Part III Aviation Law

Viktoria Villo

Contract of transportation by air may be regarded as commercial.

The transportation company (PAL) is a common carrier; besides, air
transportation is clearly similar of analogous to land and water
transportation.
The reason for its non-inclusion in the Code of Commerce was that at the
time of its promulgation, transportation by air on a commercial basis was
not yet known.
IMPORTANT!!!
The principles that govern carriers by other means, such as railroad or motor
bus, govern carriers by aircraft.
When Aircraft Operator is Common Carrier
There can be no doubt, under the general law of common carriers, that
those air lines and aircraft owners engaged in the passenger service on
regular schedules on definite routes, who solicit the patronage of the
traveling public, advertise schedules for routes, times of leaving, and rates
of fare, and make the usual stipulation as to baggage, are common carriers
by air.
IMPORTANT!!!
It is considered a common carrier even if:
- it will take anyone anywhere at any time (not operating on regular routes
or schedules)
- bases its charges not on the number of passengers, but on the operating
cost of the plane per mile
- ticket issued by an airplane carrier of passengers for hire contains a
statement that it is not a common carrier, etc. or a stipulation that it is to be
held only for its proven negligence
Note:
A common carrier need not take passengers from one point to another; the
status and liability as a common carrier may still exist.
VERY IMPORTANT!!!
What cannot be considered as a common carrier Airplane owner cannot be classed as a common carrier 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 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
Chapter 17
The Aircraft and Civil Aviation

Applicable laws
(1) New Civil code provisions on Common Carriers
(2) RA 9497 Civil Aviation Authority Act of 2008 3/4/2008: Civil Aviation
(3) RA 776 & regulations issued by Civil Aeronautics Board: economic
regulation of air transportation
(4) Treaties & conventions like:
a. Warsaw Convention : liabilities of the carriers in international
transportation by air
b. Chicago Convention 12/7/1944
Regulatory perspectives
1. Legislative franchise: where the authority to operate air services in the
Philippines is derived. The common carrier is accordingly bound by whatever
limitations are presently in place or may be subsequently incorporated in its
franchise.
2. RA 776, which grants regulator power to the Civil Aeronautics Board:
grants regulatory power to the CAB over the economic aspect of air
transportation
3. 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
Civil Aviation
Definitions
(1) Aeronautics or aviation : science and art of flight
(2) Civil aviation : operation of any civil aircraft for the purpose of general
aviation operations, aerial work or commercial air transport operations
(3) Aircraft : any machine that can derive support in the atmosphere from
the reactions of the air other than reactions of the air against the earths
surface
IMPORTANT!!!
Aircraft (Civil Aviation Act of 2008): civil aircraft only, and will not include
State or public aircraft
Registration of Aircraft
Philippine aircraft : aircraft registered in the Philippines in accordance with
the requirements of the Civil Aviation Authority Act of 2008
Chicago Convention Rules
> Aircraft have the nationality of the State in which they are registered
(Article 17, Chapter III of the Chicago Convention)
> 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

Aircraft registration (Civil Aviation Authority Act of 2008)

CHAPTER VIII NATIONALITY AND OWNERSHIP OF AIRCRAFT
SEC. 43. Establishment of Registry. - 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.
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 that 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.
State of Registry : State on whose register the aircraft is entered.
IMPORTANT!!!
The Certificate of Registration issued by the Civil Aviation Authority of the
Philippines shall be deemed conclusive evidence of nationality for
international purposes.
It is also a conclusive evidence of ownership, except in a proceeding where
such ownership is, or may be, at issue.
The Certificate of Registration shall be carried aboard the aircraft in all its
operations.
Civil Aviation Authority of the Philippines (CAAP)
Sole authority to register aircraft and liens, mortgages or other interests in
aircraft or aircraft engines. The registry of aircraft and any transfer, lien,
mortgage or other interests in aircraft or aircraft engines is maintained by
the CAAP.
IMPORTANT!!!
Eligibility for registration of an aircraft, requirements
1. 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 60% of whose capital is owned by Filipino citizens
2. Not registered under the laws of any foreign country
Registration of 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 club within the Philippine airspace
Marking
1. No aircraft can be operated in the Philippines unless it displays nationality
and registration marks.
2. Permanent marking of aircraft nationality and registration shall be painted

on the aircraft or affixed by other means ensuring a similar degree of

permanence.
3. The nationality mark for Philippine registered aircraft is RP.
Recording of Conveyances
All conveyances made or executed, which affects title to, or interest in, any
aircraft of Philippine registry, or any portion thereof shall be registered with
the CAAP.
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. (Civil Aviation Authority Act of 2008)
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:
(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.
Validity of registration of voluntary dealings concerning aircrafts
with CAAP, rules:
1. Registration is valid only with respect to the parties & their heirs,
assignees, executors, administrators, devisees, or successors in interest &
any person having actual notice thereof
2. Registration is valid as against all persons and any instrument, recording
of which is required shall take effect from the date of its record in the books
of the Authority and not from the date of its execution
(Requirements are similar to the requirements in land registration)
Marine insurance
Insurance over aircrafts falls within the coverage of Marine Insurance under
the Insurance Code (including Air Hull Policies, which may vary depending
on the type of aircraft)
Air transportation in general
Air commerce or commercial air transport operation : scheduled or
non-scheduled air transport services for pay or hire, the navigation of
aircraft in furtherance of a business, the navigation of aircraft from one place
to another for operation in the conduct of a business or an aircraft operation
involving the transport of passengers, cargo or mail for remuneration or
hire.
Domestic air commerce : air commerce within the limits of the Philippine
territory
Domestic air transport : air transportation within the limits of the
Philippine territory
Foreign air transport : air transportation between the Philippines & any
place outside it or wholly outside the Philippines
International commercial air transport : carriage by aircraft of persons
or property for remuneration or hire or the carriage of mail between any two
(2) or more countries
Persons involved in air transportation
1. Air carrier or operator : person who undertakes, whether directly or
indirectly, or by a lease or any other arrangements, to engage in air
transportation services or air commerce
a. Philippine air carrier : air carrier who is a citizen of the Philippines
b. Foreign air carrier or foreign air operator : any operator, not being a
Philippine air operator, which undertakes, whether directly or indirectly or by

lease of any other arrangement, to engage in commercial air transport

operations within borders or airspace of the Philippines, whether scheduled
or chartered basis
2. 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 & 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.
Civil Aeronautics Board (CAB)
Regulates persons and entities that are involved in the economic aspects of
air transportation.
Include not only the airline companies but also such entities as the
following:
1. General Sales Agent : person who, pursuant to an authority from an
airline, by itself or through an agent, sells or offers for sale any air
transportation or negotiates for or holds himself by solicitation,
advertisement, or otherwise as one who sells, provides, furnishes, contracts
or arranges for, such air transportation
2. Cargo Sales Agent : any person who does no directly operate an aircraft
for the purpose of engaging in air transportation or air commerce and who,
as principal or agent, sells, or offers for sale any air transportation of cargo,
or negotiates for, or holds himself out by solicitation, advertisement or
otherwise as one who provides, sells, furnishes, contracts or arranges for,
such air transportation of cargo
3. Air Freight Forwarders : any indirect air carrier which, in the ordinary
and usual course of its undertaking, assembles and consolidating such
property and performs or provides for the performance of break-bulking and
distributing operations with respect to consolidated shipments, and is
responsible for the transportation of property from the point of receipt to the
point of destination and utilizes for the whole or any part of such
transportation the services of a direct air-carrier.
4. Off-line Carrier : any foreign air carrier not certificated by the Board,
but who maintains office or who has designated or appointed agents or
employees in the Philippines, who sells or offers for sale any air
transportation in behalf of said foreign air carrier and/or other, or negotiate
for, or holds itself out by solicitation, advertisement, or otherwise sells,
provides, furnishes, contracts, or arranges for such transportation
5. Air Taxi Operator : air carrier utilizing small aircraft for charter trip
and/or individual service transportation within the territory of the Republic of
the Philippines with proper certification and permit from the CAB.
Charter of Aircraft
Regulated by the CAB.
Charter flight/Charter trip : air transportation performed by an air carrier
where the entire capacity if one or more aircraft, or less than the entire
capacity of an aircraft, has been engaged for the movement of persons and

their personnel baggage or fore the movement of property on a time,

mileage or trip basis:
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 representative 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 forwarded holding a currently effective permit
Classifications of charter of aircraft
(1) On Route Charter : service performed by an air carrier between points
between which said carrier is authorized to provide service pursuant to its
certificate of public convenience & necessity or foreign air carrier permit
Off-Route Charter : any charter that is not On-Route
(2) Pro-rate Charter : cost of which is divided among the passengers
transported
(3) Single Entity Charter : cost of which is borne by the charterer and not
by the individual passengers, directly or indirectly
(4) Mixed Charter : cost of which is borne, pursuant to a contract may be
borne, partly by the charter participants and partly by the charterer
Sovereignty & Air Freedoms
Fundamental principle of Chicago Convention - sovereignty of contracting
states
Article 1, Chapter I The contracting states recognize that every State has
complete and exclusive sovereignty over the airspace above its territory.
Note:
Consent is necessary for other States to operate within the territory of
another
a. Bilateral system of air traffic negotiations
Air Services Agreement :Before airlines of treaty partners are able to
launch air services to, through and from another partners territory, the
convention requires that the two governments shall have negotiated a
bilateral treaty between them that will define the air traffic rights each
grants to the other during the life of the treaty
Freedoms of the Air
: the air traffic rights that may be agreed upon in the Air Services
Agreement
Enumeration International Civil Aviation Organization (ICAO):
the right or privilege, in respect of scheduled international air services,
granted by one State to another State or States:

1. First Freedom of the Air - to fly across its territory without landing (also
known as a First Freedom Right).
2. Second Freedom of the Air to land in its territory for non-traffic
purposes (also known as a Second Freedom Right).
3. Third Freedom of The Air - to put down, in the territory of the first
State, traffic coming from the home State of the carrier
4. Fourth Freedom of The Air - to take on, in the territory of the first
State, traffic destined for the home State of the carrier
5. Fifth Freedom of The Air - to put down and to take on, in the territory
of the first State, traffic coming from or destined to a third State
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.
6. Sixth Freedom of The Air - of transporting, via the home State of the
carrier, traffic moving between two other States. 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 - 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 - 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 "consecutive cabotage").
Ninth Freedom of The Air - of transporting cabotage traffic of the granting
State on a service performed entirely within the territory of the granting
State (also known as a "stand alone" cabotage).
Cancellation of Commercial Agreement
Philippine government sole authority to charter air policy and negotiate
with foreign governments with respect to air traffic rights
- (through the CAB) has the indispensable authority to compel local air
carriers to comply with government determined policies, even at the
expense of economic rights
CAB ample power under its organizing charter, to compel an airline, in
proper cases, to terminate whatever commercial agreements the carrier may
have
- general supervision and regulation of, and jurisdiction & control over, air

carrier as well as their property, property rights, equipment, facilities and

franchise (Section 10 of RA 776)
- Board of CAB to consider in the exercise of its functions the regulation of
air 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 air carriers

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