Sixteenth Congress
Third Regular Session
Begun and held in Metro Manila, on Monday, the twenty-seventh day of July, two thousand fifteen.
REPUBLIC ACT No. 10901
An Act Granting the Pilipinas Asian Pearl Airways, Inc. a Franchise to Establish, Operate and Maintain Domestic and International Air Transport Services
Be it enacted by the Senate and House of Representatives of the Philippine Congress Assembled:
Section 1. Nature and Scope of Franchise. - Subject to the provisions of the 1987 Philippine Constitution and applicable laws, rules and regulations, there is hereby granted to Pilipinas Asian Pearl Airways, Inc., hereunder referred to as the grantee, its successors or assignees, a franchise to establish, operate and maintain transport services for the carriage of passengers, mail, goods and properties by air, both domestic and international.
Air transport services shall include the maintenance and operation of hangars and aircraft service stations and facilities and other services of similar nature which may be necessary, convenient or useful as an auxiliary to aircraft transportation.
The grantee shall have the right at its terminal and landing fields, as well as in its aircraft, to construct, operate and maintain stations or transmitting sets for wireless telegraphy and direction findings, and other radio aids to air navigation, using wavelengths in accordance with the rules and regulations made from time to time by the proper agencies of the government. The wireless communication facilities shall be used solely for receiving and transmitting weather forecasts and other matters in connection with the grantee’s services.
Section 2. Civil Aeronautics Board (CAB). - The grantee shall secure from the CAB the appropriate permits and licenses for its operations.
All aircraft used by the grantee including their accessories and equipment shall at all times be air worthy and the crew members shall be licensed by the Government of the Philippines. They shall be equipped with radio communications, safety and other equipment, and shall be operated and maintained in accordance with the regulations and technical requirements of the Civil Aviation Authority of the Philippines (CAAP) or other regulatory bodies the government may prescribe for this purpose.
The grantee’s equipment and the operation of such equipment shall at all times be subject to inspection and regulation by the CAAP.
The grantee shall comply with the provisions of Republic Act No. 776, as amended, otherwise known as "The Civil Aeronautics Act of the Philippines", and the regulations promulgated thereunder from time to time.
Section 3. Responsibility to the Public. - Excepting cases of force majeure and whenever weather conditions permit, the grantee shall maintain scheduled and/or non-scheduled and/or chartered air transport services to any and all points and places throughout the Philippines and between the Philippines and other countries at such frequencies as traffic needs may require: Provided, However, That at least twenty-five percent (25%) of all its frequencies shall be for the domestic market.
Section 4. Rates for Services. - The grantee shall fix just and reasonable rates for the transportation of passengers, mail, goods and freight, subject to the regulations and approval of the CAB and other proper regulatory agencies of the government.
Section 5. Term of Franchise. - This franchise shall be for a term of twenty-five (25) years from the date of effectivity of this Act, unless sooner revoked or cancelled. This franchise shall be deemed ipso facto revoked in the event the grantee fails to comply with any of the following conditions:
(a) Commence operations within one (1) year from the approval of its permit by the CAB;
(b) Secure an Air Operator Certificate (AOC) from CAAP within the same period of its application for a CAB permit;
(c) Operate continuously for two (2) years; and
(d) Commence operations within two (2) years from the effectivity of this Act.
Section 6. Acceptance and Compliance. - Acceptance of this franchise shall be given in writing within sixty (60) days after the effectivity of this Act. Upon giving such acceptance, the grantee shall exercise the privileges granted under this Act. Nonacceptance shall render the franchise void.
Section 7. Bond. - The grantee shall file a bond issued in favor of the CAB, which shall determine the amount, to guarantee the compliance with and fulfillment of the conditions under which this franchise is granted. If, after three (3) years from the date of approval of its permit by the CAB, the grantee shall have fulfilled the same, the bond shall be cancelled by the CAB. Otherwise, the bond shall be forfeited in favor of the government and the franchise ipso facto revoked.
Section 8. Landing Facilities. - The grantee may use the landing and other airport facilities on land and water as may be maintained or owned by the government within the Philippines on the grantee’s line subject to such terms and conditions, restrictions, and national policy considerations as the Philippine Government may impose: Provided, That the Philippine Government shall have the right to use the landing and other airport facilities as may be maintained and owned by the grantee in the Philippines.
Section 9. Contracts. - The grantee is authorized to enter into transportation contracts with the Philippine Government, including the carrying of mail, upon such terms and conditions as may be mutually agreed upon. The grantee shall give preferential consideration to contracts with the Philippine Government. The grantee may likewise enter into transportation maintenance and/or servicing contracts, and such other contracts relating to air transport with other foreign-owned airlines particularly with those which have international routes.
Section 10. Right of Government. - A special right is hereby reserved to the President of the Philippines, in times of war, rebellion, public peril, calamity, emergency, disaster, or disturbance of peace and order: to temporarily take over and operate the facilities or equipment of the grantee; to temporarily suspend the operation of any facility or equipment in the interest of public safety, security, and public welfare; or to authorize the temporary use and operation thereof by any agency of the government, upon due compensation to the grantee, for the use of said facilities or equipment during the period when these shall be so operated.1âwphi1
Section 11. Warranty in Favor of the National and Local Governments. - The grantee shall hold the national, provincial, city, and municipal governments of the Philippines free from all claims, accounts, demands, or actions arising out of accidents or injuries, whether to property or to persons, caused by the operation of the services under the franchise hereby granted.
Section 12. Sale, Lease, Transfer, Usufruct, or Assignment of Franchise. - The grantee shall not lease, transfer, grant the usufruct of, sell nor assign this franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation or other commercial or legal entity, nor merge with any other corporation or entity, nor shall transfer the controlling interest of the grantee, whether as a whole or in parts, and whether simultaneously or contemporaneously, to any such person, firm, company, corporation or entity without the prior approval of the Congress of the Philippines: Provided, That Congress shall be informed of any sale, lease, transfer, grant of usufruct, or assignment of franchise or the rights and privileges acquired thereunder, or the merger or transfer of the controlling interest of the grantee, within sixty (60) days after the completion of said transaction: Provided, further, That failure to report to Congress such change of ownership shall render the franchise ipso facto revoked: Provided, finally, That any person or entity to which this franchise is sold, transferred, or assigned shall be subject to the same conditions, terms, restrictions, and limitations of this Act.
Section 13. Dispersal of Ownership. - In accordance with the constitutional provision to encourage public participation in public utilities, the grantee shall offer to Filipino citizens at least thirty percent (30%) of its outstanding capital stock or a higher percentage that may hereafter be provided by law in any securities exchange in the Philippines within five (5) years from the commencement of its operations.
Section 14. Equality Clause. - Any advantage, favor, privilege, exemption, or immunity granted under other existing franchises, or which may hereafter be granted, upon prior review and approval of Congress, shall become part of this franchise and shall be accorded immediately and unconditionally to the herein grantee: Provided, That the foregoing shall neither apply to nor affect provisions of air transport services franchises concerning territory covered by the franchise, the life span of the franchise or the type of service authorized by the franchise.
Section 15. Reportorial Requirement. - The grantee shall submit an annual report to the Congress of the Philippines, through the Committee on Legislative Franchises of the House of Representatives and the Committee on Public Services of the Senate, on its compliance with the terms and conditions of the franchise and on its operations on or before April 30 of every year during the term of its franchise. The reportorial compliance certificate issued by Congress shall be required before any application for permit or certificate is accepted by the CAB.
Section 16. Penalty Clause. - Failure of the grantee to submit the requisite annual report to Congress shall be penalized by a fine in the amount of five hundred pesos (₱500.00) per working day of noncompliance. The fine shall be collected by the CAB from the delinquent franchise grantee, separate from the reportorial penalties imposed by the CAB.
Section 17. Separability Clause. - If any of the sections or provisions of this Act is held invalid, all other provisions not affected thereby shall remain valid.
Section 18. Repealability and Nonexclusivity Clause. - This franchise shall be subject to amendment, alteration, or repeal by the Congress of the Philippines when the public interest so requires, and shall not be interpreted as an exclusive grant of the privileges herein provided for.
Section 19. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation.
Approved,
FRANKLIN M. DRILON
President of the Senate
FELICIANO BELMONTE, JR.
Speaker of the House of Representatives
This Act which originated in the House of Representatives was passed by the House of Representatives and the Senate on September 21, 2015 and May 23, 2016, respectively.
OSCAR G. YABES
Secretary of the Senate
MARILYN B. BARUA-YAP
Secretary General
House of Representatives
Approved: July 21, 2016
(Sgd.) BENIGNO S. AQUINO, III
President of the Philippines
The Lawphil Project - Arellano Law Foundation
