Cebu Air eyes possibility of buying into Zest Air

Cebu Air Inc. on Thursday indicated it is interested in buying budget airline Zest Airways Inc. of Ambassador Alfredo Yao, but there is no firm commitment yet on the part of the Gokongwei-led airline regarding the matter.

 

ZestAir initiated the possibility of a transaction by approaching the operator of Cebu Pacific for a possible investment, Cebu Air corporate secretary Rosalinda Rivera said in a disclosure to the Philippine Stock Exchange.

 

“However, any interest which the company may have at this point is at best indicative and non-binding,” Rivera said, noting that Cebu Air is not doing any due diligence on ZestAir at this point in time.

 

In an interview with reporters on the sidelines of the Civil Aeronautics Board’s (CAB) 65th anniversary, Cebu Pacific president and CEO Lance Gokongwei said, “We will look out for any other opportunity… If it makes sense to the company and shareholders, why not.”

He described the industry as growing exponentially, but also having a tough time coping with operating costs because of high fuel prices.

 

“There is intense competition given that there are six commercial airlines” operating in the Philippines, he said, noting the situation benefits passengers in terms of cheaper airfare.

 

Last July, ZestAir’s Yao announced his airline was pursuing talks with strategic investors – including Hainan Air of China – for a 40 percent stake in ZestAir ahead of plans to go public over the next two years.

 

 “It is still ongoing we don’t know what will happen… Hopefully… this year. In the airline business you cannot do it by yourself, and it is better if you have a partner,” Yao noted.

 

Philippine Airlines president and chief operating officer Ramon S. Ang declined to issue a statement on the indicative interest of Cebu Air in ZestAir.

 

“No comment,” Ang, who was also at the CAB event, told reporters. — VS, GMA News