FedEx License To Fly Within the Philippines Imperiled

FedEx Express awaits the result of Supreme Court proceedings in the Philippines that could determine its ability to fly freight within the archipelago.

The case centers on the question of the validity of FedEx’s International Airfreight Forwarder License, issued by the Philippines’ Civil Aeronautics Board (CAB) in May 2011. Philippine law requires 60-percent domestic ownership of “public utilities”–including businesses that offer to the public services such as air-freight forwarding. Nevertheless, since 1946 the CAB and the Philippine Department of Justice have issued multiple opinions exempting purely international transportation and communication services. This past January, however, the country’s Court of Appeals disagreed, ruling in favor of two Filipino freight-forwarding companies that argued that the CAB should revoke FedEx’s license due to its status as a 100-percent foreign-owned and -based corporation.

The Court of Appeals denied FedEx’s first appeal on June 6, but didn’t publicize its decision until the third week of July.

Should the Supreme Court concur with the Court of Appeals, the decision could carry implications for more than 30 foreign-owned freight companies that hold International Airfreight Forwarder licenses issued by the CAB, according to FedEx.

The decision, however, would not affect its license to transport goods into and out of the Philippines. “Further transport of goods from Philippine airports to consignees or vice versa can be undertaken by subcontractors, as FedEx has done for many years in the past, or by a company established with 60-percent Filipino ownership,” said FedEx in a statement sent to AIN last week.

FedEx investment in the Philippines includes an allocation of more than 500 million Philippine pesos ($11.5 million) in the past year to the construction of the new facilities at the Manila and Cebu international airports, Clark customer service offices and Manila district headquarters, according to the company.

“We have created 315 new jobs in FedEx Philippines,” said FedEx. “We have also contracted with Filipino companies who have added 350 new jobs to support our brokerage, pickup and delivery services.”