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CHAPTER 7 THE AIRCRAFT (AC) AND CIVIL AVIATION (CA)

APPLICABLE LAWS:

1) New Civil Code of the PH – provisions on Common Carriers (CC) apply to

transportation by air.
2) RA 9497 Civil Aviation Authority Act of 2008
3) Civil Aviation Regulations – issued by the Civil Aviation Authority of the PH
4) RA 776 – Civil Aeronautics Board – economic regulation of air transpo.
5) Treaties and Conventions of International Transportation
 WARSAW CONVENTION – applies to liabilities of carriers in international
transpo.
 CHICAGO CONVENTION – signed on Dec. 7, 1944

 ARE AIRLINE COMPANIES MAY BE CONSIDERED AS COMMON CARRIERS?

 JOSE MENDOZA vs PAL: SC explained that they are inclined to believe that a contract
of transportation by air may be regarded as commercial. The reason that in the present case
the transportation company (PAL) is clearly similar or analogous to land and water
transportation. The obvious reason for its non-inclusion in the Code of Commerce (COC) was
that at the time of its promulgation, transportation by air on a commercial basis was not yet
known. An airline company engaged in the transportation business is regarded as a CC. the
principles that govern carriers by other means govern carriers by aircraft.

Owners of airlines and aircrafts engaged on the passenger service on regular

schedules on definite routes, who solicit patronage of the traveling public,
advertise schedules for routes, time of leaving and rates and fares, and make the
usual stipulation as to baggage, are CC by air. A flying service company which
according to its printed advertising will take anyone anywhere at any time,
though not operating on regular routes or schedules, and basing its charges no on
the number of passengers, but on the operating cost of the plane per mile, has
been held to be a CC.

It is not necessary in order to make one carrying passengers by aircraft a CC of

passengers that the passengers be carried from one point to another; the status
and the liability as a CC may exist notwithstanding the passenger’s ticket issued
by an airline carrier of passengers for hire contain a statement that it is not a CC,
or a stipulation that it is to be held only for its proven negligence. But an airplane
owner cannot be classed as a CC of passengers unless he undertakes for hire, to
carry all persons who apply for passage indiscriminately as long as there is room
and no legal excuse for refusing.

Test to determine whether one is a CC by air is whether he holds out that he will
carry for hire so long as he has room, goods for everyone, bringing good to him
for carriage, not whether he is carrying as a public employment or whether he
carries in a fixed place.

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 Airline companies in the PH are subject to different regulatory perspectives.

 KUWAIT AIRWAYS CORP vs PAL: There is no doubt that Philippine Airlines forebears
under several regulatory perspectives.
First, its authority to operate air services in the Philippines derives from its
legislative franchise and is accordingly bound by whatever limitations that are presently
in place or may be subsequently incorporated in its franchise.
Second, Philippine Airlines is subject to the other laws of the Philippines,
including R.A. No. 776, which grants regulatory power to the CAB over the economic
aspect of air transportation.
Third, there is a very significant public interest in state regulation of air travel in
view of considerations of public safety, domestic and international commerce, as well as
the fact that air travel necessitates steady traversal of international boundaries, the
amity between nations.

TERMS AND DEFINITIONS IN CIVIL AVIATION (CA):

 AERONAUTICS OR AVIATION – the science and art of flight

 CIVIL AVIATION (CA) – the operation of any civil aircraft for the purpose of general
aviation operations, aerial work, or commercial air transport operations.

AIR TRANSPORTATION:

 AIR COMMERCE OR COMMERCIAL AIR TRANSPORT OPERATIONS – refers to and

includes scheduled or non-scheduled air transport services for pay or hire, navigation of
aircraft in the furtherance of business, navigation of aircraft from one place to another
for operation in the conduct of business, or an aircraft operation involving the transport
of passengers, cargo, or mail for remuneration or hire.
 DOMESTIC AIR COMMERCE – includes air commerce within the limits of PH territory
 DOMESTIC AIR TRANSPORT – refers to air transportation within the limits of PH
territory
 FOREIGN AIR TRANSPORT – refers to air transportation between the Ph and any place
outside the PH
 INTERNATIONAL COMMERCIAL AIR TRANSPORT – carriage by aircraft of persons or
property for remuneration or hire or the carriage of mail between any 2 or more
countries

PERSONS INVOLVED IN AIR TRANSPORTATION:

 AIR CARRIER OR OPERATOR – refers to a person who undertakes, whether directly or

indirectly, or by lease or any other arrangements, to engage in air transportation
services or air commerce.
 may either be a PH Air Carrier or Foreign Air Carrier
 PH AIR CARRIER – an air carrier who is a PH citizen
 FOREIGN AIR CARRIER OR FOREIGN AIR OPERATOR – any operator not being a PH
Air Operator engaging in commercial air transport operations within borders or airspace
of the PH whether on scheduled or chartered basis.
 AIRMAN – any individual who engages as the person in command or as pilot, mechanic,
engineer etc., or other member of the crew in the navigation of an aircraft while
underway, or those directly in charge of inspection, maintenance, overhauling or repair

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of aircraft and its parts, or those who serves in the capacity of aircraft dispatcher or air
traffic control operator.

REGISTRATION OF AIRCRAFT (AC):

 PH Aircraft – an aircraft registered in the PH according with the requirements of the

Civil Aviation Authority Act of 2008 (RA 9497); according to the Chicago Convention, aircrafts
have the nationality of the State in which they are registered. Every aircraft engaged in
international air navigation shall bear its 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.
 STATE OF REGISTRY – refers to the State on whose register the aircraft is entered.
Hence, an aircraft is a PH National if registered with the Civil Aviation Authority of the PH
(CAAP).
 Certificate of Registration issued by CAAP shall be deemed conclusive evidence of
nationality for international purposes, and shall be carried by the aircraft in all of
its operations.
 Registry of aircraft and any transfer/conveyance, lien, mortgages or other
interests in aircraft or aircraft engines is maintained by CAAP which has the sole
authority to register the same.

 AIRCRAFT (AC) REGISTRATION REQUIREMENTS (RA 9497 SECTIONS 43- 48

and 54):

1) The AC is owned by or leased to a citizen/s of the PH or corporations or

associations organized under PH laws, at least 60% of whose capital is owned by
Filipino citizens; and
2) AC is not registered under the laws of any foreign country.
3) EXCEPTION: Foreign AC may be registered if utilized by members of aero clubs
for recreation, sports, or development of flying skills as a prerequisite to any
aeronautical activities within the PH airspace.

 No AC can be operated in the PH unless it displays its nationality and

registration marks. Permanent markings of AC’s nationality and registration
shall be painted or affixed by any other means ensuring a similar degree of
permanence. (Nationality mark of PH registered AC is “RP”)
 Certificate of Registration shall be conclusive evidence of ownership of AC,
except in a proceeding where ownership is the issue.

 APPLICATION FOR REGISTRATION: Applications for certificate of registration shall be

made in writing, signed and sworn to by the owner or lessee of any aircraft or aircraft engine
eligible for registration. The application shall also state:
(a) the date and place of filing;
(b) the specification, construction and technical description of the aircraft or
aircraft engine; and
(c) such other information as may be required by the Authority in such manner
and form as the Authority may prescribe by regulation.

SEC. 43. Establishment of Registry. - The Authority shall:

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(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.

SEC. 44. Eligibility for Registration. - Except as otherwise provided in the Constitution and
existing treaty or treaties, no aircraft shall be eligible for registration unless it 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. That, under such rules and regulations to be
promulgated by the Board, 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. (R.A. 776, P.D. 1278, E.O. 546, and B.P. 504)

Such certificate shall be conclusive evidence of nationality for international purposes,

but not in any proceeding under the laws of the Republic of the Philippines.

The certificate of registration is conclusive evidence of ownership, except in a

proceeding where such ownership is, or may be, at issue.

SEC. 45. Application for Aircraft Registration. - Applications for certificate of registration
shall be made in writing, signed and sworn to by the owner or lessee of any aircraft or aircraft
engine eligible for registration. The application shall also state: (a) the date and place of filing;
(b) the specification, construction and technical description of the aircraft or aircraft engine; and
(c) such other information as may be required by the Authority in such manner and form as the
Authority may prescribe by regulation.

SEC. 46. 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.

SEC. 47. Nationality. - An aircraft shall acquire Philippine nationality when registered pursuant
to this Act.

SEC. 48. Revocation. - Any certificate of registration may be revoked by the Authority for any
cause which renders the aircraft ineligible for registration.

SEC. 54. Previously Unrecorded Ownership. - Applications for the issuance or renewal of an
airworthiness certificate for aircraft whose ownership has not been recorded as provided in this
Act shall contain such information with respect to the ownership of the aircraft as the Director
General shall deem necessary to show who have property interests in such aircraft and the
nature and extent of such interest.

RECORDING OF CONVEYANCES

 All conveyances made or executed which affects title to, or interest in any AC of PH
registry, or any portion thereof shall be registered with the CAAP.

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 RULES IN THE VALIDITY OF REGISTRATION OF VOLUNTARY DEALINGS OF AC

WITH CAAP:
1) Registration is valid only with respect to the parties and their heirs, assignees,
executors, administrators, devisees, or successors in interest and any person having
actual notice thereof.
2) Registration is valid as against all persons and any instrument, recording shall take
effect on the date of its record in the books of CAAP and not from the date of its
execution.
3) Requirements are similar to the req. in land registration under Property Registration
Decree. Under Sec 52 of the same, the owner may use such forms of deeds,
mortgages, leases or other voluntary instruments as are sufficient in law; owner’s
duplicate of the cert. of registration must be presented before the registration is
effected.
4) The conveyance to be recorded shall also 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

SEC. 49. Conveyance to be Recorded. - No conveyance made or executed, which affects the
title to, or interest in, any aircraft of Philippine registry, or any portion thereof shall be valid in
respect to such aircraft or portion thereof against any person other than the person by whom
the conveyance is made or executed, his heirs, assignees, executors, administrators, devisees,
or successors in interest, and any person having actual notice thereof, until such conveyance is
recorded in the Authority. Every such conveyance so recorded shall be valid as against all
persons. Any instrument, recording of which is required by the provisions of this Act, shall take
effect from the date of its record in the books of the Authority, and not from the date of its
execution.

SEC. 50. Form of Conveyance. - No conveyance may be recorded under the provisions of this
Act unless it complies with the requirements for the registration of documents similar to the
land registration process. The conveyance to be recorded shall also 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.

SEC. 51. Establishment of System of Recording. - The Authority shall establish a national
system for recording documents that affect the title to or any interest in any aircraft registered
in accordance with this Act and in any aircraft engine, propeller, appliance or spare parts
intended for use on any such aircraft.

SEC. 52. Method of Recording. - The Authority shall record conveyances delivered to it in the
order of their receipt, in files kept for that purpose, indexed to show:

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(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;

(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.

SEC. 53. Validity Before Filing. - Upon the establishment of a recording system in accordance
with the provisions of this Act, no document affecting the title to or any interest in such
registered aircraft, aircraft engines, propellers, appliances, or spare parts shall be valid except
as between the parties thereto, unless the document is registered in such recording system.

AIR TRANSPORTATION IN GENERAL:

 Civil Aeronautics Board (CAB) - regulates persons and entities that are involved in the
economic aspects of air transportation.
 These include not only airline companies but also such other entities such as:

a) GENERAL SALES AGENT – a person authorized by the airline itself or its agent who
sells or offer for sale any air transportation, or who holds himself as one who sells,
provides, furnishes, contracts or arranges for such air transportation.
b) CARGO SALES AGENT - a person authorized by the airline itself or its agent who
sells or offer for sale any air transportation of cargo, or who holds himself as one who
sells, provides, furnishes, contracts or arranges for such air transportation of cargo.
c) AIR FREIGHT FORWARDERS – responsible for the transportation of property from
the point of receipt to point of destination and utilizes for the whole or any part of
such transportation the services of a direct air carrier.
d) OFF-LINE CARRIER – any foreign carrier not certified by CAB but who maintains an
office or who has designated employees or agents in the PH who sells or offers for
sale any transportation in behalf of said foreign air carrier, or who holds himself as
one who sells, provides, furnishes, contracts or arranges for such air transportation.
e) AIR TAXI OPERATOR – an air carrier operating small AC for charter trip and/or
individual service transportation within the territory of the PH with proper
certification and permit from CAB.

 CAB is now also regulating REMOTELY PILOTED AIRCRAFT (RPA) – CAB issues
Certificate of Public Convenience and Necessity to those who operate RPA for lawful trade or
business.
 RPA – powered aerial vehicle that does not carry a human operator and which uses
aerodynamic forces to provide vehicle lift and which may be operated through remote control
operation or by means of pre-programmed onboard computer.

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CHARTER OF AIRCRAFT:

 Charter trips are also regulated by CAB.

 CHARTER FLIGHT/TRIP – air transpo. performed by an air carrier where the entire
capacity of one or more AC or less than the entire capacity of an AC has been engaged for the
movement of property on a time, mileage or trip basis;
1) By a person for his own use;
2) By a representative of a group for the use of the group; or
3) By an airfreight forwarder holding a currently effective permit.

 A charter flight is when a person, group or company hire an entire aircraft for a specific
journey. The flight schedule, take-off and landing locations are not set, so will be according to
what is agreed between the hirer and the company providing the flight.

 CLASSIFICATION OF CHARTER OF AC:

1) ON-ROUTE CHARTER – service performed by an air carrier between points

which said carrier is authorized to provide services pursuant to the cert. of public
convenience and necessity or foreign air carrier permit.
2) OFF-ROUTE CHARTER – refers to any charter that is not On-Route
3) PRO-RATA CHARTER – the cost of charter is divided among the passengers
transported.
4) SINGLE ENTITY CHARTER – cost is borne by the charterer and not by
individual passengers
5) MIXED CHARTER – cost is borne partly by the charter participants and partly by
the charterer.

SOVEREIGNTY AND AIR FREEDOMS

 Article 1 CHAPTER I

Sovereignty The contracting States recognize that every State has complete and
exclusive sovereignty over the airspace above its territory.

 Hence, consent is necessary for other States to operate within the territory of another.
 The bilateral system of air traffic negotiation is in force under the Chicago Convention.
Before airlines of treaty partners are able to launch air services to, through and from another
partner’s territory, the convention requires that the two governments shall have negotiated a
bilateral treaty between them that will define the air traffic rights each grant to the other during
the life of the treaty. Resulting agreement is the Air Services Agreement – air traffic rights that
may be agreed upon are called “FREEDOMS OF THE AIR”

FREEDOMS OF THE AIR (by the INTERNATIONAL CONVENTION ON AVIATION

ORGANIZATION):

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).

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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).

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).

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).

(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.)

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 so-called 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.

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 service performed entirely within the territory of the granting State (also
known as a Ninth Freedom Right or "stand alone" cabotage).

 KUWAIT AIRWAYS CORP vs PAL: the "freedom traffic rights" referred to in the
Agreement are the so-called "five freedoms" contained in the International Air Transport
Agreement (IATA) signed in Chicago on 7 December 1944. Under the IATA, each contracting
State agreed to grant to the other contracting states, five "freedoms of air." Among these
freedoms were "[t]he privilege to put down passengers, mail and cargo taken on in the territory
of the State whose nationality the aircraft possesses" (Third Freedom); "[t]he privilege to take
on passengers, mail or cargo destined for the territory of the State whose nationality the
aircraft possesses" (Fourth Freedom); and the right to carry passengers from one's own country
to a second country, and from that country to a third country (Fifth Freedom). In essence, the

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Kuwait Airways flight was authorized to board passengers in Kuwait and deplane them in
Manila, as well as to board passengers in Manila and deplane them in Kuwait. At the same time,
with the limitation in the exercise of Fifth Freedom traffic rights, the flight was barred from
boarding passengers in Bangkok and deplaning them in Manila, or boarding passengers in
Manila and deplaning them in Bangkok.

 CAB – has the indispensable authority to compel local air carriers to comply with
government determined policies even at the expense of economic rights. CAB has ample power
under its charter to compel an airline in proper cases, to terminate whatever commercial
agreements the carrier may have.

 CAB shall have the power to regulate the economic aspect of transportation, and
shall have the general supervision and regulation of, and jurisdiction and control
over carriers as well as their property, property rights, equipment, facilities, and
franchise, and the regulation of transportation in such manner as to recognize
and preserve the inherent advantages of, assure the highest degree of safety in,
and foster sound economic condition in, such transportation, and to improve the
relations between, and coordinate transportation by carriers

CABOTAGE:

 Refers to the right to transport cargo or passengers via land, sea or air between two
places within the same country; Transport of goods or passengers between two places in
the same country by a transport operator from another country; Right to transport cargo
or passengers by land, sea or air between 2 places within the same country.
 TWO TYPES:
1) CONSECUTIVE CABOTAGE - 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.
2) STAND ALONE CABOTAGE - right or privilege of transporting cabotage traffic of
the granting State on a service performed entirely within the territory of the granting
State.

o Under Republic Act (RA) No. 1937 (Tariff and Customs Code of the Philippines) and RA 9295
(Domestic Shipping Development Act of 2004), the privilege of engaging in domestic coastwise
trade is reserved purely for Philippine vessels. Effectively, foreign vessels are prohibited to ply
domestic routes carrying passengers and cargo, except under special albeit discretionary
circumstances. After foreign goods are brought into a Philippine port of entry, domestic shippers
are to transship these to the final point of destination, thus entailing additional costs which are
eventually passed on to consumers.

The restriction resulted in the local shipping industry being dominated by very few players. A study
by a government think tank suggested that the lack of competition in the industry contributed to
high consumer prices and slow modernization.

Now, the rules have changed. Geared towards the primary objective of promoting competition in
the maritime cargo shipping industry, RA 10668 or the Cabotage Act was signed into law by
President Benigno S. C. Aquino III on July 21. The law intends to lift the long-standing cabotage
restrictions imposed upon foreign vessels.

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