October 3, 2011
Haikou - China's Fourth largest airline company is buying all the minority share of Philippine low cost carrier Zest Airways.
Zest Air parent AMY Holdings together with other local investors would continue to retain 60% share of the airline company while Hainan Airlines (HU) through Grand China Holdings (HNA Group) will take 40% share in accord with Philippine Laws.
Alfredo Yao, Chairman of AMY Holdings, said its foreign partner has already started conducting due diligence of Zest Airways which take some time to finish before the actual sale but it signed a Memorandum of Understanding with officials of the HNA Group based on initial audit results of the Philippine-based carrier.
Hainan Airlines parent, Grand China Airlines Holding Company (GCAHC) owns Shanxi Airlines, Chang'an Airlines, and China Xinhua Airlines, and investments in other airlines to include Beijing Capital Airlines (70%), Lucky Air (67.95%), Tianjin Airlines (20%), Yangtze River Express (51%), Hong Kong Airlines (45%) and Hong Kong Express Airways (45%). Its investment in Zest Airways (40%) would be its 10th acquisition and affiliate airline.
The Hainan Group's entry into Zest Air’s would paved the way for the airline to finance its aggressive expansion strategy in the Philippines for domestic and international operations as it takes nine Airbus 320 delivery in 2012.
Zest Air has a fleet of six Airbus 320 planes and four Modern Ark 60s. The company would have 19 by next year, as it plans to mount more flights to China like more flights for its hub in Kalibo to different provinces in China.
The carrier aims to fly Manila-Singapore route soon as well as mount flights to Taipei, Palau, Bahrain and Dammam. Zest Air currently flies to Incheon and Pusan in South Korea from Kalibo and Cebu and some Chinese province capital.
Hainan Airlines reported a first-half net profit of $104.7 million, up 20.2% compared its posted income a year ago.