AirAsia confirms Philippine joint venture

17 Dec 2010

AirAsia confirmed its joint venture in the Philippines with a consortium headed by tycoon Antonio Cojuangco, to establish a new low-cost carrier.

As reported earlier (see story here), the Malaysian based airline will take a 40 percent in AirAsia Philippines and Cojuangco's group will hold 60 percent. Operations will probably commence in the third quarter of 2011.

The new budget carrier will operate out of the Diosdado Macapagal International Airport (Clark Airport) in Pampanga, a former US air force base. AirAsia founder and chief executive officer Tony Fernandes, who flew in for the announcement ceremonies, said: “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.

“We want to be the lowest-cost airline in the Philippines."

AirAsia's business model of cheap fares and paying only for services one opts for is expected to provide stiff competition to Philippine Airlines (PAL) and Cebu Pacific, the country's leading aviation players. In recent years, Cebu Pacific, belonging to another Filipino businessman John Gokongwei, has overtaken PAL in passenger loads through its aggressive and creative sales tactics and fast turn around flights.

AirAsia started flying to the country in 2005, operating two daily flights between Kuala Lumpur and Clark, and between Kota Kinabalu and Clark.

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Alisha Haridasani

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