American Airlines vs.

Court of Appeals
327 SCRA 482, March 9, 2000

GONZAGA-REYES, J.:

FACTS:

It is undisputed that the private respondent purchased from Singapore Airlines in Manila conjunction
tickets for Manila-Singapore-Athens-Larnaca-Rome-Turin-Zurich-Geneva-Copenhagen-New York. The
petitioner was not a participating airline in any of the segments in the itinerary under the said conjunction
tickets. In Geneva the petitioner decided to forego his trip to Copenhagen and to go straight to New York
and in the absence of a direct flight under his conjunction tickets from Geneva to New York, the private
respondent on June 7, 1989 exchanged the unused portion of the conjunction ticket for a one-way ticket
from Geneva to New York from the petitioner airline. Petitioner issued its own ticket to the private
respondent in Geneva and claimed the value of the unused portion of the conjunction ticket from the
IATA clearing house in Geneva.

In September 1989, private respondent filed an action for damages before the Regional Trial Court of
Cebu for the alleged embarrassment and mental anguish he suffered at the Geneva Airport when the
petitioner’s security officers prevented him from boarding the plane, detained him for about an hour and
allowed him to board the plane only after all the other passengers have boarded. The petitioner filed a
motion to dismiss for lack of jurisdiction of Philippine courts to entertain the said proceedings under Art.
28 (1) of the Warsaw Convention. The trial court denied the motion. The order of denial was elevated to
the Court of Appeals which affirmed the ruling of the trial court. Both the trial and the appellate courts
held that the suit may be brought in the Philippines under the pool partnership agreement among the
IATA members, which include Singapore Airlines and American Airlines, wherein the members act as
agents of each other in the issuance of tickets to those who may need their services. The contract of
carriage perfected in Manila between the private respondent and Singapore Airlines binds the petitioner
as an agent of Singapore Airlines and considering that the petitioner has a place of business in Manila, the
third option of the plaintiff under the Warsaw Convention i.e., the action may be brought in the place
where the contract was perfected and where the airline has a place of business, is applicable. Hence this
petition assailing the order upholding the jurisdiction of Philippine courts over the instant action.

ISSUE:

Whether the contract of transportation between the petitioner and the private respondent would be
considered as a single operation and part of the contract of transportation entered into by the latter with
Singapore Airlines in Manila.

RULING:

Yes. The contract of carriage between the private respondent and Singapore Airlines although performed
by different carriers under a series of airline tickets, including that issued by the petitioner, constitutes a
single operation. Members of the IATA are under a general pool partnership agreement wherein they act
as agent of each other in the issuance of tickets to contracted passengers to boost ticket sales worldwide
and at the same time provide passengers easy access to airlines which are otherwise inaccessible in some
parts of the world. Booking and reservation among airline members are allowed even by telephone and it
has become an accepted practice among them. A member airline which enters into a contract of carriage
consisting of a series of trips to be performed by different carriers is authorized to receive the fare for the
whole trip and through the required process of interline settlement of accounts by way of the IATA
clearing house an airline is duly compensated for the segment of the trip serviced. Thus, when the
petitioner accepted the unused portion of the conjunction tickets, entered it in the IATA clearing house
and undertook to transport the private respondent over the route covered by the unused portion of the
conjunction tickets, i.e., Geneva to New York, the petitioner tacitly recognized its commitment under the
IATA pool arrangement to act as agent of the principal contracting airline, Singapore Airlines, as to the
segment of the trip the petitioner agreed to undertake.

Under Art. 1(3) of the Warsaw Convention, it clearly states that a contract of air transportation is taken as
a single operation whether it is founded on a single contract or a series of contracts. The number of tickets
issued does not detract from the oneness of the contract of carriage as long as the parties regard the
contract as a single operation. The evident purpose underlying this Article is to promote international air
travel by facilitating the procurement of a series of contracts for air transportation through a single
principal and obligating different airlines to be bound by one contract of transportation. Petitioner’s
acquiescence to take the place of the original designated carrier binds it under the contract of carriage
entered into by the private respondent and Singapore Airlines in Manila.