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Pursuant to Executive Order No. 29 dated 14 March 2011, the following rules and regulations are hereby adopted:

RULE 1
GENERAL PROVISIONS

1.0	The following Rules and Regulations shall be known and cited as the “IMPLEMENTING RULES AND REGULATIONS OF EXECUTIVE ORDER NO. 29 series of 2011.”
1.1	Executive Order No. 29 seeks to further liberalize civil aviation in the Philippines specifically to Airports other than the NINOY AQUINO INTERNATIONAL AIRPORT (NAIA) subject to the conditions required by existing laws. Its provisions are intended to promote a more liberalized policy for the expansion of direct air services, both passenger and cargo to secondary gateways outside of Metro-Manila in order to advance domestic tourism, boost investment in the countryside, foster trade and generate employment.
1.2	These Implementing Rules and Regulations are designed to facilitate access to secondary airports and shall be liberally construed to favor grant of and/or increase in additional frequency/capacity and route rights.
1.3	The following definitions shall control in the application and construction of these Implementing Rules and Regulations:

1.3.1	“Air Carrier” means a person who undertakes, whether directly or indirectly, or by a lease or any other arrangements, to engage in air transportation or air commerce.
1.3.2	“Air Commerce” means and includes air transportation for pay or hire, the navigation of aircraft in furtherance of a business, or the navigation of an aircraft from one place to another for operation in conduct of a business.
1.3.3	“Air Services Agreement” (ASA), governs the civil aviation relationship between State parties. Where the context so requires, the term ASA shall also mean or include “other air services arrangements” or “similar air services arrangements” such as, but are not limited to Exchange of Notes, Exchange of Letters, Agreed Minutes, Memorandum of Understanding, Memorandum of Consultations and other documents that govern or relate to any of (but not limited to) the following:

1. implementation of certain provisions of the bilateral
   
2. amendment of certain provisions of the bilateral
   
3. elaboration of clarification of certain provisions of the bilateral
   
4. establishment and operation of air transportation and related services pending the conclusion of a bilateral
   
5. any matter relating to the civil aviation relationship for two or more States
   or their respective authorized agencies.

 

1.3.4	“Air Transportation” means service or carriage of persons, property or mail, in whole or in part, by aircraft.
1.3.5	“Board” means the Civil Aeronautics Board
1.3.6	“Cabotage” the right to transport passengers and goods between two or more points within the Philippines
1.3.7	“Capacity” refers to the quantitative measurement of the supply of air transportation service expressed either in (a) number of flight frequencies, or (b) number of seats (for passenger options), or (c) units of weight or space (for cargo operations), or (d) aircraft types, or (f) a combination of any of the above.
1.3.8	“Chairman” shall refer to the Chairman of the Philippine air panel
1.3.9	“Endorsement” for this purpose shall mean to authenticate, recommend, and sanction the application for traffic rights and operating permits of the foreign air carrier with the Philippine Government by the government of the state of registry of the carrier.
1.3.10	“Foreign Air Carrier” means an air carrier who is not a citizen of the Philippines, and/or an air carrier other than a domestic air carrier.
1.3.11	“Foreign Air Carrier’s Permit or FACP” is a permit issued by the Board, and approved by the President of the Philippines, authorizing a foreign carrier to engage in foreign air transportation.
1.3.12	“Foreign air transportation” means air transportation between the Philippines and place outside it, or wholly outside the Philippines.
1.3.13	“Gateway” refers to any point of last departure or first arrival of air transportation from or into the State granting rights under the Air Services Agreement or other arrangements. A “secondary gateway” is a gateway other than the Ninoy Aquino International Airport (NAIA), capable of servicing international commercial flights.
1.3.14	“National Interest” - determined by the promotion of international trade, foreign investments, employment and tourism, national security, users of air services, the status of bilateral relations, the development and viability of civil aviation in the country, the need to enhance competitiveness of Philippine domestic carriers and to spur competition and other political or diplomatic considerations.
1.3.15	“Negotiation of ASA” includes both initial negotiation leading to its execution and subsequent consultation talks.
1.3.16	“Non-cabotage traffic rights – any right to carry persons, property and mail to/from any secondary gateway in foreign air transportation.
1.3.17	“Point” is a destination, specified or unspecified, on a route
1.3.18	“Route rights” refers to a market access right which is expressed as agreed geographic specification, or combination of geographic specifications, of the route or routes over which an air service or services may be held out and performed and of the order in which authorized places may be served
1.3.19	“Traffic” means the quantity of air transportation that has been sold and transported.
1.3.20	“Traffic right” is a market access right expressed as an agreed physical or geographic specification, or combination of specification of who or what may be transported over an authorized route or parts thereof in the aircraft.
1.3.21	“Temporary Operating Permit or TOP” refers to an authorization issued by the Board for a fixed term for the operation of scheduled or non-scheduled services by an air carrier pending the issuance of an authority to operate or a Foreign Air Carrier’s Permit (FACP).

1.4

Any other term used in these Implementing Rules and Regulations that is defined in Republic Act No. 776 as amended or Executive Order Nos. 219 (series 1995) and 32 (series 2001) and their respective implementing rules and regulations establishing the domestic and international civil aviation liberalization policy shall be interpreted in accordance with such definition.

RULE II
NEGOTIATION OF ASAs
 

2.1	The Air Panels may offer and promote third, fourth or fifth freedom traffic rights without restrictions on frequency, capacity and type of aircraft and other arrangements to and from any secondary gateway, that will serve national interest as may be determined by the CAB. Traffic rights herein offered and/or granted are deemed to develop tourism, trade, investment, generate employment, and spur competition.
2.2	The CAB, acting as the Secretariat of the Philippine Air Panels constituted in accordance with EO 28 series of 2011, shall, under the authority of the Philippine Air Panels, make the necessary preparations for the negotiation or consultation meetings with other states, in accordance with the customary procedure of conducting the same. The Chairman shall call upon the members of the Philippine Air Panel to establish parameters for negotiations. CAB staff shall provide technical and secretariat support to air negotiations and/or consultations.
2.3	Philippine designated carriers, as observers pursuant to EO 28 s. 2011, shall, prior to any negotiations, submit their respective requirements and/or positions relative to the bilateral partner. Representatives from Philippine designated carriers shall be composed of a principal, duly endorsed by the company, who may be assisted by no more than two delegates.
2.4	The Air Panels may consider positions/suggestions from other interested government agencies and/or stakeholders.
2.5	The position of the Philippines shall be made final prior to the bilateral talks taking into account the requirements/positions of the local carriers and other stakeholders provided these requirements/positions shall be in consonance with the pursuit of national interest.
2.6	The Air Panel Chairman shall inform the air panel members, including the observers, on the position to be taken or the document, if any, to be signed.
2.7	The Air Panel reserves the right to amend, alter, or revise any position taken, in the course of the bilateral talks, if it is deemed to be more in keeping with national interest. The chairman shall inform the panel and observers of any amendment and/ or changes.
RULE III
APPLICATION FOR OPERATING RIGHTS
3.1	An FACP or a TOP, as required by CAB Economic Regulation No. 1, is a condition sine qua non before any foreign carrier is granted operating rights under the EO 29.
3.2	Any foreign carrier, designated or endorsed in applicable circumstances, authorized to operate to and from the Philippines intending to engage in international air transportation to any secondary gateway or to increase its frequencies or capacities and/or route rights, shall file a petition for the grant of and/or increase of traffic rights over and above the limitations imposed by relevant Air Services Agreements in the operation of such services.
3.3	The Board shall require the applicant foreign carrier to notify Philippine carriers operating in the route to which the grant applies. The concerned Philippine carriers may file their respective comment on the said application within a non-extendible period of five (5) days from receipt of the aforementioned notice.
3.4	In no case shall cabotage traffic rights be granted to foreign air carriers.
3.5	The Board shall require the applicant to operate such frequencies and capacities and/ or route rights within ninety (90) days from the approval by the President. Otherwise, the grant shall be automatically revoked.
RULES IV
TRANSFORMATION OF OPERATING RIGHTS INTO TRAFFIC RIGHTS
4.1	Consistent with Section 2 and 5 of Executive Order No. 29, the Philippine Air Panels in coordination with the Board shall hold consultation talks with the respective state of registry of the carriers operating under EO 29 s 2011, to include such frequencies and capacities in their present bilateral with the Philippines as regular traffic rights. Such inclusion shall include the reciprocal grant to Philippine carriers of equivalent traffic rights by the state of registry of such carriers.
4.2	Notwithstanding the non-inclusion of the traffic rights mentioned in 4.1 in the relevant ASA, the Board may continue to allow operations of traffic rights granted under EO 29, if the Board deems it to promote national interest and/or mutual benefits.
4.3	The Board reserves the right to revoke, suspend or restrict operations hereby granted in the event the state of registry of the foreign carrier operating under this grant fails to extend reciprocal rights and/or equal opportunity to Philippine carriers.
RULE V
FILING FEES
5.1	Fees in processing applications for operating rights mentioned above are as follows:
	5.1.1 Application for right to operate	-	PHP250,000.00
	5.1.2 Renewal	-	PHP100,000.00
5.2	The Board may amend the schedule of filing fees.
5.3	The filing fees above-stated shall be non-refundable and may not be used to offset other payments due to the CAB.
5.4	Pursuant to its mandated powers under R.A. 776, the Board may inspect the facilities, premises and operations of foreign carriers operating under Executive Order 29.

RULE VI
VIOLATIONS AND PENALTIES

Any violation of the provisions of Executive Order No. 29 and of this IRR shall be penalized in accordance with the pertinent provisions of R.A. 776 and other applicable laws.

RULE VII
RESERVATION CLAUSE

The Board can amend, repeal or modify these IRR as warranted by circumstances or events so that the objectives of Executive Orders No. 29 consistent with the provisions of R.A. 776 may be served.

RULE VIII
SEPARABILITY CLAUSE

If any section or any of this IRR shall be declared unconstitutional by a competent authority, the remaining section or parts therefore shall not thereby be affected.

RULE IX
REPEALING CLAUSE

All other resolutions, economic regulations and other issuances by the Board which are inconsistent with the herein provisions are hereby amended, repealed or modified accordingly.

RULE X
EFFECTIVITY

These rules shall take effect fifteen (15) days after their publication in a newspaper of general circulation. A copy of these rules shall be deposited with the University of the Philippines Law Center in compliance with the Revised Administrative Code of 1987.


Adopted: 02 May 2011


(SGD.) SECRETARY JOSE P. DE JESUS
Department of Transportation and Communications
Chairman

(SGD.) SECRETARY ALBERTO A. LIM
Department of Tourism
Vice Chairman

(SGD.) DIR. GEN. RAMON S. GUTIERREZ (COL. PAF RET)
Civil Aviation Authority of the Philippines
Member

Attested by:

(SGD.) CARMELO L. ARCILLA
Executive Director