Philippines' AirAsia in strategic alliance with Zest Airways

In the Strategic Alliance Agreement between PAA and Ambassador Alfredo Yao, PAA intends to invest in the Zest Air Group by acquiring 49% of common stock of Zest Airways and 100% of Asiawide Airways, and, in turn, Amb. Yao will subscribe to shares in PAA. The Strategic Alliance Agreement contemplates various regulatory approvals to be obtained prior to completion of the transaction. To further strengthen this partnership, the shareholders of PAA will infuse funds to augment working capital.

Marianne Hontiveros, CEO of PAA, said, "Today's strategic alliance between our two local carriers brings pride and joy to Philippines' AirAsia. I am especially delighted to have Amb. Yao of ZestAir as a partner as he shares a common vision to provide passengers with the best value fare possible which enables them to fly to various destinations."

"This proposed investment in the Zest Group will complement the strategies for future growth of PAA, which currently operates out of Clark. This will allow us to leverage on our respective strengths, which in the case of Zest Air, include its operations out of the Ninoy Aquino International Airport ("NAIA"), which constitutes a majority of the air traffic in the Philippines, and a strong domestic network which feeds into its current international routes. The stockholders of PAA welcome this partnership with Amb. Yao, a seasoned entrepreneur who is well regarded in Philippines," she added.

The investment of PAA in Zest Air also aligns with AirAsia Group's business strategy. The AirAsia Group consists of existing operations in Malaysia, Thailand, Indonesia, Japan, the Philippines and, with India to come, altogether making AirAsia the largest Asian low cost carrier, with a combined fleet of 120 aircraft, plus over 350 more on order, and operating over 158 routes spread across 18 countries, of which 56 are unique. AirAsia sees enormous growth potential in the Philippines, especially with a population of over 100 million people across an archipelago of just over 7,000 islands, a landscape conducive to air transportation.

Ambassador Alfredo Yao commented, "We are truly delighted with this strategic alliance with AirAsia, Inc. It provides a great opportunity to realize both carriers' common vision to widen the choice of low cost travel within the Philippines and the region. The goal in ZestAir is driven by my passion to capitalize on the tourism potential and, hence, our investment to quickly increase our fleet and expand Zest's market share."

PAA Chairman, Antonio "Tony Boy" Cojuangco remarked, "I am truly excited about this alliance as it will take both companies to greater heights. The Philippines aviation market has tremendous upside potential. Bringing these two carriers together will definitely realize this potential."