Airasia Philippines moves operations hub to NAIA-4

AirAsia Inc. Philippines, an affiliate of low cost carrier giant AirAsia Group Berhad of Malaysia, is moving to Ninoy Aquino International Airport (NAIA) in Metro Manila after announcing it is ending its domestic and international flights from Clark International Airport in Pampanga.

AirAsia Group chief executive officer Tony Fernandes said in his Twitter account @tonyfernandes that AirAsia Philippines is moving to Manila through the Ninoy Aquino International Airport terminal 4 (NAIA-4).

“AirAsia Philippines is moving to Manila. More choice more value. The world’s best low cost airline going to NAIA,” Fernandes tweeted.

However, Fernandes said the suspension of domestic and international flights of AirAsia Philippines in Clark is only temporary.

“Clark routes will be temporarily suspended. We will be going back to Clark,” he said.

Fernandes made a courtesy call to President Benign Aquino III and Transportation Secretary Joseph Emilio Abaya early this week.

On Thursday, AirAsia Philippines chief executive officer Marianne Hontiveros told The STAR that the low cost carrier is temporarily suspending two domestic and two international flights from Clark after its affiliate Zest Airways Inc. booked heavy losses since its operations were suspended by the Civil Aviation Authority of the Philippines.

AirAsia Berhad owns 40 percent of AirAsia Philippines while Filipino investors led by Hontiveros together with Antonio “Tonyboy” Cojuangco Jr., and Michael Romero and AMCY Holdings Inc. of Ambassador Alfredo Yao control 60 percent.

AirAsia Philippines completed the acquisition of an 85 percent economic interest and 49 percent voting rights in ZestAir as well as a 100 percent interest in Yao’s Asiawide Airways Inc. last May 10 based on a strategic alliance agreement forged last March 11.

In exchange, Yao’s ZestAir got $16 million as well as 13 percent interest in AirAsia Philippines that operates two Airbus aircraft in Clark while ZestAir has a fleet of 12 Airbus aircraft operating at the NAIA4.

Hontiveros said in an interview that Clark-Kalibo and Clark-Davao flights would end on Oct. 8 while Clark-Taipei and Clark-Hong Kong flights would end on Nov. 6. The Clark-Hong Kong flights would resume on Dec. 20 in time for the Christmas season rush.

According to her, the decision to wind down domestic and international flights was reached during the meeting of the Board of Directors of AirAsia Philippines last Tuesday.

“The directive to me by the board of AirAsia is to cut further losses in AirAsia Inc. Philippines. The direct losses arising from the suspension of the operations of ZestAir which is very sizeable,” Hontiveros stressed.

Last Aug. 16, CAAP grounded the fleet of ZestAir due to six aviation safety concerns in violation of the Philippine Civil Aviation Regulation (PCAR).

The suspension of the Airline Operators Certificate (AOC) was lifted by CAAP on Aug. 20 after the carrier complied with all safety requirement. It was placed under heightened surveillance last July 31 due to the cancellation of several flights over the past few months.

Hontiveros said ZestAir suffered sizeable losses as the airline paid for the tickets of affected passengers in other airlines that are more expensive as well as hotel accommodations.

She added that the airline is also facing heavy penalties from China and Korea for canceled flights after its AOC was revoked by CAAP last August.

Sources placed the initial losses at around $10 million excluding the penalties that would be imposed by other countries.

Hontiveros said AirAsia Philippines needs to shore up its resources, pump in additional investments and improve the operations of ZestAir.

“I intend to shore up resources to be able to support the operations of ZestAir. We intend to pump in additional investments into ZestAir,” she said but refused to divulge exact figures.

Earlier, she said AirAsia Philippines is looking at increasing its current 49 percent stake in ZestAir.

AirAsia Philippines and ZestAir are expected to launch a rebranded airline in the next two months.