AirAsia, ZestAir forge joint venture agreement-A A +A
Monday, March 11, 2013
MANILA -- The Philippines AirAsia has entered into strategic alliance agreement with the Zest Airways Incorporated and Asiawide Airways Incorporated (collectively known as the Zest Air Group.
Under the agreement, the AirAsia is expected to acquire 49 percent of common stock of Zest Airways and 100 percent of Asiawide Airways.
Ambassador Alfredo Yao, majority shareholder of Zest Airways, in return will subscribe to AirAsia shares.
Officials of the two airlines said the agreement contemplates various regulatory approvals to be obtained prior to completion of the transaction.
To further strengthen the partnership, Philippines AirAsia will infuse additional funds to augment their working capital.
Marrianne Hontiveros, chief executive officer of PAA, said “today’s alliance between our two local carriers brings pride and joy to Philippines AirAsia.”
“I am especially delighted to have Ambassador Yao of ZestAir as a partner as he shares a common vision to provide passengers with the best value fare possible which enables them to fly to various destinations,” Hontiveros said.
She added that their proposed investment in the Zest Air Group will complement the strategies for the growth of Philippines AirAsia, which currently operates in Clark International Airport.
“This will allow us to leverage on our respective strengths, which in the case of Zest Air, include its operations out of the Ninoy Aquino International Airport. The stockholders of PAA welcome this partnership with Ambassador Yao, a seasoned entrepreneur who is well regarded in the Philippines,” Hontiveros added.
She clarified that the two airlines will operate separately and that the Philippines AirAsia will stay in Clark.
The AirAsia Group consists of operations in Malaysia, Thailand, Indonesia, Japan and the Philippines, and India, making the airline the largest low-cost carrier in Asia with a combined fleet of 120 aircraft.
The group, which intends to acquire 350 more aircraft, operates over 158 routes across 18 countries.
The AirAsia Group eyes enormous growth in the aviation industry in the Philippines, which has a population of over 100 million.
For this part, Yao said they are delighted with the alliance with AirAsia Incorporated.
“It provides great opportunity realize the carrier’s common vision to widen the choice of low-cost travel within the Philippines and the region. The goal is ZestAir is driven by my passion to capitalize on the tourism potential and, hence, our investment to quickly increase our fleet and expand Zest’s market share,” Yao said.
Zest Air will acquire 15 percent from the three Filipino shares (60 percent) of the Philippines AirAsia, which is a joint venture amongst Hontiveros, PAA Chairman Antonio Cojuanco, Michael Romero, and AirAsia Investment Limited.
Cojuangco said he is excited about the alliance as it will take both companies to greater heights.
The Philippine aviation market has tremendous potential, according to Cojuangco. “Bringing the two carriers together will definitely realize this potential.”
Hontiveros and Yao signed the strategic partnership agreement during a simple ceremony at the Dusit Thani Hotel Makati yesterday.
Published in the Sun.Star Pampanga newspaper on March 12, 2013.