Cebu Pacific inks P1.75-B deal to buy AirSwift

Photo from Cebu Pacific

Budget carrier Cebu Pacific will soon operate direct flights to popular tourist destination El Nido, Palawan, following its purchase of Zobel family-led boutique airline AirSwift Transport Inc. for P1.75 billion.

On Monday, the Gokongwei-led airline announced it had inked the share purchase agreement with Ayala Land Inc. (ALI) subsidiary ALI Capital Corp.

“We are excited to play our part in increasing accessibility to local destinations that have high potential and are world-renowned for having some of the best beaches in the world,” Cebu Pacific president and chief commercial officer Xander Lao said in a statement on Monday.

AirSwift flies from Manila and Clark to El Nido and from El Nido to Cebu, Boracay, Coron and Bohol.

“With this transaction, we are hopeful that the expertise of Cebu Pacific will bring lower cost options and greater accessibility to El Nido,” ALI Capital president Alfonso Javier Reyes said.

Integrating El Nido route to Cebu Pacific’s domestic network of 35 local destinations is seen to translate revenue growth for the airline amid the postpandemic travel boom.

El Nido, revered because of its pristine beaches, received the most visitors in Palawan with over half a million guests last year. The country’s largest province in terms of geographical size saw its tourist arrivals grow by 87 percent to 1.5 million while tourism receipts rose by 88 percent to P52.7 billion last year.

China Bank Capital Corp. managing director Juan Pablo Colet told the Inquirer this acquisition would enable Cebu Pacific to “gain a bigger share of the promising leisure travel market” as it is set to cater to the premium customer segment.

“By expanding its presence in El Nido and complementing its existing routes in Palawan, Cebu Pacific aims to capitalize on the resurgence of domestic tourism while positioning itself for future growth,” Regina Capital Development Corp. head of sales Luis Limlingan added.

No changes in AirSwift’s flight schedules and services will be implemented post-sale.

This acquisition came just a week after Cebu Pacific finalized its P1.4-trillion order of up to 152 jets with European aircraft manufacturer Airbus.

By 2029, Cebu Pacific will start taking delivery of the new aircraft. The company set a minimum commitment of 70 aircraft but it can buy more depending on the travel demand moving forward.

The additional fleet will allow the low-cost carrier to have a bigger foothold outside Metro Manila, including Davao, Cebu and Clark.

“The [AirSwift] deal aligns with the broader strategic view that the Philippines is poised for strong tourism growth, so Cebu Pacific has been investing in fleet and network expansion to better capture travel demand from different customers,” Colet said.

This month, the low-cost airline will launch the Manila-Chiang Mai route—the only direct flight to the popular northern Thai city from the country. It also recently started flights from Manila to Don Mueang in Bangkok and routes from Cebu to Don Mueang, Osaka, Masbate and San Vicente.

Meanwhile, Colet noted the divestment would allow “Ayala Land to better focus on its core property business and deploy the sale proceeds to real estate projects.”