Monday, 16 March 2009

Philippines' Zest Airways to acquire 7 new aircraft

Manila Bulletin
http://www.mb.com.ph/node/199058

Zest Airways Inc., formerly Asian Spirit, is investing $150 million this year for the acquisition of five brand new aircraft to beef up its existing seven aircraft as the company adds new local destinations and regional routes.

Donald Dee, Zest Air chairman, said the new fleet acquisition would include two airbuses worth $100 million and three turbo jets to complete its refleeting program.

This means that Zest Air would have a total of 11 aircraft flying to tourist destination areas.

Last year the company spent $170 million for capital expenditure, Dee said.

Dee said the airbuses would be serving both existing and new destinations. At present, Zest Air

flies from Manila to Virac in Catanduanes, Busuanga, San Jose (Mindoro), Marinduque, Cebu, Calbayog, Catarman and Caticlan.

Today, March 16, Zest Air will add Puerto Princesa, Naga, Legaspi, Iloilo, Kalibo, Tacloban, Bacolod and Tagbilaran.

Within the year, the company is also expected to launch its regional routes that may include Hong Kong, Macau, Beijing, Xiamen, Kota Kinabalu, Kuala Lumpur, Singapore and Japan.

"We have a good fighting chance, we are competing head-on with the big two market players for Caticlan and Cebu," Dee said but refused to reveal its passenger load factor except to say that they a poor third for now.

The Zest-O Group of Companies, which is owned by businessman Alfredo Yao, acquired Zest Air, formerly Asian Spirit, in the second quarter last year but only took over operations in July of same year.

Yao also has a pending acquisition bid for another small airline Sea Air, which caters to specific tourist destinations in the country. Negotiations, however, have been on an on-and-off basis.

Dee noted that the negotiations have dragged too long but refused to say if the Zest-O Group has already shelved the acquisition bid.

Zest Airways, which is still using the old domestic terminal, is also prepared to transfer to the NAIA 3 before end of this year.

Earlier, Yao said that his entry into the airline business was in anticipation of the country’s booming tourism industry.

He said the country’s tourism industry was not affected by the global economic meltdown saying that it would be cheaper for tourists from neighboring countries such as China, Korea and Japan to go to the Philippines instead of the U.S. and Europe.

"Why not look at the good side, our country is a tourist destination, it has beaches and golf courses that are more attractive than Thailand’s," Yao said.

Yao also pointed out that the Philippines is a lot closer to Japan and Korea than Thailand.

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