcement of the Competition Act or other competition laws.

 

Provided, that a consent order shall not bar any inquiry for the same or similar acts if continued or repeated.

 

Forbearance

The PCC, sua sponte or upon application, prior to its initiation of an inquiry, may forbear from applying the provisions of the Competition Act and its implementing rules and regulations, for a limited time, in whole or in part, in all or specific cases, on an entity or group of entities, if in its determination: enforcement is not necessary to the attainment of the policy objectives of the Competition Act; forbearance will neither impede competition in the market where the entity or group of entities seeking exemption operates nor in related markets; forbearance is consistent with public interest and the benefit and welfare of the consumers; and forbearance is justified in economic terms, provided, that forbearance will be granted for a maximum period of one year. Any extension to the period will have to be expressly approved by the PCC. Any extension of the duration of an exemption shall not be longer than one year.

For mergers and acquisition, there are two types of remedies that the PCC may consider: structural remedies and behavioural remedies. Structural remedies are measures that directly alter market structure and address issues that give rise to competition problems, while behavioural remedies are measures that directly alter the behaviour of an entity. The PCC may also impose behavioural remedies to prevent a merged entity to behave anticompetitively. Structural remedies may also be supported by behavioural remedies.

Financial support and state aid

Rules and principles

Are there sector-specific rules regulating direct or indirect financial support to companies by the government or government-controlled agencies or companies (state aid) in the aviation sector? Is state aid regulated generally?

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. The Philippine House of Representatives has also approved a bill – the second package of the Tax Reform for Acceleration and Inclusion Law – that will gradually lower the corporate income tax rate and rationalise tax incentives. This bill could affect the aviation industry since, if passed into law, it would amend the tax incentives of the domestic airlines under their respective franchises.

What are the main principles of the state aid rules applicable to the aviation sector?

Not applicable.

Exemptions

Are there exemptions from the state aid rules or situations in which they do not apply?

Not applicable.

Clearance of state aid

Must clearance from the competition authorities be obtained before state aid may be granted? What are the main procedural steps for doing so?

Not applicable.

Recovery of unlawful state aid

If no clearance is obtained, what procedures apply to recover unlawfully granted state aid?

Not applicable.

Consumer protection

Passengers

What rules regulate denied boarding, cancellation or (tarmac) delay?

Economic Regulation 7, issued by the Civil Aeronautics Board, provides for:

  • a denied boarding procedure;
  • compensation; and
  • exceptions to liability for denied boarding compensation.

 

In general, air carriers must pay compensation at specified rates to passengers which:

  • hold confirmed reserved space;
  • have presented themselves for carriage at the proper time and place and have fully complied with the carrier’s check-in and reconfirmation procedures;
  • are acceptable for carriage under the carrier’s tariff; and
  • have been denied boarding due to lack of space.

 

If accepted by the passenger, such compensation should constitute liquidated damages for all damages incurred by the passenger as a result of the carrier’s failure to provide the confirmed space. The passenger must, in addition to the damages, have priority booking for the next available flight using the same ticket for which he or she was denied boarding.

Package holidays

What rules apply to the sale of package holiday products?

Economic Regulation 9 on the bill of rights for air passengers and carrier obligations provides for:

  • the right of passengers to clear and non-misleading advertisements;
  • the right to full, fair and clear disclosure of services offered by carriers; and
  • the right against misleading and fraudulent sales promotion practices. 

 

Accordingly, all sales promotion campaigns and air carrier activities must be carried out with honesty, transparency and fairness, and in accordance with the requirements of the Republic Act 7394, as amended (the Consumer Act of the Philippines).

Other consumer legislation

Is there any other aviation-specific consumer legislation?

The Civil Aeronautics Board prescribed rules on compassionate fare or discounted fare for domestic flights to be made available by air carrier companies for those who are booking last minute flights due to the death of a loved one.

Insurance and security

Insurance for operators

What mandatory insurance requirements apply to the operation of aircraft?

Aircraft used in air carrier operations must have a valid insurance policy covering:

  • the aircraft hull;
  • each person, freight item and any mail onboard; and
  • liability in favour of third parties.

 

In the absence of these requirements, the aircraft cannot be operated.

Aviation security

What legal requirements are there with regard to aviation security?

When the airline or air carrier issues a ticket to a passenger, a condition stating that the ‘[The] holder hereof and his hand-carried luggage are subject to search for, and seizure of, prohibited materials or substances. Holder refusing to be searched shall not be allowed to board the aircraft’, must be printed in the ticket. Airline companies that operate as public utilities or operators of aircraft are authorised to open and investigate suspicious packages and cargoes in the presence of the owner or shipper or authorised representatives. It can refuse the loading of the same if any of the persons mentioned above refuses to have such packages and cargoes opened and inspected.

Serious crimes

What serious crimes exist with regard to aviation?

Republic Act No. 6235 punishes any person who shall compel a change in the course or destination of an aircraft of Filipino registry, or to seize or usurp the control thereof, while it is in flight. It also punishes any person who shall compel an aircraft of foreign registry to land in Filipino territory or shall seize or usurp the control thereof while it is within the Filipino territory.

It is also unlawful to ship, load or carry in any passenger aircraft operating as a public utility within the Philippines, any explosive, flammable, corrosive or poisonous substance or material. The shipping, loading or carrying of any explosive in any cargo aircraft operating as a public utility within the Philippines should be in accordance with regulations issued by the Civil Aeronautics Board.

Update and trends

Emerging trends

Are there any emerging trends or hot topics in air transport regulation in your jurisdiction?

Other than the enactment of the Personal Property Security Act, we are not aware of any other hot topics in air transport regulation in the Philippines.

Law stated date

Correct on:

Give the date on which the above content is accurate.

20 January 2020