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Philippine Airlines, Inc. vs. Civil Aeronautics Board and Grand International Airways G.R. No. 119528, March 26, 1997
207 SCRA 538

FACTS:
Private respondent GrandAir applied for a Certificate of Public Convenience and Necessity with the Civil Aeronautics Board (CAB). This application was opposed by petitioner PAL which is a holder of a legislative franchise to operate air transport services alleging that that the CAB had no jurisdiction to hear the petitioner’s application until GrandAir has first obtained a franchise to operate from Congress.

ISSUE:
WON the CAB had the jurisdiction to hear the application because GrandAir did not possess a legislative franchise.

WON Congress, in enacting Republic Act 776, has delegated the authority to authorize the operation of domestic air transport services to the respondent Board, such that Congressional mandate for the approval of such authority is no longer necessary.

RULING:
Yes. The Civil Aeronautics Board has the authority to issue a Certificate of Public Convenience and Necessity, or Temporary Operating Permit to a domestic air transport operator, who, though not possessing a legislative franchise, meets all the other requirements prescribed by the law.

There is nothing in the law nor in the Constitution, which indicates that a legislative franchise is an indispensable requirement for an entity to operate as a domestic air transport operator. Although Section 11 of Article XII recognizes Congress’ control over any franchise, certificate or authority to operate a public utility, it does not mean Congress has exclusive authority to issue the same. Franchises issued by Congress are not required before each and every public utility may operate. In many instances, Congress has seen it fit to delegate this function to government agencies, specialized particularly in their respective areas of public service.

Congress, gave CAB the power to issue permits for the operation of domestic transport services. It has delegated to the said body the authority to determine the capability and competence of a prospective domestic air transport operator to engage in such venture.

NOTES:

• The use of the word “necessity”, in conjunction with “public convenience” in a certificate of authorization to a public service entity to operate –
  Many and varied are the definitions of certificates of public convenience which courts and legal writers have drafted. Some statutes use the terms “convenience and necessity” while others use only the words “public convenience.” The terms “convenience and necessity”, if used together in a statute, are usually held not to be separable, but are construed together. Both words modify each other and must be construed together. The word ‘necessity’ is so connected, not as an additional requirement but to modify and qualify what might otherwise be taken as the strict significance of the word necessity. Public convenience and necessity exists when the proposed facility will meet a reasonable want of the public and supply a need which the existing facilities do not adequately afford. It does not mean or require an actual physical necessity or an indispensable thing. “The terms ‘convenience’ and ‘necessity’ are to be construed together, although they are not synonymous, and effect must be given both. The convenience of the public must not be circumscribed by according to the word ‘necessity’ its strict meaning or an essential requisites.” The use of the word “necessity”, in conjunction with “public convenience” in a certificate of authorization to a public service entity to operate, does not in any way modify the nature of such certification, or the requirements for the issuance of the same. It is the law which determines the requisites for the issuance of such certification, and not the title indicating the certificate.

Philippine Airlines, Inc. vs. Civil Aeronautics Board and Grand International Airways G.R. No. 119528, March 26, 1997