AirAsia Buys Into Philippine's Zest Airways
The Philippine unit of Asia's biggest budget airline AirAsia has agreed to acquire 49 percent of small-scale regional carrier Zest Airways, as it moves to turn its Philippines business into a moneymaking operation.
AirAsia, which has moved aggressively into new markets and placed huge jet orders, said last month it wants to focus on its core Malaysian, Thai and Indonesian routes, then grow its Philippines and Japanese routes profitably.
Philippines AirAsia, which is 40 percent owned by Malaysia-listed AirAsia, will acquire the stake in Manila-based Zest Airways via a share swap. Both firms declined to give the value of the deal.
Zest has a fleet of only 11 aircraft, compared with AirAsia which has more than 100 in service and hundreds more on order.
Zest flies from Manila's Ninoy Aquino Airport to other cities in the Philippines, plus Shanghai and Taipei.
Philippines AirAsia, which is 60 percent owned by a Filipino group that includes chief executive Marianne Hontiveros and Antonio "Tonyboy" Cojuangco, competes with budget carrier Cebu Air in the Philippines. As well as domestic destinations, it runs operates flights to Kuala Lumpur and Kota Kinabalu in Malaysia.
"This strategic partnership is all about growing the market," AirAsia group chief executive Tony Fernandes told reporters.
Zest's owner, Philippine businessman Alfredo Yao, will get a 15 stake in the AirAsia unit.
Last week the Indian government approved AirAsia's proposal to set up an airline jointly with the Tata group, paving the way for the first foreign carrier to enter the Indian domestic aviation sector.