Rebranding of Zest Air seen as early as September

Zest Air could pursue its “rebranding” as early as next month, in line with a strategy by Malaysia’s AirAsia Bhd., which acquired a minority stake in Zest in March.

Marianne Hontiveros, CEO of Philippines AirAsia, said that the rebranded airline would include both the names of Zest Air, which was established by juice magnate Alfredo Yao, and AirAsia, which is considered the biggest budget airline in the region. She said both airlines would continue to be operated separately.

The rebranding, meanwhile, would still be subject to the approval of the Civil Aeronautics Board (CAB) and the Securities and Exchange Commission, Zest Air director Joy Caneba said in a separate interview.

“Zest has got a brand name bigger than AirAsia in the Philippines. But the AirAsia brand is very valuable,” Hontiveros told reporters. She said they were considering to launch the rebranding in September or October.

“We are already [working on] standardizing our operations and our look. Even the uniforms. You will see there will be a change in Zest, moving toward the red color,” she added, referring to AirAsia’s signature red color.

The Malaysian budget airline’s interests are held through AirAsia Inc. (Philippines), which owns 49 percent of Zest. AirAsia is 40-percent owned by AirAsia Bhd. Yao owns the rest of Zest and has a 15-percent stake in Philippine AirAsia.

The acquisition widened AirAsia’s presence in the country while giving it access to valuable slots at the Ninoy Aquino International Airport in Manila.

Philippines AirAsia has two aircraft at the Clark International Airport in Pampanga while Zest operates 13 planes, of which two are leased from AirAsia.

The move to relaunch Zest would prove beneficial, think tank Capa-Center for Aviation said in a report on August 27, especially if the two airlines decided to merge.

“Zest changes the outlook for Philippines AirAsia considerably, particularly if the two carriers are able to fully integrate their operations. AirAsia started selling Zest-operated flights on its website in May 2013 but the carriers remain separate and have two different products,” Capa said.

“A single brand and product across the Philippine market, including both Manila and Clark, should improve AirAsia’s position in the Philippines,” Capa said even as it noted risks from growing competition from domestic and regional budget carriers.

Philippines AirAsia currently corners a market share of 0.6 percent in the domestic market while Zest has about 10 percent, data from the CAB showed.

Zest flies to China, South Korea, Malaysia and to domestic destinations Kalibo (Boracay), Cebu, Davao, Iloilo, Bacolod, Tagbilaran, Tacloban, Cagayan de Oro and Puerto Princesa.

Hontiveros said Philippines AirAsia was studying new routes in the region like Japan.