AirAsia Zest moves to expand share in PH market

AirAsia Zest, a budget carrier partly owned by Malaysian low-cost giant AirAsia, plans to sharply increase its market share as it expands its fleet and adds new routes as competitors also turn more aggressive, its top official said in an interview.

AirAsia Zest CEO Alfredo Yao, the airline’s controlling shareholder, said the company would be adding at least two mid-range Airbus planes this year to fly to new destinations like Japan and more cities in China.

Yao, who is expected to sell control of AirAsia Zest to AirAsia Philippines after he obtains Congressional approval, said he was planning “to stay on and be part of the merged company” to help execute its growth strategies.

AirAsia Zest, which operates a fleet of 13 mid-range Airbus plans out of its main hub in Manila, had a 10-percent share of the domestic market last year, data from the Civil Aeronautics Board showed.

This could rise to 15 percent this year with the airline’s ongoing expansion, said Yao, who is also behind the Zest-O juice brand.

“The way I look at it, it’s still going up, the air transport business,” Yao told the Inquirer. “The market continues to grow and there is no need to grab and get the market of competitors.”

He said these sentiments were shared by AirAsia founder Tony Fernandes, during President Aquino’s recent state visit to Malaysia.

“Together with Tony Fernandes, we say that we are very bullish about Philippine tourism, that we will keep expanding the Philippine market,” he said.

Within Southeast Asia, AirAsia Zest is also studying direct flights from Kuala Lumpur to Davao, amid fresh opportunities in Mindanao given the peace talks with the militant group Moro Islamic Liberation Front, where the Malaysian government played a key role, Yao said.

“We are also looking at other places in Mindanao,” he said. The airline already announced direct flights from the Malaysian capital to Kalibo, near Boracay Island, and Cebu City.

The move comes amid the consolidation in the domestic industry. Recently, dominant budget carrier Cebu Pacific Air, led by the Gokongwei family, acquired 100 percent of Tigerair Philippines in a move that would increase its domestic market share to almost 56 percent from 50 percent.

Competitors like Philippine Airlines, which leads local rivals in the international market, has also been beefing up its fleet.

Right now, Yao said he was waiting for the congressional approval for the sale of his shares in AirAsia Zest to AirAsia, which already owns 49 percent. The House of Representatives has reportedly approved the transaction and the Senate also has to approve the deal.

Yao intends to remain with the company, possibly as a minority shareholder.