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ECONOMIC REGULATIONS
Preliminary Chapter
Section 1.
Title of regulations - These regulations, promulgated pursuant to
Section 10 and 11 of Republic Act No. 776, shall be known and cited as CAB Economic
Regulations, each regulation to be designated and cited by a number.
Section 2.
Effectivity - Each of the Economic Regulations shall take effect
after fifteen days following the completion of its publication in the Official Gazette.
Section 3.
Definition - The following definitions shall control in the
application and construction of the Economic Regulations, unless the context otherwise
requires:
(a)

The term Board means the Civil Aeronautics Board.

(b)

The term Act means Republic Act No. 776.

(c)

The term Section refers to a section of the Act or a section of the

Economic Regulations.

(d)

The terms Rule, Regulation, and Order refer to the rules,

regulations and orders prescribed by the Board pursuant to the Act

(e)

The terms this section, pursuant to this section, in accordance with

the provisions of this section, and words of similar import refer to the
section of the Economic Regulations in which such terms appear.

(f)

Unless otherwise specifically stated, other words and phrases have the
meaning defined in the Act.

Section 4.
Procedural requirements - Unless otherwise specified
in these regulations, the procedural requirements provided in Administrative Order No.
1, series of 1960, shall be applicable.

ECONOMIC REGULATION NO. 1

(ER-1)
PROVISIONS OF GENERAL APPLICABILITY
CHAPTER I.

General Provisions

CHAPTER II.

Application for Certificates of Public Convenience

and Necessity

CHAPTER III.

Applications for Permits to Foreign Air Carriers

CHAPTER IV.

Terms, Conditions and Limitations of Certificates

of Public Convenience and Necessity

CHAPTER V.

Terms, conditions and Limitations of Permits for

Foreign Air Transportation
CHAPTER I
GENERAL PROVISIONS

Section 1.
Title - This regulation shall be known and cited as Economic
Regulation and Applications for Certificate of Public Convenience and Necessity and
Permits to Foreign Air Carriers.
Section 2.
Definitions - The following definitions shall control in the
interpretation and application of this regulation, unless the context otherwise requires:
1.
Certificate of Public Convenience and Necessity is a permit issued by
the Board authorizing a person to engage in air commerce and/or air transportation,
foreign and/or domestic.
2.

Certificate means Certificate of Public Convenience and Necessity.

3.

Permit means an authorization to a foreign carrier to engage in foreign

air transportation.

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CHAPTER II
APPLICATIONS FOR CERTIFICATES OF PUBLIC CONVENIENCE AND
NECESSITY
Section 3.
Formal Requirements - Applications for Certificates of Public
Convenience and Necessity or amendments thereof, shall meet the requirements set forth
in Chapter II, Administrative Order No. I, series of 1960, in addition to those specified by
the Act, as to (a) execution, number of copies, and service; (b) verification; and (c)
formal specifications of papers. All pages of an application shall be consecutively
numbered and the application shall clearly described and identify each annex by a
separate letter. All annexes shall be deemed to constitute a part of the application to
which they are attached.
Section 4. Amendments - If, after receipt of any application, the Board shall
request the applicant to supply it with additional information, such information shall be
furnished in the form of an amendment to the original application. All amendments to
applications shall be contained in a new pleading to be filed, incorporating the
amendments, which shall be indicated by appropriate marks.
Section 5. Incorporation by Reference - Where two or more applications are
filed by a single carrier, lengthy annexes or other documents attached to one may be
incorporated in the others by reference if that procedure will substantially reduce the
costs to the applicant.
Section 6.

Contents -

(a)

The allegations contained in an application shall be restricted to significant

and relevant facts. They shall be free from argumentations, or expressions
of opinion, except such as may be required by this Chapter.

(b)

Request for authority to engage in air transportation between points in the

Philippines and requests for authority to engage in air transportation to or
from any point outside the Philippines shall not be included in the same
application. Similarly, request for authority to engage in scheduled air
transportation and requests for authority to engage in non-scheduled air
transportation may not be included in the same application.

(c)

Such application shall give full and adequate information with respect to
each of the requirements provided by the Act for the issuance of a
certificate and each of the items set forth in this paragraph. The
application shall be in such form as the Board may describe from time to
time. In addition, the application may contain such other information and
data as the applicant shall deem necessary or appropriate in order to
acquaint the Board fully with the particular circumstances of each case
and such other data as may be required by the Board in each particular

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case. Among other things, every such application shall contain the
following information:
(1)

The full name and address of the applicant, the nature of its
organization (individual, partnership, corporation, etc.)

(2)

A statement in accordance with Section 3 (r) and 12 of the Act.

(3)

An adequate identification of each route for which certificate is

desired, specifying the type or types of service (mail, passengers,
and property) to be rendered on each such services are to be
rendered in scheduled operations. The identification of each route
shall name every terminal and intermediate point to be included in
the certificate for which application is made.

(4)

A map (which may be attached as an annex) drawn approximately

to scale showing all terminal and intermediate points to be served,
giving the approximate mileage between all adjacent points and the
principal overall distances.

(5)

A statement as to the type of aircraft applicant proposes to use in

the new service and whether such aircraft is at present owned by
the applicant.

(6)

The name and type of business of any affiliate, subsidiary, or

principal stockholder of applicant engaged in any form of
transportation as a common carrier or engaged in a phase of
aeronautical activity.

(7)

A statement as to whether or not applicant is currently engaged in

any other form of air commerce, and if such be the case, a
statement that all reports due under such authority from the
applicant have been filed with the Board on the date or dates
thereof.

Section 7.
Operations other than between Fixed Points - An application for a
certificate authorizing operations other than between fixed points, or not having terminal
or intermediate points capable of precise description need comply with the provisions of
paragraphs 3 and 4 of the foregoing section only to the extent that it shall clearly describe
the authorization sought by the applicant.

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CHAPTER III
APPLICATIONS FOR PERMITS TO FOREIGN AIR CARRIERS
Section 8.
Formal Requirements - Applications for permits to engage in
foreign air transportation, shall meet the requirements set forth in Chapter II,
Administrative Order No. 1, Series of 1960, in addition to those specified by the Act, as
to execution, number of copies formal specification of papers and verifications. Such
verifications shall be subscribed and sworn to before a notary public or other officer
authorized to administer oath in the jurisdiction in which such application is executed,
together with an appropriate authentication of the authority of such notary public or
officer to administer oath. Notwithstanding the laws of the country of applicants
citizenship, an application verified before a consular officer of the Republic of the
Philippines will be deemed to have met the requirements of this section. All the pages of
the application shall be consecutively numbered, and the application shall clearly
described and identify such annex by a separate letter. All annexes shall be deemed to
constitute a part of the application to which they are attached. The provisions of Section
4 and 5 of the foregoing Chapter shall apply in this Chapter.
Section 9. Filing and Service - Applications for Foreign air carrier permits
shall be forwarded to the Board through diplomatic channels, by the government of the
applicants country of citizenship, and shall be deemed to have been filed on the date
applications are actually received by the Board. Each applicant shall furnish such
additional copies of its application, and shall make such service thereof upon such other
persons as the Board may at any time require.
Section 10. Contents - The statement contained in an application shall be
restricted to significant and relevant facts. They shall be free from argumentations or
from expressions of opinion, except as such may be required by this Chapter. Each
application shall give full and adequate information with respect to each of the
requirements set forth in an applicable treaty or agreement and those provided by the Act
for the issuance of a permit and each of the items set forth in this Section. The
application shall be in such form as the Board may prescribe from time to time. The
application may contain such other information and data as the applicant shall deem
necessary or appropriate in order to acquaint the Board fully with the particular
circumstances of its case and such other data as may be required by the Board in each
particular case. Among other things, every such application shall contain the following
information:
(a)

The full name and address of the applicant, the nature of its organization
(individual, partnership, corporation, etc.) and, if other than an individual,
the name of the country under the laws of which it is organized and the
statutory citation of such laws, if any, the citizenship of the applicant
should be shown as well as the percentage of direct and indirect beneficial
and non-beneficial interest in applicant held by each government and
aggregate of nationals of each government, other than the government of

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applicants citizenship. If the applicant is governmentally owned or
controlled in whole or in part, the extent of such governmental ownership
or control shall be shown.
(b)

The name and official address of the competent air authority of applicants
country of citizenship having regulatory jurisdiction over applicant.

(c)

An identification of the route or routes to be covered by the permit for

which application is made, specifying the type or types of service (mail,
passengers and property) to be rendered on each such route, and whether
or not such services are to be rendered in scheduled operations. The
identification of each route shall name every terminal and intermediate
point to be served by applicant in connection with the service for which
the permit is sought.

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(d)

A map (which may be attached as an annex) drawn approximately

to scale, showing all terminal and intermediate points, both in the
Philippines and in all foreign countries to be served by applicant in
connection with the service for which the permit is sought, giving
the approximate air mileage between all adjacent points, and
principal overall distances.

Section 11. Repeal of Chapter IV, Administrative Order No. 1, Series of 1960.
- This Chapter supersedes and repeals Chapter IV of Administrative Order No. 1,
series of 1960.
CHAPTER IV
TERMS, CONDITIONS AND LIMITATIONS OF
CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY
Section 12. Applicability
- Unless a certificate or the order
authorizing the issuance of such certificate shall otherwise provide, there shall be
attached to the exercise of the privileges granted by each certificate authorizing an
air carrier to engage in domestic air transportation such terms, conditions, and
limitations as are set forth in this Chapter and as may from time to time be
prescribed by the Board.
Section 13. Routes and Schedules - The grantee of a certificate shall
file for approval with the Board a statement of its routes and schedules, setting
forth the points served thereby, the time of arrival and departure at each point, the
frequency of such flights, type and class of service to be rendered, equipment to
be utilized and any change or changes therein.
Section 14. Filing of Tariffs - Each grantee of a certificate shall file
with the Board for approval its tariff showing all rates, fares, charges and
conditions of carriage for air transportation between points served by it, and any
change or changes therein.
Section 15.
(a)

Application for Changes in Service -

If at any time the holder of a permit desires to effect a change or changes

in its routes and schedules, frequencies, equipment, fares and charges, or
to establish a service pattern, omitting one or more of the points served
pursuant to its schedule approved by the Board or adding one or more
points thereto, the holder shall make a written application therefor, setting
forth the facts relied upon to establish that the proposed change or changes
in the service is in the public interest and consistent with the holders
performance of a local air transportation service. They will grant such
application to such extent, for such a period of time, and subject to such

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conditions, as the Board deems proper and adequate, if it finds such
application to be in the public interest.
(b)

A copy of each application for change in service shall be served upon each
scheduled air carrier which regularly renders service to and from any point
named on the route segment, the service pattern of which the holder
proposes to change and upon such persons as the Board may designate in a
particular case.

(c)

The application shall be filed at least forty-five (45) days prior to the
proposed date of effectivity of the change in service.

Section 16. Violation

It shall be a condition upon the holding of a
certificate that any international contravention in fact by the holder, of the provisions of
the Act or of the orders, rules, or regulations issued thereunder, or of the terms,
conditions, and limitations attached to the exercise of the privileges granted by the
certificate, even though occurring without the territorial limits of the Philippines, shall be
a failure to comply with the terms, conditions, and limitations of the certificate within the
meaning of Section 42 (B) of the Act.
CHAPTER V
TERMS, CONDITIONS, AND LIMITATIONS OF
PERMITS FOR FOREIGN AIR TRANSPORTATION
Section 17. Attachment of Terms and Conditions
Unless the order
authorizing the issuance of a particular permit shall provide otherwise, there shall be
attached to the exercise of the privileges granted by each permit to engage in foreign air
transportation pursuant to the provisions of the Act, the terms, conditions, and limitations
set forth in this Chapter and such other terms, conditions and limitations as may from
time to time be prescribed by the Board, subject to the provisions of Section 10(H) (2) of
the Act.
Section 18. Changes in the Permit - If the holder of a permit to engage in
foreign air transportation desires to effect any change or changes in the terms, conditions
and limitations of its permit, other than those covered by Section 20 of this Chapter, such
holder shall make written application to the Board for approval thereof. Such application
shall set forth the facts relied upon for such proposed change or changes showing the
same to be in the public interest. The Board will grant such application, if it finds that
such proposed change or changes would be consistent with the public interest.
Section 19.
Filing and Service - Such application shall be filed with the
Board at least forty five (45) days prior to the proposed date of effectivity of the change

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or changes in the permit, with proof of service of copies thereof upon all carriers
operating to the Philippines.
Section 20. Increase of Frequency and Change of Route - Any increase in
the frequency or a change in the route of an air carrier engaged in air transportation not
covered by a permit may be considered by the Board as a new application for a permit to
engage in foreign air transportation and may be effected only upon compliance with the
provisions of Chapter III of this Regulation.
Section 21. Violation - It shall be a condition upon the holding of a foreign
air carrier permit that any intentional contravention in fact by the holder, of the
provisions of the Act or of the orders, rules, or regulations issued thereunder, or of the
terms, conditions, and limitations attached to the exercise of the privileges granted by the
permit, even though occurring without the territorial limits of the Philippines, shall be a
failure to comply with the terms, conditions, and limitations of the permit within the
meaning of Section 42(B) of the Act.