Philippines’ AirAsia Inc. (PAA), the local arm of Malaysia’s low cost carrier AirAsia Group, today entered into a share swap deal with Zest Airways Group of former ambassador and juice magnate Alfredo Yao.
Under the strategic alliance agreement signed at the Dusit Hotel in Makati City, Philippines’ AirAsia would acquire a 49 percent stake in ZestAir and 100 percent in Asiawide Airways—both under the ZestAir Group.
In turn, Yao’s group would subscribe to shares in Philippines’ AirAsia for a still undisclosed sum.
The “merger” could be a good deal because both airlines have rather big problems in the Philippines market. Zest is operationg out of NAIA-4 (Ye old domestic airport) and struggles with the permanently congested NAIA airspace. AirAsia’s base is Clark. The Clark business is crashing because the airport does not have enough handling capacity for passengers (500 pax/hour is maximum. And who wants to deal with tricycles, jeepneys and buses to arrive 2 or 3 hours later in Manila when one can fly directly to Manila.
Zest Air is also often called “Pest Air” because of their lousy China made, ear shattering MA-60 that get in troubles all around the nation.