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Paolo G. Montecillo

Philippine Daily Inquirer

Publication Date : 12-03-2013

The local unit of Malaysia’s AirAsia and Alfred Yao’s Zest Airways have joined forces in a “dream merger” that will take on bigger rivals that dominate the country’s air travel industry.

AirAsia Philippines and Zest Airways formally announced yesterday a strategic alliance that would involve the integration of operations of both airlines. The two brands, however, will continue to operate as separate entities.

“This gives us the critical mass to build something special,” Malaysian businessman and AirAsia group CEO Tony Fernandes said in a speech following the announcement.

Under the strategic alliance, the two groups agreed to a share swap with AirAsia Philippines getting a 49-per cent stake in Zest Airways. In exchange, Yao will get a 15-per cent interest in AirAsia Philippines.

Yao’s stake will come from AirAsia Philippines’ existing Filipino shareholders, namely, the company’s CEO Marianne Hontiveros, vice chair Michael Romero and chair Antonio “Tonyboy” Cojuangco. Each of the original shareholders will give up 5 per cent of their current 20 per cent to Yao.

Once the transaction has been completed, all four Filipino shareholders will own 15 per cent of AirAsia Philippines, while the remaining 40 per cent will stay with Malaysia’s AirAsia Berhad.