Air Asia keen on increasing stake in Zest Air

MANILA – The Philippine unit of Southeast Asia’s largest budget airline plans to increase its stake in Zest Airways Inc.

“Yes of course, we are open. The initiative should come from Ambassador (Alfredo) Yao on how much he is willing to sell. We’ve discussed it. I don’t want to preempt what Ambassador Yao wants to do,” Marianne Hontiveros, Air Asia Inc chief executive told reporters.

“Of course Zest is attractive to us. That is why we’re interested in the company,” she added.

Philippine AirAsia last March forged a partnership with Zest Air, allowing the former, which operates out of Clark, to gain access to the latter’s slots at the Ninoy Aquino International Airport. Philippines AirAsia holds an 85 percent economic stake and a 49 percent voting stake in Zest Air while the latter owns a 15 percent stake in the former.

AirAsia Group owns 40 percent of Philippines AirAsia. The remaining 60 percent is held by Hontiveros, Michael Romero, Antonio Cojuangco and Yao.

In a report to Bursa Malaysia, AirAsia Group said it expects Philippines AirAsia to be profitable next year, as the carrier’s network expands.

Philippines AirAsia, which started operations in the country in March last year incurred a net loss of $7 million in the second quarter of the year, a slight improvement from the $8 million in the same period in 2012.

Earlier, Centre for Asia-Pacific Aviation (CAPA) said in a report that the outlook for Air Asia’s Philippine unit is likely to improve once its operation is consolidated with Zest Airways.

“Zest changes the outlook for Philippines AirAsia considerably, particularly if the two carriers are able to fully integrate their operations,” CAPA said.

A single brand and product across the Philippine market, including both Manila and Clark, “should improve AirAsia’s position in the Philippines,” the report said.