Case Digest: Philippine Airlines, Inc. vs. Civil Aeronautics Board, G.R. No. 119528

Philippine Airlines, Inc. vs. Civil Aeronautics Board, G.R. No. 119528, March 26, 1997

Subject: Transportation Law

FACTS

Private respondent Grand Air applied for a Certificate of Public Convenience and Necessity with the Civil Aeronautics Board (CAB). This application was opposed by petitioner PAL which is a holder of a legislative franchise to operate air transport services alleging that that the CAB had no jurisdiction to hear the petitioner’s application until Grand Air has first obtained a franchise to operate from Congress.

ISSUE

Whether or not the CAB had the jurisdiction to hear the application because Grand Air did not possess a legislative franchise.

Whether or not the Congress, in enacting Republic Act 776, has delegated the authority to authorize the operation of domestic air transport services to the respondent Board, such that Congressional mandate for the approval of such authority is no longer necessary.

RULING

Yes, the CAB had the jurisdiction to hear the application because Grand Air did not possess a legislative franchise.

The Civil Aeronautics Board has the authority to issue a Certificate of Public Convenience and Necessity, or Temporary Operating Permit to a domestic air transport operator, who, though not possessing a legislative franchise, meets all the other requirements prescribed by the law.

There is nothing in the law nor in the Constitution, which indicates that a legislative franchise is an indispensable requirement for an entity to operate as a domestic air transport operator. Although Section 11 of Article XII recognizes Congress’ control over any franchise, certificate or authority to operate a public utility, it does not mean Congress has exclusive authority to issue the same. Franchises issued by Congress are not required before each and every public utility may operate. In many instances, Congress has seen it fit to delegate this function to government agencies, specialized particularly in their respective areas of public service.

Congress gave CAB the power to issue permits for the operation of domestic transport services. It has delegated to the said body the authority to determine the capability and competence of a prospective domestic air transport operator to engage in such venture.