BUDGET carrier AirAsia Inc (Phils) is suspending several local and overseas flights, including those to Kalibo and Davao as well as Hong Kong and Taipei from Clark International Airport, to allow it to divert resources to unit Zest Airways, a report said.
The local unit of Malaysia’s AirAsia Bhd. was “rationalizing routes” after Zest Airways took a “significant” hit in August following a surprise multi-day suspension by the Civil Aviation Authority of the Philippines (CAAP), according to AirAsia Phils CEO Marianne Hontiveros.
A unit of AirAsia Bhd., AirAsia Phils has a 49% stake in Zest Airways.
Hontiveros said the carrier would suspend its Kalibo and Davao flights effective Oct. 9 and the Hong Kong and Taipei services by early November, adding that the international routes would resume in time for the Christmas season.
She said the plans are part of broader efforts by the company to “rationalize” its routes, a euphemism for cutting back or halting flights with “low” passenger loads.
On Aug. 16, Zest was suspended by the CAAP for what the regulator described as failure to comply with air safety regulations.
The watchdog lifted the suspension on Aug. 19, but by then the action had cost the carrier at least P300 million in expenses and forgone revenue, in addition to penalties slapped by authorities in China, local reports said.
“We’re investors in Zest and we need to concentrate resources here until things stabilize,” Hontiveros said, citing the need to stay “cash positive.”
“The financial losses directly out of the (CAAP) grounding were very substantial,” she said.
Clark International Airport Corp. president and chief executive officer Victor Jose Luciano said in a statement Air Asia Philippines’ halting of its local and international flights is only temporary.
“Clark acknowledges the challenges confronting Air Asia Philippines, made more daunting with the acquisition of Zest Air while the latter is in the midst of hurdling regulatory issues,” he said.
“Clark will continue to give full support to its airlines and give all the encouragement to Air Asia to increase flights out of Clark. Clark believes in the capability of the management of Air Asia, not only to overcome its present difficulties but to even grow the airline soon,” Luciano said.