Posted by Neelam Mathews
March 11, 2013
Philippines' AirAsia, enters into a Strategic Alliance Agreement with Ambassador Alfredo Yao, the majority shareholder of Zest Airways, Inc. and Asiawide Airways, Inc. (collectively, the “Zest Air Group”). In the Alliance Agreement between PAA and Ambassador Alfredo Yao, PAA intends to invest in the Zest Air Group by acquiring 49% of common stock of Zest Airways and 100% of Asiawide Airways, and, in turn, Amb. Yao will subscribe to shares in PAA. The Agreement contemplates various regulatory approvals to be obtained prior to completion of the transaction. To further strengthen this partnership, the shareholders of PAA will infuse funds to augment working capital, says a press statement.
The investment of PAA in Zest Air also aligns with AirAsia Group’s business strategy. The AirAsia Group consists of existing operations in Malaysia, Thailand, Indonesia, Japan, the Philippines and, with India to come, altogether making AirAsia the largest Asian low cost carrier, with a combined fleet of 120 aircraft, plus over 350 more on order, and operating over 158 routes spread across 18 countries. AirAsia sees enormous growth potential in the Philippines, especially with a population of over 100 million people across an archipelago of just over 7,000 islands, a landscape conducive to air transportation, the statement adds.