Malaysian low-cost carrier group AirAsia has finalized plans to establish a joint-venture carrier in the Philippines. The formal announcement of the new carrier has been expected for several days.
AirAsia Philippines will reportedly operate from either Clark or the Subic former U.S. military airfield near Manila.
The airline aims to start flying in 2011’s third quarter, subject to regulatory approval, says AirAsia, which will have a 40% stake in the venture.
The other 60% share will be equally held by a group of local businessmen including Antonio Cojuango Jr., who is a cousin of the Philippine president and former head of Air Philippines. Cojuango will be chairman, and the CEO will be Marianne Hontiveros, who is another of the local investors along with Michael Romero.
AirAsia Philippines will follow the AirAsia business model, branding and “will leverage on AirAsia’s strength to forge into markets in China, Korea and Japan from the Philippines”. It will also “tap into existing prime markets such as Singapore, Hong Kong and Taiwan” as well as operate domestically.
AirAsia group CEO, Tony Fernandes, says the joint venture “reflects AirAsia’s confidence in the country and ASEAN”.
He says: “We are proud to extend AirAsia’s successful low-cost business model to the Philippines and make it affordable for the average Filipino to travel domestically and regionally.”
“Greater connectivity across ASEAN will not only boost economic growth by providing better access to markets but also enhance links within travel, trade and tourism,” he adds.
Marianne Hontiveros says the new carrier “will create healthy business competition and make air travel more affordable for Filipinos.”
The Philippines’ domestic market is dominated by Cebu Pacific, Philippine Airlines (PAL) and PAL’s Airphil Express. The incumbents have been lobbying against AirAsia’s impending entry into the market by arguing the newcomer will spark a price war and add too much capacity to the market.
AirAsia is based in Kuala Lumpur but has affiliate carriers in Bangkok and Jakarta and is setting up an affiliate airline in Vietnam.
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