AirAsia seeks to turn around Philippines operation with new focus on Zest Air and Manila

AirAsia is attempting to turn around its struggling operations in the Philippines by closing its base at Manila alternative airport Clark and focusing on expansion at Manila Ninoy Aquino International Airport using slots held by new partner Zest Air. AirAsia is also seeking approval for Zest to adopt the AirAsia brand, giving the LCC group two carriers in the Philippine market but a single product.

AirAsia has struggled in the Philippine market since it launched Philippines AirAsia in Mar-2012. The new affiliate's base at Clark has been highly unprofitable with limited growth opportunities.

Shifting focus to Manila significantly improves AirAsia Group's outlook in the Philippines. But AirAsia will still need to overcome intense competition from market leader Cebu Pacific, which has a much stronger position at Manila, as well as the Philippine Airlines Group and Tigerair Philippines.