Focus on tourism for Philippine budget carrier Zest Air

Philippine budget carrier, Zest Air, is reviving plans to mount direct flights to Taipei as it expects passenger volume to grow given the easing of the tension between the Philippines and Taiwan, company founder Alfredo Yao said in an interview.

The plan comes ahead of Zest Air’s intention to tap its partnership with Malaysia’s Air Asia Berhad to fly to Dubai next year, he said.

Yao said Zest Air was hoping to start direct flights to Taipei by November this year. Earlier plans to fly to Taiwan were shelved when members of the Philippine Coast Guard shot and killed a Taiwanese fisherman in overlapping territorial waters on May 9 this year.

Due to the shooting incident, Taipei imposed punitive sanctions against the Philippines. The sanctions were recently lifted after Manila apologized formally to Taipei.

At the height of the tension, Zest Air also had to cancel daily chartered flights from Taipei to Kalibo, which is near tourist hotspot Boracay Island. The chartered service resumed about a month ago, Yao said.

“We will come up with direct flights from Kalibo to Taipei and this will give better revenue,” Yao said, adding that chartered flights would continue to service existing clients.

Yao said the company was keen on expanding outside the region. Its plan to fly to Dubai could be in partnership with Air Asia, which has a minority stake in Zest Air, via the Malaysian carrier’s long-haul arm Air Asia X.
Air Asia’s shares are held through its 40-percent stake in Air Asia Inc. (Philippines), which owns 49 percent of Zest Air.

“We’re focusing on the tourism market,” added Yao, who is also behind juice maker Zest-O and Philippine Business Bank.

He said the airline was looking at other areas outside the Asean, although he did not elaborate.

Zest Air operates 11 aircraft on 10 domestic and 10 international routes, which include China, Vietnam, South Korea, Malaysia and Hong Kong.
It has hubs in Manila, Kalibo and Cebu, which are major tourist destinations.

The airline believes that once tensions begin to subside, the passenger volume will continue to grow again. According to Yao, Zest Air plans to begin direct flights to Taipei by this coming November.

Zest Air previously had intentions to operate direct flights to Taiwan but was forced to postpone plans after an international dispute erupted between the Philippines and Taiwan over the shooting of a Taiwanese fisherman by the Philippine Coast Guard last May. The punitive sanctions that were imposed by the Taiwanese government forced Zest Air not only to postpone their plans but resulted in the cancellation of several Kalibo charter flights operated by Zest and other carriers.

The sanctions were lifted recently following an official apology to Taipei by the Philippine government. Zest Air resumed its charter service approximately one month ago. While details on the proposed direct flights were not offered, Yao indicated that Kalibo would be part of the plan. “We will come up with direct flights from Kalibo to Taipei and this will give better revenue,” said Yao. He added that the airline would continue to service its existing charter clients in addition to the direct service.

Meanwhile, Yao revealed that the airline still has intentions to fly directly to Dubai and it plans to tap its new partner, Air Asia, to help get them off the ground. Yao suggested that the airline is keen to expand beyond the region and that the airline may operate the service in partnership with Air Asia through the carrier’s long haul subsidiary, Air Asia X.

Malaysian-based Air Asia group owns a 40% stake in Air Asia Philippines which holds a 49% stake in Yao’s Zest Air. Yao added that the airline is seeking areas outside the Asean region but did not provide specific details. “We’re focusing on the tourism market,” Yao said.