The first cross-country flight in the Philippines was made on February 27, 1911, when Captain Thomas Baldwin flew 10 miles out of Manila on board a “Red Devil” biplane powered by a 60-horsepower Hall-Scott engine. A few years later, the Philippines became the pioneer in commercial aviation in Asia.
Today, there are about 39 active aviation schools in the country offering courses such as pilot training, aviation or aeronautical engineering, avionics, and aircraft technician. As of 2018, there are more than 6,000 licensed pilots and 4,000 student-license holders in the Philippines. Globally, it was projected that the world needed 255,000 new airline pilots in 2017 alone. By that year also, global commercial fleet is seen growing by 12,000 to about 37,000 aircraft. A total of 440,000 active pilots will be needed. Worldwide, there are 290,000 active pilots, of which 85,000 are in the Asia-Pacific region.
Applicable laws for domestic aviation
Domestic aviation is regulated by the Civil Code provisions on common carriers, the Civil Aeronautics Board law and the Civil Aviation Authority Act, as well as by the regulations issued by the Civil Aviation Authority of the Philippines (Caap).
For international air transport, the relevant international agreements covering liability are the Warsaw Convention, and the Montreal Convention of 1999. It is interesting to note that in the United States, passengers flying domestically benefit from unlimited liability on the part of their air carriers for damages of personal injury and death. With respect to passengers, the Warsaw regime and the Montreal Convention 1999 provide that “the carrier is liable for damage sustained in the case of death and bodily injury of a passenger upon condition only that the accident which caused the death or injury took place on board the aircraft or in the course of any of the operations of embarking or disembarking.”
Insurance requirements
Aviation insurance is highly specialized with several peculiarities differentiating it from a regular insurance. What is unique in aviation insurance is that there are no large numbers to provide a large premium base. Indeed, “the aviation insurance market has always differed from most other insurance markets in that both the premium base and the customer base are very narrow, with just a small number of insured.” Insurers would then usually only underwrite a small portion of the risk.
While the occurrence of accidents is very low, such occurrence, when it happens, can be catastrophic. An Airbus A380 aircraft, for instance, with full passenger load and exceeding a weight of 500 tons, crashing into a major city has a potential exposure of approximately
$3.25 billion.
There are various entities exposed to various aviation-related risks. These entities would include aircraft owners and operators, airport owners and operators, and aircraft product manufacturers.
The 2011 Revised Philippine Civil Aviation Regulations, promulgated by the Caap, requires, under Section 8.2.1.8 thereof, that “no person may operate a civil aircraft in general aviation operations unless it has within it the following current and approved documents: x x x (20) Aircraft insurance coverage.” Thus, in applying for a certificate of registration of an aircraft with the Caap, a certified true copy of the aircraft’s certificate of insurance must be attached to the application form. Section 8.2.1.8 requires among the documents that must be carried on the aircraft (all operations) “27) Aircraft insurance coverage.”
Finally, as a mandatory requirement, under Section 8.2.1.9, “No person may operate an aircraft unless it has a valid insurance guarantee covering aircraft hull, each person, freight and mail onboard aircraft and third parties liability, as prescribed by the Authority.” For leased aircrafts, the lessee is generally the party liable for the operation, maintenance and insurance of the aircraft. Hence, AIG, for example, offers the Caap required aircraft third-party liability insurance.
There are, however, other aviation risks, of which insurance cover is optional, such as: aircraft manufacturer insurance, air charter insurance, aerobatic or experimental aircraft insurance, airline insurance, airport or ground handler insurance, crew insurance, operator insurance, flight training insurance, hanger-keepers’ liability, hull war insurance, aviation personal accident and many more.
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Dennis B. Funa is the current insurance commissioner. Funa was appointed by President Duterte as the new insurance commissioner in December 2016. E-mail: dennisfuna@yahoo.com.