AirAsia to suspend PH flights

By Lawrence Agcaoili, The Philippine Star

Posted at Sep 13 2013 07:59 AM | Updated as of Sep 13 2013 10:47 PM

MANILA - AirAsia Inc. Philippines, a unit of low cost carrier AirAsia Berhad of Malaysia, is temporarily suspending domestic and international flights from Clark International Airport in Pampanga after its affiliate Zest Airways Inc. suffered heavy losses arising from the suspension of its operations.

AirAsia Inc. Philippines chief executive officer Marianne Hontiveros said in an interview with The STAR that the airline is in the midst of winding up its domestic and international operations.

AirAsia Berhad of Malaysia owns 40 percent of AirAsia Philippines while Filipino investors led by Hontiveros together with Antonio “Tonyboy” Cojuangco Jr., and Michael Romero control 60 percent.

AirAsia Philippines and ZestAir owned by Alfredo Yao’s AMCY Holdings Inc. entered into a strategic alliance agreement last March 11.

Last May 10, AirAsia Philippines completed the acquisition of an 85 percent economic interest and 49 percent voting rights in ZestAir as well as a 100 percent interest in Yao’s Asiawide Airways Inc.

In exchange, ZestAir got $16 million as well as 13 percent interest in AirAsia Philippines that operates two Airbus aircraft.

Hontiveros said in an interview that Clark – Kalibo as well as Clark – Davao flights would end on Oct. 8 while Clark – Taipei and Clark – Hong Kong flights would end on Nov. 6.

She said Clark – Hong Kong flights would resume between Dec. 20 and Dec. 26 in time for the Christmas season.

According to her, the decision to wind down domestic and international flights was reached during the meeting of the Board of Directors last Tuesday.

“The directive to me by the board of AirAsia is to cut further losses in AirAsia Inc. Philippines. The direct losses arising from the suspension of the operations of ZestAir which is very sizeable,” Hontiveros stressed.

Last Aug. 16, the Civil Aviation Authority of the Philippines (CAAP) issued an order grounding the fleet of ZestAir due to six aviation safety concerns in violation of the Philippine Civil Aviation Regulation (PCAR).

Violations include the absence of an accountable manager; failure to check aircraft logs, flight manifest, weather, among others; failure to present in the authority the airman license (aircraft mechanic license) during ramp inspection; series of occurrences that affected flight operations; refueling with passengers onboard; and excessive flight duty time for pilots.

The suspension of the Airline Operators Certificate (AOC) was lifted the CAAP on Aug. 20 after the low cost carrier complied with all safety requirement. It was placed under heightened surveillance last July 31 due to the cancellation of several flights over the past few months.

Hontiveros said ZestAir suffered sizeable losses as the airline paid for the tickets of affected passengers in other airlines that are more expensive as well as hotel accommodations.