AirAsia Part 3: Philippines AirAsia plans 2016 growth as it establishes new secondary hubs

AirAsia's operation in the Philippines is entering a new phase which the group hopes will lead to profitability in 2016 and eventually an initial public offering. Growth is also expected to resume in 2016, ending a phase of consolidation and fleet reductions.

The AirAsia Zest brand will be retired by the end of 2015 in favour of the Philippines AirAsia brand. AirAsia has already completed the transition to a single operating certificate in the Philippines, following a complicated and costly two years of maintaining two separate affiliates.

AirAsia's Philippine operation has been highly unprofitable since it was launched in 2012. Turnaround efforts are banking on cost reductions driven by the transition to a single airline and higher yields that will be generated by a more international focused network. The network will be expanded to include several new routes from secondary hubs, in line with a new AirAsia Group strategy to open new unique point to point routes from secondary hubs throughout Southeast Asia.

This is the third in a Sep-2015 series of reports on the AirAsia Group, following CAPA's LCC Airports Congress in Bangkok.