AirAsia acquires stake in Philippines’ Zest
AirAsia has entered into a new partnership with Zest Airways that will see it acquire a 49% equity stake in the Philippine carrier.
Under a new ‘Strategic Alliance Agreement’ between Philippines AirAsia (PAA) and Zest’s majority shareholder, Alfredo Yao, AirAsia’s Clark-based subsidiary will purchase 49% of the common stock of Zest Airways, as well as 100% of Asiawide Airways. In turn, Yao will become a shareholder in PAA.
“This proposed investment in the Zest Group will complement the strategies for future growth of PAA, which currently operates out of Clark,” said Marianne Hontiveros, CEO of PAA. “This will allow us to leverage on our respective strengths, which in the case of Zest Air, include its operations out of the Ninoy Aquino International Airport (NAIA), which constitutes a majority of the air traffic in the Philippines, and a strong domestic network which feeds into its current international routes,” she added.
Following the acquisition, PAA said it would “infuse funds” into Zest Air. Currently Zest operates a fleet of 15 aircraft on both domestic and international routes from NAIA and Cebu. Ten of these are Airbus A320 aircraft, as operated by AirAsia, and Yao said the airline’s fleet would expand in future.
“This strategic alliance with AirAsia… provides a great opportunity to realise both carriers’ common vision to widen the choice of low-cost travel within the Philippines and the region,” Yao said. “The goal in Zest Air is driven by my passion to capitalise on the tourism potential and, hence, our investment to quickly increase our fleet and expand Zest’s market share.”
The partnership will enable Zest to complete for a greater slice of the growing Philippines aviation sector, in which it is currently competing against low-cost giant Cebu Pacific Air, Tiger Airways-backed SEAir, and resurgent national carrier, Philippines Airlines.