Cebu Air confirms offer to look at Zest Airways

Business Mirror
October 4, 2012
By Lenie Lectura

CEBU AIR Inc. said on Tuesday it was offered to take a look at possibly acquiring Zest Airways Inc.

“Cebu Pacific has been approached to indicate its interest in this opportunity. However, any interest which the company may have at this point is at best indicative and non-binding. The company is presently not [conducting] any due diligence on Zest Air,” said the airline in a disclosure to the stock exchange.

Zest Air chairman Ambassador Donald Dee earlier said there are local and foreign carriers interested to invest in Zest Air but nothing has been finalized.

Aside from Cebu Pacific, other airlines are reportedly taking a look at possibly investing into Zest Air are AirAsia Bhd. and Philippine Airlines.

But AirAsia president Maan Hontiveros said, in a chance interview at the Civil Aeronautics Board’s 65th anniversary yesterday, that AirAsia has “nothing to say” [on any possible Zest Air buy-in].

“I haven’t gotten such report. We haven’t done anything. We have nothing to say. I have no comment about the issue. It’s better to ask Zest Air,” she said.

For his part, Cebu Pacific (CEB) president Lance Gokongwei said the Gokongwei-controlled airline will “consider any opportunity” but stressed the airline is not involved in any current discussions.

“We would look at any opportunity if it makes sense with the company and our shareholders. We are not in current discussions with Zest Air,” said Gokongwei.

When he was informed about the statement of Cebu Pacific posted at the stock exchange yesterday Gokongwei said, “This reflects the corporate position of the airline.”

When asked if consolidation in the aviation industry was inevitable amid rising fuel jet prices, Gokongwei took time to explain the situation being faced by the airlines.

“The airline industry is growing very quickly. At the same time, it is very difficult because the price of fuel has gone up tremendously. There’s intense competition given that there are six commercial carriers. But at the end, it’s beneficial to the consumers. That is what it’s all about. The government’s liberalization has created clear benefits to the consumer,” said Gokongwei.

As this developed, CEB said it is set to launch four domestic routes, effectively increasing connectivity within the Philippines.

CEB began thrice weekly Cebu to Coron (Busuanga) services on October 4, providing foreign and local tourists from Cebu and neighboring areas direct access to Coron.

Today, it will launch four times weekly services each from Davao to Butuan and to Dipolog, linking three trade and government centers in Mindanao with approximately hour-long flights.

CEB will also launch thrice weekly flights from Iloilo to Tacloban, kicking off the first of five routes the airline will launch from Iloilo in the second half of 2012. These new routes will utilize CEB’s ATR 72-500 airplanes.

“We are very pleased to expand our Philippine network, especially since these direct flights will boost travel, tourism and trade in different regions of the country. With its trademark low fares and seat sales, Cebu Pacific will continue to enable even more Juans to travel by air to reach their destinations,” said Candice Iyog, vice president for marketing and distribution.