2nd DRAFT

ECONOMIC REGULATION NO. 7, As Amended (ER-7) BOARDING PRIORITY AND COMPENSATION FOR DENIED BOARDING, DELAYED AND CANCELLED FLIGHTS
CHAPTER CHAPTER CHAPTER CHAPTER CHAPTER I II III IV V General Provisions Priority Rules Procedure and Compensation for Denial of Boarding, Cancellation and/or Delay Written Report Conditional Reservations CHAPTER I GENERAL PROVISIONS

Section 1. Title of Regulation This Regulation shall be known and cited as Economic Regulations on Boarding Priority and Compensation for Denied Boarding, Delayed, and Cancelled Flights. Section 2. (a) Definition For the purpose of this Regulation:

Air Carrier means a Philippine or foreign air carrier as defined under Republic Act No. 776, operating scheduled domestic or international flights that originate from, terminate at, or serve a point within the Philippines. Conditional Reservation Ticket means a ticket sold by a domestic or foreign carrier on the basis of a tentative listing on a specific flight, on a specific date, and specific service class, and for which space is conditionally reserved. Confirmed Reserved Space means space on a specific flight, on a specific date and specific service class of a carrier which has been requested by a passenger and which the carrier or agent has verified, by appropriate notation on the ticket, as being reserved for the accommodation of destination. Fare is the payment in consideration for the carriage of a passenger. Regular Fare is any fare that is offered on a regular basis and does not qualify as a promotional or special fare such as but not limited to free or discounted tickets provided by airlines to passengers, tickets available for free to employees, and/or tickets claimed based on mileage. Promotional Fare is any fare other than regular fare; it is a low, special, excursion, or APEX fare which has more fences or restrictions than a regular fare. Scheduled Domestic Carrier refers to a Philippine carrier granted a Certificate of Public and Convenience and Necessity (CPCN) to operate scheduled or regular services within points in the Philippines or to and from the territory of the Philippines.

(b)

(c)

(d) (e)

(f)

(g)

(h)

Scheduled Foreign Carrier refers to an air carrier who is not a citizen of the Philippines, and/or an air carrier other than a domestic carrier. Stop-over means a deliberate interruption of a journey by the carrier, agreed to in advance by the passenger, at a point between the place of departure and the place of destination. Section 3. (a) Scope This Regulation shall apply to:

(i)

flights or portion of flights within the territory of the Philippines; flights or portion of flights to and from the territory of the Philippines operated by a domestic or foreign carrier as defined in Section 2; denials of boarding for reasons other than those set forth in Section 6 of this Regulation; delayed flights; and cancelled flights.

(b)

(c)

(d) (e)

This Regulation is designed to cover only honest mistakes on the part of carriers and excludes deliberate and wilful acts of non-accommodation. Provided however, that overbooking not exceeding 10% of the seating capacity of the aircraft shall not be considered as a deliberate and wilful act of nonaccommodation.

CHAPTER II PRIORITY RULES Section 4. Priority Rules for the purpose of determining which passengers holding confirmed reserved space shall be allowed to board on an oversold flight, every carrier shall observe the following priorities: (a) Through Passengers Over Originating Passengers Whenever a flight is scheduled via an intermediate station, through passengers on board said flight shall have first priority at said intermediate station. Connecting Confirmed Passengers Connecting confirmed passengers excluding through or stop-over passengers at any station shall have second priority at these connecting intermediate stations. Originating Confirmed Passengers Originating confirmed passengers at any station shall have third priority. Passengers with Conditional Reservation Tickets Passengers holding conditional reservation tickets shall have fourth priority. Chance Passengers Chance passengers shall be accommodated on a first come, first served basis.

(b)

c)

(d)

(e)

CHAPTER III PROCEDURE AND COMPENSATION FOR DENIAL OF BOARDING, CANCELLATION, AND/ORE DELAY Section 5. a) Procedure for Denial of Boarding.

If a carrier intends to deny a passenger or passengers from boarding it shall first call the attention of passengers who would like to voluntarily surrender their confirmed reserved spaces in favor of other passengers; In cases where the number of passengers who volunteer to give up their seats is insufficient or where there are no volunteers, the carrier may then deny passengers from boarding in accordance with Chapter II, and in which case it must compensate the passenger/s who is/are denied boarding; and A passenger or passengers who surrendered their confirmed reserved spaces should be offered by the air carrier benefits in exchange for the same.

b)

c)

No passenger shall be denied boarding for two consecutive times on the same day except in circumstances set forth in Sec. 10. Section 6. Cancellation. In the event of cancellation, the carrier shall provide passengers with the written or published statement of the cause of the same. This section shall not apply to cancellations voluntarily made by passengers. Section 7. Amount of Compensation for Denied Boarding Subject to the exceptions under Section 10 and under Section 6, carriers shall pay to passengers who are holding confirmed reserved space, who presented themselves for carriage at the proper time and place, fully complied with the carriers checkin and reconfirmation procedures, and who are acceptable for carriage under the carriers tariff, who have been denied boarding for lack of space, a compensation at the rate of: (a) For passengers of domestic flights 100% of the value of the sector not flown, plus an amount Three thousand pesos (Php 3,000.00), and For passengers of international flights 100% of the value of the sector not flown, plus an amount of Five thousand pesos (Php 5,000.00) or its equivalent in other currency. In cases the airline provides for higher compensation, the same shall prevail.

(b)

(c)

If accepted by the passenger, the above compensation shall constitute liquidated damages for all damages incurred by the passenger as a result of the carriers failure to provide the passenger with the confirmed reserved space. The passenger shall in addition have priority booking for the next available flight using the same ticket for which he was denied boarding. This provision shall also apply to passengers holding promotional fare tickets. Section 8. Rights of Passengers in case of cancellation. In case of cancellation for causes attributable to the carrier, the passenger shall have the following rights: a) The air carrier shall provide the following: a.1. Refreshments or meals (breakfast, lunch, or dinner as the

case may be); a.2. Hotel accommodation (conveniently accessible from the airport); Transportation from the airport to the hotel and vice versa in cases of immediately rebooked flights; Free phone calls or e-mails; and First aid, if necessary.

a.3.

a.4. a.5. b)

In case the passenger opts not to fly the ticket anymore, reimbursement of the cost of the sector cancelled and both sectors are cancelled, the carrier shall likewise reimburse the same.

For reasons other than fortuitous event, the carrier shall comply with the requirements of Resolution 155(2001) and submit a sworn statement to the Board from the concerned technical personnel of the carrier setting forth the reasons for the cancellation is attributable to the latter. Section 9. Rights of Passengers in case of Delay. In case of delay, passengers shall have the following rights: a) Delay for more than one (1) hour- the air carrier shall provide the following: a.1. Refreshments or meals (breakfast, lunch, or dinner as the case may be); Free phone calls or e-mails; and First aid, if necessary.

a.2. a.3. b)

Flight deferred until the next day- the air carrier shall provide the following: b.1. Refreshments or meals (breakfast, lunch, or dinner as the case may be); Hotel accommodation (conveniently accessible from the airport); If passenger opts not to fly the remaining sector, a reimbursement of the cost of the remaining sector not flown.

b.2.

b.3.

The carrier shall likewise comply with the requirements of Resolution No. 155 (2001), and submit a Sworn Statement to the Board from the concerned technical personnel of the carrier setting forth the reasons for the delay.

Section 10. Compensation

Exceptions

to

Eligibility

Denied

Boarding

The carrier shall be exempt from liability to pay denied boarding compensation under the following instances: (a) the flight for which the passenger holds confirmed reserved space is unable to accommodate him because of (1) government requisition of space; (2) Substitute of equipment of lesser capacity when required by operational and/or safety reasons and/or other causes beyond the control of the carrier; subject to the requirements set forth in the last paragraph of Sec. 8 and Board Resolution 155 (2001). The carrier arranges for comparable air transportation, or for other transportation accepted (i.e. used) by the passenger, which at the time either of such arrangements is made, is scheduled to arrive at the place of the passengers next stop-over, (or, if none, at the place of his destination) not later than three (3) hours in the case of domestic flights or not later than four (4) hours in the case of international flights, from the scheduled time of arrival of the flight on which he was denied boarding or accommodation; and

(b)

The carrier shall be exempt from liability for delay and cancellation under the following instances: (a) The flight is cancelled or delayed due to operational and/or safety reasons certified or sworn to in accordance with these Regulations, force majeure, weather, strikes, or other causes beyond the control of the air carrier; Fault is attributable to passenger. Written Explanation and Tender of Payment The

(b)

Section 11. carrier shall: (a)

furnish passengers, in cases of denied boarding, cancellation and delay, a written or published statement setting forth the circumstances of denied boarding, cancellation, and delay as herein provided, in any manner practicable. tender to each such passenger who is eligible to claim the abovementioned benefits on the day and place the denial of boarding, cancellation, or delay occurs, or at any branch or at the main office of the carrier, at the discretion of the passenger, a check for the amount specified or cash in case of denial of boarding, and the document necessary to claim the benefits mentioned in cases of cancellation and delays; and if denied boarding compensation is accepted by the passenger, the same shall relieve the carrier from any liability for all claims for damages arising from the abovementioned acts. CHAPTER IV WRITTEN REPORTS

(b)

(c)

Section 12. Written Report on Denied Boarding, Cancellation and Delay Carriers shall file with the Board a quarterly report on the name and addresses of revenue passengers who have been denied boarding, or whose flights were delayed or had been cancelled under the following categories:

(a) (b)

Denied boarding for lack of space on a flight otherwise normally operated. Denied boarding due to lack of space due to equipment substitution to smaller aircraft; Denied boarding compensation given to passengers under this regulation, or exceptions thereto. Carriers shall attach to the said report a true copy of the manifest in which the name for each confirmed passenger who has been denied boarding appears; Cancellation of flights in accordance with the procedure set forth in Board Resolution No. 155 (2001) Delayed flights for more than one (1) hour; and Delayed flights resulting to deferment to the following day.

(c)

d)

e) f)

CHAPTER V CONDITIONAL RESERVATIONS Section 13. Sale of Conditional Reservation Tickets Scheduled air carriers are authorized to sell conditional reservation tickets on fully booked flights where the passenger seeks reservation on that flight and where space due to no shows can still be reserved subject to the actual availability thereof, provided, that the passenger shall be informed of the nature and condition of the ticket reservation made.

APPROVED, December 22, 2011

MANUEL A. ROXAS Chairman

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ATTESTED:

CARMELO L. ARCILLA Executive Director