MANILA - (UPDATE 2, 6:52 p.m.) The Philippine unit of Southeast Asia's largest budget airline will suspend all of its local and regional flights out of Clark. According to a source, AirAsia Philippines flights to Davao, Kalibo, Hong Kong and Taipei from Clark will be suspended starting November. However, Hong Kong and Taipei flights will resume by December, the source said.
Sought for comment, Marianne Hontiveros, chief executive of Air Asia Inc, confirmed that the airline will suspend Kalibo and Davao flights effective October 9, with the last flight scheduled on October 8. For Taipei and Hong Kong, AirAsia Philippines will stop operations on November 6. "We will resume our operation to Hong Kong on December 20 to January 5," Hontiveros however said, adding that Taipei flights will remain suspended because of weak demand. "The reason for the suspension is that we need to support Zest Air financially," she said. Hontiveros said Zest Air incurred "significant losses" after the Civil Aviation Authority of the Philippines (CAAP) suspended its operations last month because of safety concerns. Losses reached P70 million a day, or about P280 million during the four-day suspension, she said.
Hontiveros said AirAsia Philippines will seek financial support from Air Asia Malaysia to prop up Zest Air. She said affected passengers for the Davao, Kalibo, Taipei and Hong Kong flights can either refund or rebook on a later date using Zest Air. Hontiveros said no AirAsia employee would be terminated.
Wyrlou Samodio, Civil Aeronautics Board head for legal affairs, said AirAsia Philippines informed the government of the planned suspension. "We want to make sure that there's a contingency," Samodio said. He said the airline wants to put up a hub in Manila, adding that AirAsia owner Tony Fernandes revealed his plans to President Benigno Aquino III and Transport Secretary Joseph Emilio Abaya during a courtesy call earlier this year.
AirAsia Philippines 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. AirAsia Philippines 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 Alfredo Yao.
Zest Air and AirAsia has sought Civil Aeronautics Board approval of a plan to allow cross-selling of flights. Think-tank 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 Air. "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.
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