THE HOUSE of Representatives on Wednesday approved on third and final reading a bill seeking to renew Philippine Airlines, Inc.’s (PAL) legislative franchise for another 50 years.
House Bill (HB) No. 10545 received 250 affirmative votes, three negative votes, and one abstention, according to the results announced during the House plenary session.
The measure seeks to renew for another 50 years PAL’s franchise under Presidential Decree No. 1590, which authorizes the flag carrier to establish, operate, and maintain air transport services in the Philippines and other countries.
Under the bill, PAL would be authorized to transport passengers, mail, and property by air within the Philippines and between the country and overseas destinations.
PAL would also be required to maintain scheduled, nonscheduled, or charter air transport services, subject to weather conditions and other circumstances, at frequencies warranted by traffic demand.
The bill provides that PAL’s passenger, mail, and property transport rates would be subject to regulation and approval by the Civil Aeronautics Board (CAB) or another regulatory agency designated by the government.
It also requires aircraft operated by PAL to be licensed by the Philippine government and operated and maintained in accordance with the regulations and technical requirements of the Civil Aviation Authority of the Philippines (CAAP) or another government-designated regulator.
Under the proposed franchise, PAL would be liable for basic corporate income tax, value-added tax, and real property tax as provided by applicable law. The measure also sets out tax treatment for the airline’s purchases and importations of aircraft, engines, equipment, machinery, spare parts, aviation fuel, and other supplies used in its operations.
The bill would also authorize PAL to contract foreign loans and credits and incur indebtedness from foreign governments, banks, financial institutions, and other foreign funding sources.
PAL would be required to adopt and maintain a fuel supply security framework during periods of extreme fuel price volatility, supply disruptions, national emergencies, and similar circumstances. It would also have to submit a fuel risk management and contingency plan to the CAB.
The measure further requires PAL to create employment opportunities and accept on-the-job trainees, with priority given to Filipino workers and residents of the area where its principal office is located. It also provides that the renewal or implementation of the franchise cannot be used as grounds for the unjust or arbitrary termination of regular employees.
PAL would likewise be required to submit an annual report to Congress on its compliance with the terms of the franchise and its operations, including audited financial statements and certifications from the CAB and CAAP on the status of its permits and operations.
The House-approved measure will now be transmitted to the Senate for consideration. If the Senate approves a different version, the two chambers would have to reconcile their differences before the bill can be sent to the President. — Pexcel John Bacon
