AirAsia in talks to buy Zest Airways
Alliances in crowded budget carrier sector
Malaysia’s AirAsia group is making a move to acquire local budget airline Zest Airways in a bid to expand the regional giant’s foothold in the fast-growing Philippine market.
Highly placed Inquirer sources said that while nothing has been signed as of yet, negotiations were ongoing between AirAsia and the group of former ambassador and juice-drink magnate Alfred Yao.
In an interview on Wednesday, Yao confirmed that the company was in talks with several groups on the possible entry of new investors to help the airline compete in the country’s crowded budget carrier sector.
“We have been approached, but nothing is final yet. There are offers,” he told the Inquirer. Yao declined to confirm talks with the AirAsia group, owned by former music industry executive and Malaysian billionaire Tony Fernandes.
He said Zest Airways would make an appropriate announcement once a deal has been signed.
AirAsia already has a presence in the Philippines through local unit AirAsia Inc., a consortium between Fernandes, who owns 40 percent, and Antonio “Tonyboy” Cojuangco Jr., Michael Romero and Marianne Hontiveros, who own 20 percent each.
Constitutional restrictions bar foreigners from owning more than 40 percent of transportation companies. The same limitation applies to other utility firms, which are businesses considered as “imbued” with public interest.
AirAsia in the Philippines operates flights between the Clark Freeport in Pampanga and domestic routes like Davao, Puerto Princesa and Kalibo. The company also has international flights to Hong Kong, Macau and Kuala Lumpur.
AirAsia Malaysia, meanwhile, operates flights between Kuala Lumpur and the Clark International Airport in Pampanga. AirAsia Malaysia also has flights between the former military base and Kota Kinabalu.
Asked if flag carrier Philippine Airlines (PAL) was approached for a possible investment in Zest Airways, president Ramon S. Ang said, “Late tayo” (we were late).
Local AirAsia officials could not be reached for comment.
Data from the Civil Aeronautics Board (CAB) released last week showed the growth in the country’s international airline sector slowing to 7.34 percent in the first half, slower than the 11 percent booked last year.
Domestic demand, however, remained robust, with passenger traffic within the country growing 13.33 percent in the same six-month period.
Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94