Civil Aeronautics Board

History, Background and

Mandates
Law/Issuances Date Significance
Act No. 3909 11/20/1931 - The development and encouragement of civil aeronautics commenced.
- The Secretary of Commerce and Industry was given the authority of administering and enforcing the provisions of
the said law.
Act No. 3996 12/5/1932 - Amended Act No. 3909
- Created the Division of Aeronautics, is responsible for the administration of civil aviation under the general
supervision of the Secretary of Public Works and Communications.

Commonwealth 11/12/1936 - Created the Bureau of Aeronautics under the Department of Public Works and Communications.
Act No. 168 - The Director of the Bureau of Aeronautics was charged with the responsibility and the authority to carry out the
purpose and intent of the provisions of said Act.
- Some of the Powers and Duties are:
a. Designation and establishment of civil airways and maintenance along such airways all necessary emergency
and intermediate landing fields and other air navigation facilities
b. To conduct research and experimentation regarding the possibility of aircraft construction and the use of
Philippine products in such construction.
c. To make available navigation facilities of Government for public use.
d. To acquire and operate such aircraft and air navigation facilities as may be necessary for executing the duties
and functions prescribed by this Act.
e. To investigate accidents
f. To issue permits and licenses

Commonwealth 5/11/1940 - the general control and supervision of the Bureau of Aeronautics was transferred to the Department of National
Act No. 529 Defense
- This transfer included the power to issue permits and licenses to operators to engage in air commerce.
Law/Issuances Date Significance
Administrative 7/30/1946 - Created the Civil Aeronautics Commission.
Order No. 7 - This body was charged with the responsibility of studying applications for permits and recommending issuance of
permits and licenses on establishment of civil airways or routes. The Commission’s reports and recommendations
are submitted to the President through the Secretary of National Defense for appropriate action.

Administrative 8/24/1946 - Granted the agency the additional duty of processing application of foreign companies to engage in air commerce
Order No. 10 in the country.

Executive Order 10/4/1947 - Created the Civil Aeronautics Board and the Civil Aeronautics Administration
No. 94 - Abolished the Civil Aeronautics Commission and the Bureau of Aeronautics
- Both offices were placed under the general control and supervision of the Secretary of Commerce and Industry. 
- Under this set-up, the CAB was vested with the functions relating to the economic aspects, while the CAA was
charged the operational and technical phases of air transportation.
Law/Issuances Date Significance
Administrative 7/30/1946 - Created the Civil Aeronautics Commission.
Order No. 7 - This body was charged with the responsibility of studying applications for permits and recommending issuance of
permits and licenses on establishment of civil airways or routes. The Commission’s reports and recommendations
are submitted to the President through the Secretary of National Defense for appropriate action.
Administrative 8/24/1946 - Granted the agency the additional duty of processing application of foreign companies to engage in air commerce
Order No. 10 in the country.
Executive Order 10/4/1947 - Created the Civil Aeronautics Board and the Civil Aeronautics Administration
No. 94 - Abolished the Civil Aeronautics Commission and the Bureau of Aeronautics
- Both offices were placed under the general control and supervision of the Secretary of Commerce and Industry. 
- Under this set-up, the CAB was vested with the functions relating to the economic aspects, while the CAA was
charged the operational and technical phases of air transportation.
R.A. 776 6/20/1952 - Repealed E.O. No. 94
- Recognized both the Civil Aeronautics Board and the Civil Aeronautics Administration. 
- The powers and duties of the CAB and the CAA were specifically delineated.
- Mandates the CAB to regulate, promote and develop the economic aspect of air transportation in the Philippines
and ensure that existing CAB Policies are adapted to the present and future air commerce of the Philippines.
- Vests supervision, jurisdiction and control over all carriers engaged in air commerce in the Philippines as well as
their property, equipment, franchise and facilities.

Presidential 9/21/1972 - The CAB was placed under the newly created Department of Tourism
Decree No. 189 - To assist the same in this drive to promote and cultivate the tourism industry in this country.
and
Proclamation
No. 1981
Executive Order 4/13/1987 - The Civil Aeronautics Board was transferred to the Department of Transportation and Communications as an
No. 125 attached agency.
Bill of Rights for Air
Passengers
Case Doctrines
British Airways vs. Court of Appeals
G.R. No. 121824
• The contract of air transportation was exclusive between Mahtani and BA. It is undisputed that
PAL, in transporting Mahtani from Manila to HK, acted as the agent of BA. It is a well-settled rule
that an agent is also responsible for any negligence in the performance of its function and is liable
for damages which the principal may suffer by reason of its negligent act. Since the instant
petition was based on breach of contract of carriage, Mahtani can only sue BA and not PAL, since
the latter was not a party to the contract. However, this is not to say that PAL is relieved from any
liability due to any of its negligent act.
Collin A. Morris vs. Court of Appeals
G.R. No. 127957
• In awarding moral damages for breach of contract of carriage, the breach must be wanton and
deliberately injurious or the one responsible acted fraudulently or with malice or bad faith.
Where in breaching the contract of carriage the defendant airline is not shown to have acted
fraudulently or in bad faith, liability for damages is limited to the natural and probable
consequences of the breach of obligation which the parties had foreseen or could have
reasonably foreseen. In that case, such liability does not include moral and exemplary damages.
Moral damages are generally not recoverable in culpa contractual except when bad faith had
been proven. However, the same damages may be recovered when breach of contract of carriage
results in the death of a passenger.
Philippine Airlines, Inc. vs. Ramos
G.R. No. 92740
• When the private respondents purchased their tickets, they were instantaneously bound by the
conditions of the contract of carriage particularly the check-in time requirement. The terms of the
contract are clear. Their failure to come on time for check-in should not militate against PAL. Their
non-accommodation on that flight was the result of their own action or inaction and the ensuing
cancellation of their tickets by PAL is only proper.
Sarreal, Sr. vs. Japan Airlines Co. Ltd
G.R. No. 75308
• Certainly, a man of such stature was aware of the restrictions carried by his ticket and the usual
procedure that goes with traveling. The petitioner ought to know that it was still necessary to
verify first from Thai International if they would honor the endorsement of his JAL ticket or
confirm with the airline if he had a seat in the July 2 flight. JAL cannot now be faulted for the
petitioner's omission or negligence.
Pan American World Airways, Inc. vs. Intermediate Appellate
Court,
G.R. No. 68988
• Article 2220 of the Civil Code says that moral damages may be awarded in “breaches of contract
where the defendant acted fraudulently or in bad faith.” So, proof of infringement of an
agreement by a party, standing alone, will not justify an award of moral damages. There must, in
addition, as the law points out, be competent evidence of fraud of bad faith by that party. If the
plaintiff, for instance, fails to take the witness stand and testify as to his social humiliation,
wounded feelings, anxiety, etc., moral damages cannot be recovered. The rule applies, of course,
to common carriers.
British Airways, Inc. v. Court of Appeals 12th Division, First
International Trading and General Services
G.R. No. 92288
• In dealing with the contract of common carriage of passengers for purpose of accuracy, there are
two (2) aspects of the same, namely: (a) the contract "to carry (at some future time)," which
contract is consensual and is necessarily perfected by mere consent (See Article 1356, Civil Code
of the Philippines), and (b) the contract "of carriage" or "of common carriage" itself which should
be considered as a real contract for not until the carrier is actually used can the carrier be said to
have already assumed the obligation of a carrier. (Paras, Civil Code Annotated, Vol. V, p. 429,
Eleventh Ed.) In the instant case, the contract "to carry" is the one involved which is consensual
and is perfected by the mere consent of the parties.
Philippine Airlines Inc. v. Court of Appeals
G.R. No. 50504-05

• Bad faith which would justify an award of moral and exemplary damages for breach of contract of
carriage means a breach of a known duty through some motive of interest or illwill. 
• Petitioner's agents, by giving permission to board Flight 296R to persons who were not among
those with valid confirmations and who consequently had no right to be given preference in
taking said flight, deliberately created a situation that would place, as it did place, petitioner in
arrant violation of its contract with private respondents who were "bumped off" by reason
thereof. 
Japan Airlines v. Court of Appeals
G.R. No. 118664

• When a party is unable to fulfill his obligation because of force majeure, the general rule is that
he cannot be held liable for damages for non-performance. When JAL was prevented from
resuming its flight to Manila due to the effects of the eruption, whatever losses or damages in the
form of hotel and meal expenses the stranded passengers incurred cannot be charged to JAL. It
was not the fault or negligence of the JAL. JAL had the duty to arrange the respondents’ flight
back to Manila.
• However, it failed to look after the comfort and convenience of its passengers when it made the
passengers arrange their flight back to Manila on their own and after waiting in the airport for a
whole day.
 
Philippine Airlines Inc. v. Court of Appeals and Pedro Zapatos
G.R. No. L-82619

• PAL's diversion of its flight due to inclement weather was a fortuitous event. Nonetheless, such
occurrence did not terminate PAL's contract with its passengers. Being in the business of air
carriage and the sole one to operate in the country, PAL is deemed equipped to deal with
situations as in the case at bar. What we said in one case once again must be stressed, i.e., the
relation of carrier and passenger continues until the latter has been landed at the port of
destination and has left the carrier's premises. Hence, PAL necessarily would still have to exercise
extraordinary diligence in safeguarding the comfort, convenience and safety of its stranded
passengers until they have reached their final destination. 
Sources
• http://www.cab.gov.ph/retrieveMandates.php?id=8
• http://www.cab.gov.ph/summary-of-the-rights-of-air-passengers