History of Zest Airways

The Establishment of AEC and Asian Spirit Inc.

Figure 1 Asian Spirit Logo

Zest Airways or usually known as ZestAir, had come a long way from the formation of its
roots in September of 1995. Started as Asian Spirit, this was first established by Antonio Turalba,
Emmanuel Oate, Archibald Po, and other professionals who comprised the Airline Employees
Cooperative (AEC), the first local cooperative in the airline industry of the Philippines. It has
been one of the first airlines to break the Philippine Airlines monopoly after President Ramos
has approved the Executive Order which liberalized the airline industry of the country. In 1996,
its operations started having two secondhand Dash 7 aircrafts with two flights between Manila
and Malay everyday. It has then expanded and made new routes to other places for the
maximization of its utilities. Asian Spirit primarily focuses on tourist destinations and least
traveled routes in the country especially to the secondary and tertiary airports where most airline
companies do not operate. It has been the first to have a direct flight to Boracay. In 1997, the
AEC was made into a corporation and changed its name to Asian Spirit Inc. By 2003, it has
become the fourth flag carrier of the country after Philippine Airlines, Cebu Pacific, and Air
Philippines. The Securities and Exchange Commission then approved Asian Spirits registration
in 2005.
Becoming Zest Airways

Figure 2 Zest Airways Airbus A319 at the Bacolod-Silay Airport

The Asian Spirit had been successful in their objective of developing their airline services
to secondary and tertiary routes in the country. However, they suffered financial problems when
bigger airline companies also provided their services in the routes they have developed. Thats
why during the March of 2008, Asian Spirit has been bought for 1 billion pesos by Amy
Holdings (now Mazys Capital Inc.) which is a part of the Yao Group of Companies. Alfredo
Yao, the chairman of the Yao Group of Companies had in mind to merge with the South East
Asian Airlines (SEAIR) and is expected to acquire 60% of the SEAIRs stock but the merger talk
failed. Thus, on September of 2008, the Yao Group of Companies decided to rebrand Asian
Spirit. This has been the birth of Zest Airways. The operations of the company have not been
much successful. For one, their intention of having three new international routings and
expansion didnt happen. There has also been a negative feedback from customers with regards
to their safety and quality services. In fact, ZestAir was given a Suspension of Air Operator
Certificate on August 16, 2013 due to a series of safety breaches.
Agreement with AirAsia Philippines

Figure 3 AirAsia Zest as subsidiary of AirAsia Philippines

On March of 2013, Zest Airways signed an agreement of alliance with AirAsia
Philippines. It involves an exchange of shares AirAsia Philippines, Zest Airways, and AirAsia
Berhad of Malaysia where 40% of the total shares would belong to AirAsia Berhad. Less than a
year after the strategic alliance, the two companies have been rebranded as the AirAsia Zest.
Sources:
http://web.archive.org/web/20071016023622/http://www.philippinebusiness.com.ph/archives/ma
gazine/vol13-2006/13-8/cover_2.htm
http://www.eturbonews.com/937/yao-group-acquire-asian-spirit
http://business.inquirer.net/111789/airasia-zest-sign-dream-alliance
http://business.inquirer.net/138721/zest-air-suspended-due-to-safety-issues

History of AirAsia
Origin in Malaysia
AirAsia was established in Malaysia on the year 1993. It regarded as one of the most
low-cost international airlines in Asia. It started its operation by the year 1996 and after five
years, it was purchased by Tony Fernandes of Tune Air Sendirian Berhad and took up its
RM40million debt. By 2002, AirAsia had already produced a profit and provided new routes
from its hub in Kuala Lumpur for that year. It has, in fact, interrupted the monopoly of Malaysia
Airlines because of its very low promotional fares. In 2003, the company opened another hub in
Senai International Airport in Johor Bahru. It has then launched its first international flight going
to Bangkok during that year. Over the next few years, the airline has also started its international
flights in different parts of Asia such as China, Macau, Vietnam, Indonesia, Cambodia, and
Philippines. It also expanded and had its subsidiaries in Thailand, Indonesia, and the Philippines.
As of today, AirAsia also gives flight services to all ASEAN countries as well as to United
Kingdom, France, and Australia.
Philippine AirAsia
In 2011, an AirAsia hub was setup in the Philippines. A joint venture was made between
AirAsia Berhad and the Filipino investors Antonio Cojuanco, Michael Romero, and Marianne
Hontiveros. AirAsia held 40% of the shares while the Filipino investors owned the 60%. It is due
to the fact that the Philippine Constitution does not allow a foreign business to have a share of
more than 40% in the Philippine-registered businesses. On February 2012, the airline was given
an Air Operator Certificate from the Civil Aviation Authority of the Philippines thus permitting
them to fly in the Philippine air territory.
Zest Airways Alliance
By March 2013, Philippine AirAsia formed an alliance to swap shares with Zest Airways.
Alfredo M. Yao became one of the major stockholders of Philippines AirAsia having 15% of its
stock in exchange for ZestAirs 49% to be held by the Filipino shareholders. ZestAir had then
become a subsidiary of Philippine AirAsia and has rebranded itself as AirAsia Zest. On April
2014, Joy Caneba has been appointed as the new Chief Executive Officer. She has been
instrumental in the strategic alliance of both airlines. Skytrax, a United Kingdom-based
consultancy that makes a review about several airlines and airports around the globe, has
awarded Philippine AirAsia as the Worlds Best Low-Cost Carrier for seven consecutive years
from 2009-2015.
Sources:
http://business.inquirer.net/111789/airasia-zest-sign-dream-alliance
www.airasia.com/common/pdf/JusmStart-Malaysia.pdf
http://www.skytraxresearch.com/