Barefoot Investor: AirAsia Philippines?

MANILA: AirAsia Bhd (5099) has set up AirAsia Philippines with three local parties, in its latest venture overseas.

The low-cost airline, through AirAsia International Ltd, sealed a joint venture agreement to form AirAsia Inc (AirAsia Philippines) in Manila yesterday.

AirAsia will hold a controlling 40 per cent stake, while the other parties will each own 20 per cent of AirAsia Philippines.

The other owners are three prominent locals namely Antonio Ongsiako Cojuangco, Dr Michael L Romero and Marianne B Hontiveros.
Cojuangco and Romero are team owners of the Philippine Patriots, which is part of the Asean Basketball League mooted by AirAsia Bhd co-founder and chief executive officer Datuk Seri Tony Fernandes.

AirAsia will pay US$8 million (US$1 = RM3.14) for its stake in the airline, which will have an authorised share capital of US$25 million.

Hontiveros was also named chief executive of AirAsia Philippines.

"We will not cannibalise the market, we are looking to grow it. Of the 140 routes we fly to, 50 per cent are routes never before flown. You will see the same recipe in the Philippines," Fernandes told reporters in Manila yesterday.

He was speaking after announcing its sponsorship of Philippine Patriots.

The three-year deal will see AirAsia have branding rights of the team. Philippine Patriots are the reigning champions of the Asean Basketball League.

Fernandes said they are in the midst of obtaining the licence to operate an airline from the Philippines government.

AirAsia Philippines will will start out with two new A320s.

It is yet to decide from which airport it will fly out of but Fernandes said it is a toss-up between Subic International Airport and Clark International Airport.

Currently AirAsia flies daily to Clark International Airport and enjoys a load factor of 87 per cent.

On AirAsia's plans to start a joint venture in Vietnam, Fernandes said it is now on the back burner as it focuses on growing its operations in the Philippines.

"Eventually we want to be in every Asean country," Fernandes said. Another Asean country which looks promising is Cambodia, he added.(Business Times)


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