Zest Air plans to refresh, relaunch brand

MANILA, Philippines – Low cost carrier Zest Airways, Inc. has plans to add some zing into the airline’s brand and operations as competition in the industry heats up.

Zest Air, the country’s 4th largest carrier, has been seen as the most vulnerable in an industry with 5 strong and growing industry players.

In a press briefing on Monday, June 11, the officials of the Yao-led airline said they have in the works efforts to “refresh” the airline before its re-launch in the 4th quarter this year.

“By the last quarter of this year, something really different is going to happen. Whatever model we will evolve into is going to be a consumer driven model. We will make it easy for consumers. At the same time, we have got to emulate how the LCC operates in terms of cost. The evolution now is a hybrid model,” said chief marketing and sales officer Alfredo Herrera.
 
The airline is keeping its Zest Air brand. “We will refresh the branding, do a couple of things like maybe change the color but we won’t change the brand name.”

Most vulnerable

Zest, previously known as Asian Spirit, initially adopted the low-cost model in 2008 and started to pursue more aggressive expansion in 2010.

It has a fleet composed of nine A320s, one A319 and 3 turbo prop jets, making it the most vulnerable and the smallest of the local carriers.

It also does not have the economy of scale enjoyed by Cebu Pacific, the two-brand strategy of AirPhil Express and Philippine Airlines, the network support of newest kid on the block AirAsia Philippines, and the recently sealed equity and marketing venture between SeaAir and Tiger Airways.

According to Center for Aviation, “Zest Air’s most valuable assets are its slots in the Manila airport.”

But these, too, are under threat as the Department of Transportation and Communication (DOTC) has recently asked local airlines to reduce and/or reschedule their Manila flights since the Ninoy Aquino International Airport (NAIA) has long been congested.  

New blood

Zest Air was the indirect beneficiary of a recent major airline deal: the acquisition of a a minority and controlling stake by conglomerate San Miguel Corp in legacy carrier, Philippine Airlines (PAL).

Herrera was among the former key executives of AirPhil Expresss, the low cost arm of PAL, who jumped ship to Zest Air amid a reported shake up at PAL. Much of the action and new ideas to perk up Zest Air are from this batch of new airline executives.   

Herrera said they will revise earlier targets set for 2012 as efforts to ramp up international operations are underway. Zest Air made P6 billion in revenues in 2011, when it flew 2.3 million passengers. Of these, 2.1 million are domestic passengers and 200,000 international.  
 
“Originally, we were thinking of about 3.5 million passengers. It’s a stretch target. Three million is achievable, unless new restrictions are implemented. The mix of our passenger traffic last year was 80% for domestic and 20% for international. Our plan is to bring it to 50:50,” said Herrera. He added that they expect international operations to contribute 40% to 50% in 2013, from the current 35%.

Fly international

He added that Zest Air will fly to new destinations out of Manila this year. Target destinations include

• Kuala Lumpur, Malaysia in October
• Shanghai, China on July 25
• Incheon, Korea
• Taipei in Taiwan

 
“For Korea, we have over 27 flights and we will add 4 to 5 more by the 3rd quarter of the year. We have the most number of frequencies in the country regardless of points out of the Philippines,” said Herrera.
 
Zest Air recently launched its first direct flights to Jinjiang and Quanzhou in China from Manila.
 
Zest Air already mounts flights to Incheon and Pusan in Korea, Shanghai and Beijing in China and Taipei, Taiwan from the Kalibo or Cebu International airports.

Entitlements
 
The Zest Air executive share that they may also resume operations to Hong Kong, as well as seek to open a new Singapore route, using an A320.

The Hong Kong route, however, may face challenges. Malaysian carrier AirAsia, Inc. had asked the Civil Aviation Board (CAB) to recall Zest Air’s 1,250-weekly seat entitlements to Hong Kong since these seats were not utilized.

AirAsia currently has 1,036 seat entitlements per week between Clark and Hong Kong, but it wants to mount two daily flights to the former British colony.

But Herrera said Zest Air won’t give up its Hong Kong entitlements. “That right was granted to us so why give it to someone else? We are already working on our Hong Kong schedule.”
 
As for long-haul flights, Zest Air shared it also ahs plans to launch a direct flight to the Middle East and Australia in the future. It had earlier asked the CAB to allot it 1,546 weekly seat entitlements.– Rappler.com

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