AirAsia Philippines Unveils Expansion Plan


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BUDGET carrier AirAsia Philippines disclosed plans to strengthen its partnership with the AirAsia Group, after the European Union lifted a safety-related ban on European destinations two weeks ago.

“We are expanding. We will have a board meeting on July 3. We plan to interconnect with AirAsia, the long-haul unit of the AirAsia Group,” said former Philippine ambassador Alfredo Yao, who owns a 13-percent stake the AirAsia Philippines by virtue of the latter’s takeover of 49 percent of his family-owned Zest Airways Inc.

The Civil Aviation Authority of the Philippines (CAAP) and the European Union (EU) will give an update on the EU Air Safety List on June 25, he said.

“Our plan is to have one operation in the Philippines and call it AirAsia Philippines. We’ve just … secured approval from the SEC [Securities and Exchange Commission]. We will now apply with CAB [Civil Aeronautics Board] and CAAP,” said Joy Cañeba, chief executive officer of AirAsia Zest. The AirAsia Zest brand was formally launched last year.

“The local governments in most of the provinces where we are operating have recognized the value of AirAsia in the Philippines and they’ve been very supportive to us,” said Cañeba, but did not give a timeline to consolidate its business in the Philippines.

Meanwhile, AirAsia Group and Chief Executive Officer (CEO) Tony Fernandes confirmed the Asia-based airlines’ plans to invest in AirAsia Philippines, adding: “Yes, we want to invest more. The Philippines is actually the best (area for the company). The grounding of the airline was a massive blow for us. Now, there’s some light [at the end of] the tunnel.”

The airlines will now apply for separate approvals from the CAB and the CAAP, said Fernandes.

In March 2013, AirAsia Philippines and Zest Airways signed a strategic partnership with AirAsia, Asia’s largest budget carrier, acquiring a 49-percent stake in Zest Air and 100 percent in Asiawide Airways—both under the Zest Air Group.

Zest Air is a low-cost carrier that operated from Pasay City’s Ninoy Aquino International Airport.

The AirAsia Group has a combined fleet of 120 aircraft and 350 other planes, with operations in Malaysia, Thailand, Indonesia, Japan, the Philippines and India, flying on 158 routes across 18 countries.

AirAsia Philippines has a load factor of 65 percent, up 6 percentage points from 59 percent recorded during the third quarter of last year, company records show.

In July 2013, the EU allowed Philippine Airlines (PAL) to resume flights to Europe after a three-year ban. Cebu Pacific, another budget airline, also exited from the EU’s ban.

EU’s total lifting of bans on Philippine carriers will be announced by CAAP Director General Lt. Col. William K. Hotchkiss 3rd and Mr. Lubomir Frebort, Charges d’ Affaires, a.i., EU Delegation to the Philippines on June 25.

Source: Rosalie Periabras, Manila Times

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