ZestAir to spend $240 million for Airbus lease

MANILA, Philippines - Zest Airways Inc. is spending at least $240 million for the lease of six Airbus 320 aircraft to beef up the airline’s existing fleet that service both domestic and regional destinations.

ZestAir senior vice president for commercial and external affairs group Reynaldo Rodriguez said two of the A320s are expected to arrive this year and the other four would be delivered next year.

“One will arrive by the end of the month or early November, while the second one will come in by the end of November or early December in time for the Christmas Holidays,” Rodriguez said.

By the end of the year, he said ZestAir would have more or less 15 aircraft of which eight are company-owned.

He said that four additional A320s are expected to arrive by the second and third quarter of next year and would serve the airline’s regional routes.

The lease price of each A320 is around $40 million.

Rodriguez said existing shareholders led by Amb. Alfredo Yao would finance the lease of additional aircraft.

On top of the six aircraft, he revealed that the airline is also keen on leasing two wide-bodied A330 to serve long-haul routes particularly in the Middle East.

“We are negotiating for two A330s and we hope to operate that by October of next year,” Rodriguez said.

He said the airline has existing flight entitlements in Bahrain and Kuwait and is negotiating for seat entitlements in the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA).

The Philippine government, through the Department of Transportation and Communications (DOTC) and the Civil Aeronautics Board (CAB), successfully concluded air talks with UAE and Saudi Arabia.

Yao announced last July that the company was pursuing talks with strategic investors including Hainan Air of China for a possible 40 percent stake in ZestAir in preparation for the airline’s plans to go public over the next two years.

 “It is still ongoing and we don’t know what will happen. Hopefully (we complete negotiations) this year. In the airline business you cannot do it by yourself and it is better if you have a partner,” Yao said.

Aside from Hainan Air, flag carrier Philippine Airlines – a joint venture between businessman Lucio Tan and diversified conglomerate San Miguel Corp. – and Cebu Air Inc. (Cebu Pacific) of taipan John Gokongwei have expressed interest in ZestAir.

Zest Air is currently under a five-year refleeting program which aims to add up to three aircraft to its fleet every year. It has an existing fleet of 13 Airbus A320 and nine turbo-propped engine aircraft.