CIVIL AVIATION LAW

TRANSPORTATION LAW
BRIEF HISTORY:
The First flight was in February 1911 by James Mars while the first crosscountry flight was by Thomas C. Baldwin in the same month. It was in 1919 when
the first airline was organized by Joseph E. H. Stevenot and Alfred C. Croft, The
Philippine Airways Service Inc.
Are airline companies common carriers?
YES,
in the case of Jose Mendoza v. Philippine Air Lines Inc., The Supreme Court
ruled that air transportation is clearly similar or analogous to land and water
transportation.
What is the TRUE TEST of whether one is a common carrier by air?
Whether he holds out that he will carry for hire, so long as he has room,
goods of everyone bringing goods to him for carriage, not whether he is carrying as
a public employment or whether he carries to a fixed place. (Jose Mendoza v.
Philippine Air Lines Inc.)
APPLICABLE LAWS:
1. The New Civil Code
2. RA 9497, Civil Aviation Authority Act of 2008 governs Civil Aviation.
3. RA 776 and the Regulations issued by The Civil Aeronautics Board governs the
economic regulation of air transportation.
4. Treaties and Conventions:
a. Warsaw Convention- applies to liabilities of the carriers in international
transportation by air.
b.

Chicago Convention

CIVIL AVIATION
Refers to the operation of any civil aircraft for the purpose of general aviation
operations, aerial work or commercial air transport operations.
AERONAUTICS/ AVIATION
- Refers to the Science and act of flight.
AIRCRAFT

any machine that can derive support in the atmosphere from the reactions of
the air other than the reactions of the air against the earth's surface.
under the same Act, it shall refer to Civil aircraft only and will not include
State or Public aircraft.
PHILIPPINE AIRCRAFT
- means an aircraft registered in the Philippines in accordance with the
requirements of the Civil Aviation Authority Act of 2008.
REGISTRATION OF AIRCRAFT
The Chicago Convention provides:
- That " The Aircraft have the nationality of the State in which they are registered."
Article 17 Chapter III
It also provides that every aircraft engaged in international air navigation
shall bear its appropriate nationality and registration marks.
- "An aircraft cannot be validly registered in more than one State , but its
registration may be changed from one State to another."
HOW ARE AIRCRAFTS REGISTERED?
Sec. 43 of The Civil Aviation Authority Act of 2008 states that the Authority shall:
a. Establish and maintain a system for the NATIONAL REGISTRATION of
aircraft in the Philippines.
b. Establish and maintain a system for the REGISTRATION OF LIENS,
MORTGAGES OR OTHER INTERESTS IN AIRCRAFT OR AIRCRAFT ENGINES; and
c. Have SOLE AUTHORITY to register aircraft and liens, mortgages or other
interests in aircraft or aircraft engines.
WHAT ARE THE REQUIREMENTS TO MAKE AN AIRCRAFT ELIGIBLE FOR
REGISTRATION?
GENERAL RULE:
1. The Aircraft is owned by or leased to a citizen or citizens of the Philippines or
corporations or associations organized under the laws of the Philippines at least
sixty per centum (60%) of whose capital is owned by Filipino citizens; and
2. The aircraft is not registered under the laws of any foreign country.

EXCEPTIONS:

Foreign- owned or registered aircraft may be registered if utilized by

members of aero clubs organized for recreation, sport or the development of
flying skills as a prerequisite to any aeronautical activities of such clubs within the
Philippine airspace.
APPLICATION FOR AIRCRAFT REGISTRATION:
Shall be made in writing, signed and sworn to by the owner or lessee of any
aircraft or aircraft engine eligible for registration.
-

Shall also state the following:

a. Date and Place of the filing

b. the specification, construction and technical description of the aircraft or

aircraft engine.
c. such other information as may be required by the Authority in such manner
and form as the Authority may prescribe by regulation.
ISSUANCE OF CERTIFICATE OF REGISTRATION

Should the DIRECTOR GENERAL upon considering the application for

registration, find the aircraft or aircraft engine eligible for registration, such aircraft
shall be registered under the provisions of this Act and the owner thereof shall be
issued a CERTIFICATE OF REGISTRATION.
NATIONALITY

An aircraft shall acquire Philippine nationality when registered pursuant to this Act.
REVOCATION

Any Certificate of registration may be revoked by the Authority for any cause
which renders the aircraft ineligible for registration.
STATE OF REGISTRY
-

refers to the State on whose register the aircraft is entered.

the Certificate of Registration issued by the CAAP shall be deemed

CONCLUSIVE evidence of nationality for international purposes.

AIRCRAFT CONVEYANCES
All aircraft conveyance of Philippine Registry shall be registered with the
Civil Aviation Authority of the Philippines (CAAP). Once the registration is
recorded it shall be valid against all persons and shall take effect from the
date of its record in the book of the Authority.
The requirements for registration are similar to the requirements in
Land Registration. The conveyance to be recorded shall state:
a. The interest in the aircraft of the person by whom such conveyance is
made or executed or in the case of a contract of conditional sale, the
interest of the vendor; and
b. The interest transferred by the conveyance.
(a)

The identifying description of the aircraft;

(b)

The names of the parties to the conveyance;

(c)

The date of the instrument and the date and time it is recorded;

The CAAP shall record the following in order:

(d)

The interest in the aircraft transferred by the conveyance;

(e)
If such conveyance is made as security for indebtedness, the amount and
date of maturity of such indebtedness; and
(f)
All particular estates, mortgages, liens, leases, orders and other
encumbrances and all decrees, instruments, attachments or entries affecting
aircraft and other matters properly determined under this Act.
AIR TRANSPORTATION
Air Commerce or Commercial Air Transport
4 Types of Commercial Air Transport:
a. Domestic Air Commerce- means and includes air commerce within the limits of
the Philippine territory.
b. Domestic Air Transport- means air transportation within the limits of the
Philippine territory.
4 Types of Commercial Air Transport:
c. Foreign Air Transport- refers to air transportation between the Philippines and
any place outside it or wholly outside the Philippines.
d. International Commercial Air Transport- the carriage by aircraft of persons
or property for remuneration or hire or the carriage of mail between any two (2) or
more countries.
WHO ARE THE PARTIES REGULATED BY THE CAAP?

AIR CARRIER OR OPERATOR- the one who undertakes, whether directly or

indirectly, or by a lease or any other arrangements, to engage in air transportation
services or air commerce.
Air Carriers may either be a Philippine Air Carrier or a Foreign Air
Carrier.
WHO ARE THE PARTIES REGULATED BY THE CAAP?
Philippine Air Carrier- an aircraft who is a citizen of the Philippines.
Foreign Air Carrier- means any operator, not being a Philippine air operator,
which undertakes, whether directly or indirectly or by lease or any other
arrangement, to engage in commercial air transport operations within borders or
airspace of the Philippines, whether on a scheduled or chartered basis.
WHO ARE THE PARTIES REGULATED BY THE CAAP?
Airman- individual who engages, as the person in command or as pilot, mechanic,
aeronautical engineer, flight radio operator or member of the crew, in the
navigation of aircraft while under way and any individual who is directly in charge of
inspection, maintenance, overhauling, or repair of aircraft, aircraft engine,
propellers, or appliances; and individual who serves in the capacity of aircraft
dispatcher or air traffic control operator.
DUTIES OF THE CIVIL AERONAUTICS BOARD (CAB)
As stated in R.A. 776 of the Philippines, the CAB shall have the general
supervision and regulation of, the jurisdiction and control over, air
carriers, general sales agents, cargo sales agents, and airfreight
forwarders as well as their property, property rights, equipment, facilities,
and franchise, in so far as may be necessary. Also, it shall have the
authority to regulate air transportation to recognize and preserve the
inherent advantages of, assure the highest degree of safety in and foster
sound economic conditions in such transportation, and to improve the
relations between, and coordinate transportation by air carriers.
CHARTER OF AIRCRAFT
WHO MAY CHARTER AN AIRCRAFT?
(1) By a person for his own use (including a direct air carrier when such
aircraft is engaged solely for the transportation of company personnel or
commercial traffic in cases of emergency);
(2) By a representative (or representatives acting jointly) of a group for
the use of such group (provided no such representative is professionally
engaged in the formation of groups for transportation or in the solicitation
or sale of transportation services); or
(3) By an airfreight forwarder holding a currently effective permit.

DIFFERENT CLASSIFICATIONS OF CHARTER OF AIRCRAFT

On-route- service performed by an air carrier between points between which said
carrier is authorized to provide service pursuant to its certificate of public
convenience and necessity or foreign air carrier permit; Provided, however, that
passenger charter trips by any all-cargo carrier are not considered to be on-route
whether or not performed between points designed to receive service by such
carrier in its certificate or permit.

Off-route- any charter which is not on-route.

Pro-rata charter- a charter where the cost of which is divided among the
passengers transported.

Single entity charter- a charter the cost of which is borne by the charterer and
not by individual passengers, directly or indirectly.
Mixed charter- a charter the cost of which is borne, or pursuant to contract may
be borne, partly by the charter participants and partly by the charterer.
SOVEREIGNTY AND AIR FREEDOMS
KINDS OF FREEDOM OF THE AIR
First Freedom of the Air - the right or privilege, in respect of
scheduled international air services, granted by one State to another State or
States to fly across its territory without landing (also known as a First Freedom
Right).
Second Freedom of the Air - the right or privilege, in respect of scheduled
international air services, granted by one State to another State or States to land in
its territory for non-traffic purposes (also known as a Second Freedom Right).
KINDS OF FREEDOM OF THE AIR
Third Freedom of The Air - the right or privilege, in respect of scheduled
international air services, granted by one State to another State to put down, in
the territory of the first State, traffic coming from the home State of the carrier
(also known as a Third Freedom Right).
Fourth Freedom of The Air - the right or privilege, in respect of scheduled
international air services, granted by one State to another State to take on, in the
territory of the first State, traffic destined for the home State of the carrier(also
known as a Fourth Freedom Right).
KINDS OF FREEDOM OF THE AIR

Fifth Freedom of The Air - the right or privilege, in respect of scheduled

international air services, granted by one State to another State to put down and to
take on, in the territory of the first State, traffic coming from or destined to a third
State (also known as a Fifth Freedom Right).
The International Civil Aviation Organization (ICAO) characterizes all "freedoms"
beyond the Fifth as "so-called" because only the first five "freedoms" have been
officially recognized as such by international treaty.
KINDS OF FREEDOM OF THE AIR
Sixth Freedom of The Air - the right or privilege, in respect of scheduled
international air services, of transporting, via the home State of the carrier, traffic
moving between two other States (also known as a Sixth Freedom Right). The socalled Sixth Freedom of the Air, unlike the first five freedoms, is not incorporated
as such into any widely recognized air service agreements such as the "Five
Freedoms Agreement".
Seventh Freedom of The Air - the right or privilege, in respect of scheduled
international air services, granted by one State to another State, of transporting
traffic between the territory of the granting State and any third State with no
requirement to include on such operation any point in the territory of the recipient
State, i.e the service need not connect to or be an extension of any service to/from
the home State of the carrier.
KINDS OF FREEDOM OF THE AIR
Eighth Freedom of The Air - the right or privilege, in respect of scheduled
international air services, of transporting cabotage traffic between two points in the
territory of the granting State on a service which originates or terminates in the
home country of the foreign carrier or (in connection with the so-called Seventh
Freedom of the Air) outside the territory of the granting State (also known as
a Eighth Freedom Right or "consecutive cabotage").
Ninth Freedom of The Air - the right or privilege of transporting cabotage traffic
of the granting State on a serviceperformed entirely within the territory of the
granting State (also known as a Ninth Freedom Right or "stand
alone"cabotage).
KUWAIT AIRWAYS CORPORATION
V.
PHILIPPINE AIRLINES, INC.,
OBLIGATIONS OF CARRIER IN AIR TRANSPORTATION
Due diligence in air transportation includes the obligation to make sure that the
aircraft is airworthy, that the vessel has a competent captain and crew, and that the
captain and his crew exercised extraordinary diligence in operating the aircraft.
The exercise of extraordinary diligence also includes:
That the carrier provides competent and well trained crew; and

That the carrier must take make sure that the plane took the designated route.
AIRWORTHINESS
Airworthiness, as defined in Civil Aeronautics Act of 2008, means that an aircraft,
its engines, propellers, and other components and accessories, are of proper design
and construction, and are safe for air navigation purposes, such design and
construction being consistent with accepted engineering practice and in accordance
with aerodynamic laws and aircraft science. It is the responsibility of the registered
owner or operator of an aircraft to maintain the aircraft airworthy conditions.
The carrier must exercise due diligence in taking care of the baggage of
the passengers and the carrier will be liable for any damage or transported to
another place or delay or lost altogether of any baggage.
The carrier must exercise extraordinary diligence to passengers because
the passengers in a contract of carriage do not contract merely for the
transportation; they have a right to be treated with kindness, respect, courtesy, and
consideration. The operation of common carrier is a business affected with public
interest and must be directed to serve the comfort and convenience of passengers.
Instances of breach of contract of carriage in air transportation:
When the airline company dumped off a passenger with confirmed reservation or
downgraded the passengers seat accommodation from one class to a lower class.
(Phil. Airlines, Inc. v Vicente Lopez, Jr.)
If the airline company upgraded the seat accommodation of a passenger. (Cathay
Pacific Airways, Ltd v Spouses Vasquez)
Instances of breach of contract of carriage in air transportation:
- If the carrier failed to make necessary arrangements to transport the passenger on
the first available flight if the aircraft took a stopover due to fortuitous event. (Japan
Airlines v CA)
If the carrier failed to rebook or rerouting of flight of a passenger after paying the
necessary fees. (Northwest Airlines v Catapang).
The carrier may be held liable for rude and discourteous treatment of its passenger
not only by the crew inside the vessel but also the staff in the airport as well as the
staff in branch offices of the carrier.
Denied boarding Passengers.
The general rule is that air carrier is duty bound to accept and board a passenger
with confirmed tickets if the passenger presents himself on time in the airline
counter in the airport.
Order of priorities of passengers on oversold flight
1. Thru passenger over originating passenger

2. Connecting confirmed passenger

3. Originating confirmed passenger
4. Passenger with conditional reservation tickets
5. Chance passenger.
Denied Boarding Compensation
Passenger for domestic flights
100% of the value of the first remaining

flight coupon + P 150

Passenger for international flights

100% of the value of the first remaining
flight coupon but not
exceeding P 1,500 or
its equivalent in foreign currency + P 500
or its
equivalent in foreign currency
If accepted by the passenger, shall constitute liquidated damages for all damages
incurred as a result of the carriers failure to provide the passenger with confirmed
reserved space
Passengers that are not eligible for denied boarding compensation
(Economic Regulation No. 7; Sec. 6)
The flight is unable to accommodate him because of : 1) Government requisition
seat; 2) substitute of equipment of lesser capacity when required by operational
and/ or safety reasons and/ or other causes beyond the control of the carrier
The flight is cancelled due to operational and/ or safety reasons, force majeure,
weather, strikes, or other causes beyond the control of the carrier
The carrier arranges for comparable air transportation or for the transportation
accepted by the passenger, which at that time either of such arrangements is
made, is scheduled to arrive at the place of the passengers next stop-over not later
than 3 hours (domestic flights) or 4 hours (international flights), from the scheduled
time of arrival of the flight on which he was denied boarding or accomodation
The carrier shall (to the passenger):
Furnish a written statement quoting the terms, conditions and limitations of the
denied boarding compensation
Tender a check of the amount of denied boarding compensation (if accepted by the
passenger)
Categories of unaccomplished passengers
Denied boarding for lack of space on a flight otherwise normally operated
Denied boarding due to lack of space resulting from equipment substitution to
smaller aircraft

Denied boarding due to other exceptions under Section 6 of Economic Regulation

No. 7
Scheduled domestic air carriers are authorized to sell conditional reservation
tickets on fully book flights where the passenger seeks reservation on that flight and
where space due to no-shows can still be reserved subject to actual availability,
provided, that the passenger shall be informed of the nature and condition of the
ticket purchased and reservation made
Travel Documents
It is the obligation of the passenger to secure the appropriate travel
documents, however, the airline may be held liable if it is lost due to the negligence
of the airlines employee
Inspection of aircraft and cargo
(R.A. No. 6235)
Aircraft companies which operate as public utilities or operators of aircraft which are
for hire are authorized to open and investigate suspicious packages and cargoes in
the presence of the owner or shipper or his authorized representatives.
If the owner or shipper or his authorized representative refuses, the airline or
air carrier is authorized to refuse the loading thereof.
The holder of the ticket issued by the airline or air carrier and his hand carried
luggage/s are subject to search for, and seizure of, prohibited materials or
substances.
If the holder refuses, he shall not be allowed to board the aircraft.
Authority of the Director General of CAAP
To have access to all civil aircraft for their inspection
To detain civil aircraft if:
1) the aircraft may not be airworthy
2) the airman may not be qualified or physically or mentally capable
for the flight
3) the operation would cause imminent
property on the ground

danger to persons or

Unlawful for any person:

To compel a change in the course or destination of an aircraft of Philippine registry,
or
To seize or usurp the control thereof, while it is in flight
To compel an aircraft of foreign registry to land in Philippine territory, or
To seize or usurp the control thereof, while it is in within the said territory

Unlawful for any person (natural or juridical):

To ship, load or carry in any passenger aircraft operating as a public utility within
the Philippine territory, any explosives, flammable, corrosive or poisonous
substance or material
For juridical persons: the liable persons shall be the manager, representative,
director, agent or employee who violated, or caused, directed, cooperated or
participated in the violation
Dangerous Goods:
Class 1- Explosives
Class 2- Gases
Class 3- Flammable liquids
Class 4- Flammable liquids
Class 5- Oxidizing substances and organic peroxides
Class 6- Toxic and infectious substances
Class 7- Radioactive
Class 8- Corrosive substances
Class 9- Misc. Dangerous substances and articles
Warsaw Convention on Air Transport
Ratified by the Philippines on September 11, 1950
Applies to all international transportation of persons, baggage, or goods performed
by an aircraft gratuitously or for hire.
One of its objectives is to regulate the conditions of international transportation by
air, in a uniform manner.
Liabilities Prescribed by the WC:
For damage sustained in the death or wounding of a passenger, or for any bodily
injury suffered by a passenger while on board the aircraft or in the course of any
operations of embarking or disembarking. (Art 17)
For damage sustained in the destruction or loss of, or damage to, any checked in
baggage, or any goods, if such damage was incurred during the transportation by
air. (Art 18 .1)
For damage occasioned by delay in the transportation by air of the passengers,
baggage, or goods.
Limitations to Claims of Damages:

For transportation of passengers- 250,000 francs (terms of payment is in

accordance to the court where the case is filed)
For transportation of checked in baggage, or goods- 250francs/kg
Note: both limitations are subject to the stipulations agreed upon by the carrier and
passenger/shipper
For objects which the passenger takes charge himself 5000francs per passenger
The above sums may be converted into any national currency in round figures.
Meaning of International Transportation
The places of departure and the place of destination are within the territories of two
contracting countries, regardless of whether there was a break in the transportation
or transhipment.
The place of departure and the place of destination are within the territory of a
single contracting country, if there is an agreed stopping place within a territory
subject to the sovereignty of another power, even if not a party of the Convention.
Period Covered by International Transportation:
The moment the baggage or goods are placed in the charge of the carrier,
regardless of place it was surrendered.
Tort Liability
Complaint for quasi-delict may be filed in accordance to the prescriptive period set
forth in the Civil Code (4 years).
The WC prohibits the carrier from availing of the provisions that limit his liability, if
the damage was caused by his willful misconduct, or an act considered by the forum
to be its equivalent.
Venue for Action:
The court where the carrier is domiciled.
The court where the carrier has its principal place of business.
The court where the carrier has an establishment by which the contract has been
made.
The court of the place of destination.
Republic Act No. 7471 Philippine Overseas Shipping Development Act
Sec. 3. Definition. As used this Act

(a) "Philippine overseas shipping" means the transport of goods and/or passengers
by a ship owned and operated under the Philippine flag by a Philippine shipping

enterprise, except when the ship is operated solely between ports in the
Philippines;
Republic Act No. 7471 Philippine Overseas Shipping Development Act
Sec. 7. Exemption from Income Tax. A Philippine shipping enterprise shall be
exempt from payment of income tax on income derived from Philippine overseas
shipping for a period of ten (10) years from the date of approval of this Act:
Provided, That:
Republic Act No. 7471 Philippine Overseas Shipping Development Act
(a) The entire net income, after deducting not more than ten percent (10%) thereof
for distribution of profits or declaration of dividends, which would otherwise be
taxable under the provisions of Title II of the National Internal Revenue Code, is
reinvested for the construction, purchase, or acquisition of vessels and related
equipment and/or in the improvement of modernization of its vessels and related
equipment in accordance with the regulations; and
Republic Act No. 7471 Philippine Overseas Shipping Development Act
(b) The cumulative amount so reinvested shall not be withdrawn for a period of ten
(10) years after the expiration of the period of income tax exemption or until the
vessel or related equipment so acquired have been fully paid, whichever date
comes earlier.
Any amount not so invested or withdrawn prior to the expiration of the period
stipulated herein shall subject to the corresponding income tax, including penalties,
surcharges and interests.
Republic Act No. 7471 Philippine Overseas Shipping Development Act
Sec. 12. Penal Provisions. Violation of the provisions of this Act or the rules and
regulations promulgated to implement the same shall be punished by a fine of not
more than Ten thousand pesos (P10,000) or imprisonment for not more than five (5)
years, or both such fine and imprisonment, at the discretion of the court.
Republic Act No. 7471 Philippine Overseas Shipping Development Act
If the violation is committed by an association or corporation, the penalties
prescribed hereunder shall be imposed on the president the chief executive officer
and the other officials and employees responsible for the violation.
Republic Act No. 7471 Philippine Overseas Shipping Development Act
If the violation is committed by a government official or employee, he shall, in
addition to the penalties prescribed hereunder, be dismissed from the government
service with all administrative penalties accessory thereto.
RA 9301 - AN ACT AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NO.
7471, ENTITLED "AN ACT TO PROMOTE THE DEVELOPMENT OF THE
PHILIPPINE OVERSEAS SHIPPING" AND FOR OTHER PURPOSES

SEC. 3. Definitions. As used in this Act: "(a) Philippine overseas shipping means
the operation of a Philippine shipping enterprise in the overseas trade of any type of
Philippine registered ship for any kind of shipping operation, which shall include, but
shall not be limited to the transport of goods and/or passengers, and the purchase
of ships for operation and the sale of ships after operation, except when the ship is
operated solely between ports in the Philippines."
RA 9301 - AN ACT AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NO.
7471, ENTITLED "AN ACT TO PROMOTE THE DEVELOPMENT OF THE
PHILIPPINE OVERSEAS SHIPPING" AND FOR OTHER PURPOSES
"SEC. 7. Exemption from Income Tax. A Philippine shipping enterprise shall be
exempt from payment of income tax on income derived from Philippine overseas
shipping for a period of ten (10) years from the date of approval of this Act:
Provided, That:
RA 9301 - AN ACT AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NO.
7471, ENTITLED "AN ACT TO PROMOTE THE DEVELOPMENT OF THE
PHILIPPINE OVERSEAS SHIPPING" AND FOR OTHER PURPOSES
"(a) The entire net income, after deducting not more than fifteen percent (15%)
thereof for distribution of profits or declaration of dividends, which would otherwise
be taxable under the provisions of Title II of the National Internal Revenue Code, is
reinvested for the construction, purchase, or acquisition of vessels and related
equipment and/or in the improvement or modernization of its vessels and related
equipment in accordance with the regulations; and "(b) The cumulative amount so
reinvested shall not be withdrawn for a period of seven (7) years after the expiration
of the period of income tax exemption or until the vessel or related equipment so
acquired have been fully paid, whichever date comes earlier. "Any amount not so
invested or withdrawn prior to the expiration of the period stipulated herein shall be
subject to the corresponding income tax, including penalties, surcharge and
interest."
RA 9301 - AN ACT AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NO.
7471, ENTITLED "AN ACT TO PROMOTE THE DEVELOPMENT OF THE
PHILIPPINE OVERSEAS SHIPPING" AND FOR OTHER PURPOSES
"SEC. 12. Penal Provisions. Violation of the provisions of this Act or the rules and
regulations promulgated to implement the same shall be punished by a fine of not
more than One hundred thousand pesos (P100,000.00) or imprisonment for not
more than five (5) years or both such fine and imprisonment at the discretion of the
court." If the violation is committed by an association or corporation, the penalties
prescribed hereunder shall be imposed on the president, the chief executive officer
and the other officials and employees responsible for the violation. "If the violation
is committed by a government official or employee, he/she shall, in addition to the
penalties prescribed hereunder, be dismissed from the government service with all
the administrative penalties accessory thereto.
Free competition

May work against the application of different policies like the prior operator rule and
prior applicant rule
Monopoly is shunned
Supreme Court:
In Eastern Telecommunications Philippines Inc. v. International Communication
Corporation (G.R. No. 135992, July 23, 2004)
The role of telecommunications industry cannot be understated.
Sensing the need to abrogate their dominion, the government formulated policies in
order to create an environment conducive to the entry of new players.
In Republic of the Philippines v. Republic Telephone Corporation., Inc. (G.R. No.
64888, November 28, 1996)
Free competition in the industry may also provide an answer to a much-desired
improvement in the quality and delivery of this type of public utility.
After all, no public utility has a constitutional right to a monopoly position in view of
the constitutional proscription that no franchise certificate or authorization shall be
exclusive in character or shall last longer than fifty years.
Certificate of Public Convenience
When not considered a property
A mere privilege that is always a subject to the regulation of the State.
Insofar as the state is concerned a certificate of public convenience constitutes
neither a franchise nor a contract, confers no property right, and is a mere license
or privilege.
A common carrier who holds such certificate does not acquire a property right in the
route covered thereby.
Does not confer upon the holder any proprietary right or interest or franchise in the
public highways. Revocation would likewise not deprive one of any vested right.
The certificate of public convenience is granted with so many strings attached. New
and additional burdens, alteration of the certificate and even revocation thereof are
reserved to the state.
When considered a property
Supreme Court:
In Raymundo v. Luneta Motor Co., et al., (58 Phil. 889)
A certification of public convenience is included in the term property in the broad
sense of the term. Under the Public Service Law, a certificate of public convenience
can be sold by the holder thereof because it has considerable material value and is
considered as valuable asset.

In Pangasinan Transportation Co. v. PSC (70 Phil 221)

Although there is no doubt that it is private property, it is affected with public
interest and must be submitted to the control of the government for the common
good.
In Lugue v. Villegas (L-22545, Nov. 28, 1969, 30 SCRA 409)
Insofar as the interest of the state is involved, a certificate of public convenience is
does not confer upon the holder any proprietary right or interest or franchise in the
route covered thereby and in public highways
In A.L. Ammen Transportation Co. v. Golingco (43 Phil 280)
With respect to other persons and other public utilities, a certificate of public
convenience as property, which represents the right and authority to operate its
facilities for public service, cannot be taken or interfered without due process of law.
Appropriate actions may be maintained in courts by the holder of the certificate
against those who have not been authorized to operate in competition with the
former and those who invade the rights which the former has pursuant to the
authority granted by the Public Service Commission.
When certificate of public convenience not required:
Warehouses
Vehicles drawn by animals and bancas moved by oar or sail, and tugboats and
lighters.
Airships within the Philippines except as regards the fixing of their maximum rates
on freight and passengers
Radio companies except with respect to the fixing of rates
Public services owned or operated by an instrumentality of the national government
or by government owned or controlled corporation, except with respect to the fixing
of rates (as amended by CA 454, R.A. No. 2031, and R.A. No. 2677)
For airlines:
Civil aeronautics board regulates the economic aspect of civil aviation.
Civil Aviation Authority of the Philippines regulates civil aviation with the aim of
providing safe, reliable, and efficient air transport system and regulatory services
and to develop the technical, operational, safety and security function of civil
aviation.
For radio companies:
National Telecommunications Commission
Regulates the installation, operation and maintenance of radio stations both for
private and public use (Act No. 3846, as amended)

 Regulates and supervises the provision of public telecommunications services (RA

7925, CA146, as amended)
Manages the radio spectrum (Act No. 3846, as amended and RA7925)
Regulates and supervises radio and television broadcast stations, cable television
(CATV) and pay television (EO546 and EO205)
Transfer of Certificate
The law requires the approval of the Public Service Commission in order that a
franchise or any privilege pertaining thereto may be sold or leased without
infringing the certificate issued to the grantee
The law requires that that before approval is granted, there should be a public
hearing with notice to all interested parties in order that the commission may
determine if there are good and reasonable grounds justifying the transfer or lease
of the property covered by the franchise, or if the sale or lease is detrimental to the
public interest.
Without the requisite approval, the transfer is not binding against the Public Service
Commission and in the contemplation of the laws the grantee continues to be
responsible under the franchise in relation to the commission and to the public.
Registered Owner Rule applies if the transfer of franchise was not approved by the
regulating agency.
Revocation of Certificate
Since the holding of a certificate of public convenience is a mere privilege, the same
certificate may be revoked by administrative agency concerned.
Supreme Court:
Sustained the cancellation of certificate of public convenience where: (1) the holder
is a mere dummy (Pecson v. Pecson, 78 Phil. 522); (2) the operator ceased
operations and placed his vehicles on storage (Paredes v. Public Service
Commission, L-7111, May 30, 1955); (3) the operator totally abandoned the service
(Collector v. Buan, L-11438, July 31, 1958)
Revocation not justified if there is no showing of willful and contumacious violation
of the law and rules (e.g. the cancellation of certificate of authority cannot be
justified by the mere fact that the taxicab was used by escaping hold-uppers,
Manzanal v. Ausejo, G.R. No. 31056, August 4, 1988)
Vicarious liability cannot be invoked because the proceeding for cancellation is
neither a criminal prosecution nor an action for quasi-delict (i.e. there is no ground
to hold the operator liable for the drivers act)
National Telecommunications Commission
Has no power to cancel certificates of public convenience that it issued to the
holders of the duly-issued legislative franchises in the broadcast industry.

Warsaw Convention
Limit of Liability:
250,000 francs for injuries to passengers
however by special contract, the carrier and passenger may agree to a higher limit
of liability
250 francs per kilogram for registered baggage and cargoes
if a special declaration of interest in delivery at destination and payment of
supplementary sum if the case so requires, will make the carrier liable to pay a sum
not exceeding the declared sum, unless he proves that the sum is greater than the
actual value to the consignor at delivery.
5,000 francs per passenger for objects which the passenger takes charge himself
Tort Liability
Warsaw convention does not provide for an exclusive enumeration of instances
when carrier is liable. It does not provide for an absolute limit of liability and does
not preclude the application of the civil code and pertinent local laws.
Warsaw convention however denies to the carrier his right to avail of the provisions
which exclude or limit his liability if the damage is caused by willful misconduct or
by such default that is considered to be equivalent to a willful misconduct.
the same rule applies if the damage is caused by any agent of the carrier acting
within the scope of his employment
Venue of Action
Jurisdictional in character
The plaintiff may bring the action for damages before:
1. The court where the carrier is domiciled
2. The court where the carrier has its principal place of business
3. The court where the carrier has an establishment by which the contract has been
made
4. The court of the place of destination

Dual concept of jurisdiction

jurisdiction in the international sense must be established In accordance with Article
28(1) of the Warsaw convention, following which jurisdiction of a particular court
must be established pursuant to the applicable domestic law. Only after the
question of which court has jurisdiction is determined will the issue of venue taken
up.

* allegations of tort do not bring the case outside the ambit of the Warsaw
convention
Successive Carriers
Transportation to be performed by several successive carriers shall be deemed, for
the purposes of this convention, to be one undivided transportation, if it has been
regarded by parties as a single operation, whether it has been agreed upon under
the form of a single contract or a series of contracts.
Successive Carriers
It shall not lose its international character merely because one contract or series of
contracts is to be performed entirely within the territory subject of the sovereignty,
suzerainty, mandate or authority of the same High Contracting Party.
Successive Carriers
If an airline is a member of the International Air Transport Association (IATA), it is
part of the general pool partnership agreement wherein each member act as agent
of each other in the issuance of tickets to contracted passengers to boost ticket
sales worldwide and at the same time provide passengers easy access to airlines
which are otherwise inaccessible in some parts of the world.
Successive Carriers
The issuing airline which acted as an agent of the other airlines would be liable
because the various legs of the trip constitute a single operation. The obligation of
the ticket-issuing airline remains and will not cease even if other airlines will in fact
carry the passengers to in other portions of the trip.
Passenger Ticket and Baggage Check
Passenger Ticket and Baggage Check
Passenger Ticket and Baggage Check
Passenger Ticket and Baggage Check
Passenger Ticket and Baggage Check
Passenger Ticket and Baggage Check
Passenger Ticket and Baggage Check
Air Waybill
Air Waybill
AIR WAY BILL
-

a bill of lading for air transportation

is a complete contract by and between the shipper and the carrier, with the
following elements:

1. consent of the contracting parties;

2. cost/consideration;
3. object (transportation of the cargo)
-(Evangelista v. Pan American World Airways Inc. 63672 CV, April 29, 1983)
AIR WAY BILL
PARTICULARS
a) place and date of its execution, departure, destination, payment;
b) agreed stopping places;
c) name and address of the consignor, first carrier, consignee, and the person
who is to pay it;
d) As to GOODS:

nature of the goods

number of the packages, the method of packing and the particular

marks or numbers

weight, the quantity and the volume or dimensions of the goods

apparent condition of the goods and of the packing;

e) As to PRICE:

freight

if the goods are sent for payment on delivery, the price of the goods

amount of the value declared;

f) OTHERS:

number of parts of the air way bill;

documents handed to the carrier;

time fixed for the completion of the carriage and a brief note of the
route;

a statement that the carriage is subject to the rules relating to liability

established by the Convention

AIR WAY BILL

AIR WAY BILL

END.