Philippine Airlines vs Civil Aeronautics Board Case Digest

Philippine Airlines, Inc. vs. Civil Aeronautics Board 

(270 SCRA 538) 

Facts: Grand Air applied for a Certificate of Public Convenience and Necessity with the
Civil Aeronautics Board (CAB). The Chief Hearing Officer issued a notice of hearing
directing Grand Air to serve a copy of the application and notice to all scheduled Philippine
Domestic operators. Grand Air filed its compliance and requested for a Temporary Operating
Permit (TOP). PAL filed an opposition to the application on the ground that the CAB had no
jurisdiction to hear the application until Grand Air first obtains a franchise to operate from
Congress. The Chief Hearing Officer denied the opposition and the CAB approved the
issuance of the TOP for a period of 3 months. The opposition for the TOP was likewise
denied. The CAB justified its assumption of jurisdiction over Grand Air’s application on the
basis of Republic Act 776 which gives it the specific power to issue any TOP or Certificate of
Public Convenience and Necessity. 

Issue: Whether or not the CAB can issue a Certificate of Public Convenience and Necessity
or TOP even though the prospective operator does not have a legislative franchise? 

Held: Yes, as mentioned by the CAB, it is duly authorized to do so under Republic Act 776
and a legislative franchise is not necessary before it may do so, since Congress has delegated
the authority to authorize the operation of domestic air transport services to the CAB, an
administrative agency. The delegation of such authority is not without limits since Congress
had set specific standard and limitations on how such authority should be exercised. 

Public convenience and necessity exists when the proposed facility will meet a reasonable
want of the public and supply a need which the existing facilities do not adequately afford. 

Thus, the Board should be allowed to continue hearing the application, since it has
jurisdiction over it provided that the applicant meets all the requirements of the law.