REPUBLIC ACT NO. 7349 - AN ACT
GRANTING TO SILANGAN AIRWAYS, INC., A FRANCHISE TO ESTABLISH, OPERATE
AND MAINTAIN TRANSPORT SERVICES FOR CARRIAGE OF PASSENGERS, MAILS,
GOODS, AND PROPERTY BY BOTH DOMESTIC AND INTERNATIONAL
Section 1. Nature and Scope of Franchise. — Subject to the
provisions of the Constitution and applicable laws, rules and
regulations, there is hereby granted to the Silangan Airways, Inc.,
hereunder referred to as the grantee, its successors or assigns a
franchise to establish, operate and maintain transport services for
carriage of passengers, mails, goods and property by air both domestic
and international.
Air transport services shall include the maintenance and operation of
hangars and aircraft stations and facilities and other services of
similar nature which may be necessary, convenient of useful as an
auxiliary to aircraft transportation.
The grantee shall have the right at its terminals and landing fields,
as well as in its aircraft, to construct, operate and maintain stations
or transmitting sets for wireless telegraphy and direction finding, 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.
Sec. 2. Prior Approval of the Civil Aeronautics
Board. — The grantee shall secure from the Civil Aeronautics Board the
appropriate permits and licenses for its operations.
All aircraft used by the grantee and the flight-crew members operating
such aircraft shall be licensed by the Government of the Philippines
and together with its accessories and equipment shall at all times be
in airworthy condition. 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 Air Transportation Office or such other regulatory
body as 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 Air
Transportation Office.
The grantee shall comply with the provisions of Republic Act Numbered
Seven hundred and seventy-six, and the regulations promulgated
thereunder, from time to time.
Sec. 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 charter
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 frequencies shall be for the
domestic market.
Sec. 4. Rates for Services. — The grantee shall
fix just and reasonable rates for the transportation of passengers,
mails, goods and freight, subject to the regulations and approval of
the Civil Aeronautics Board and other proper regulatory agencies of the
Government.
Sec. 5. Term of Franchise. — This franchise shall
be for a term of forty (40) years from the date of the approval of this
Act, unless sooner revoked or cancelled. In the event that the grantee
fails to operate continuously for two (2) years, this franchise shall
be deemed ipso facto revoked.
Sec. 6. 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 lines subject to such terms and conditions, restrictions and
national policy considerations as the Philippine Government may
prescribe, and reciprocally, the Philippine Government shall have the
right to use the landing and other airport facilities as may be
maintained or owned by the grantee in the Philippines.
Sec. 7. Contracts. — The grantee is authorized to
enter into transportation contracts with the Philippine Government,
including the carrying of mail, upon terms and conditions to 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 who have international routes.
Sec. 8. Right of Government. — In case of war,
insurrection, domestic trouble, public calamity, or national emergency,
the Philippine Government, upon order of the President, shall have the
right to take over and operate the equipment of the grantee, paying for
its use or damages.
Sec. 9. Public Equity Participation. — In
compliance with the constitutional to democratic ownership of public
utilities, the herein grantee shall make public offering through the
stock exchange of at least thirty percent (30%) of its common stock
within a period of ten (10) years from the date of effectivity of this
Act: provided, that no single person or entity shall be allowed to own
more than five percent (5%) of the stock offerings.
SECTION 10. Warranty in Favor of National and Local
Governments. — The grantee shall hold national, provincial and
municipal governments of the Philippines harmless 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 11. Tax Provisions. — The grantee shall pay
to the Philippine Government during the life of this franchise, a
franchise tax of five percent (5%) of the gross revenues derived by the
grantee from transport operations.
In the event any competing individual, partnership and corporation
receives and enjoys tax privileges which tend to place the grantee
herein at any disadvantage, then such provisions shall be deemed part
hereof and shall operate equally in favor of the grantee.
The grantee shall, however, be subject to income tax levied under Title
II of the National Internal Revenue Code, as amended and tax on its
real property under existing laws on revenues earned from activities
other than air transportation.
SECTION 12. Interpretation of Franchise. — This
franchise shall not be interpreted to mean as an exclusive grant of the
privileges herein provided for. However, in the event that any
competing individual, partnership, or corporation shall receive a
similar permit or franchise with terms and/or provisions more favorable
than those herein granted or which tend to place the herein grantee at
any disadvantage, then such term and/or provision shall be deemed part
hereof and shall operate equally in favor of the grantee herein.
SECTION 13. Sale, Lease, Transfer, Assignment,
Usufruct, etc. — The grantee shall not lease, transfer, grant the
usufruct of, sell or assign this franchise and the rights and
privileges acquired thereunder to any person, firm, company,
corporation, or legal entity, nor shall the controlling interest in the
grantee be transferred to any such private person, firm, company,
corporation or entity at a time when the corporation is not in
operation without the prior approval of the Congress of the
Philippines.
Any person or entity to which the franchise is sold, transferred, or
assigned shall be subject to all conditions, terms, restrictions and
limitations of this Act.
SECTION 14. Legislative Amendment. — This franchise
is subject to amendment or repeal by the Congress of the Philippines
when the common good so requires.
SECTION 15. Separability Clause. — If any section or
provision of this franchise, as amended, is held or declared
unconstitutional or invalid by a competent court in final judgment, the
other sections or provisions hereof shall continue to be in force as if
the section or provision so annulled or voided had never been
incorporated in this franchise;
SECTION 16. Repealing Clause. — All laws, decrees,
orders, instructions, rules and regulations or parts thereof which are
inconsistent herewith are hereby repealed or modified accordingly.
SECTION 17. Effectivity Clause. — This Act shall take
effect fifteen (15) days after its publication in at least two (2)
newspapers of general circulation.
Approved: April 2, 1992
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