If the grounding of Philippine low-cost carrier Zest Air is extended, it will primarily benefit carriers serving Kalibo, one of the two gateways to the resort island of Boracay.
The timing of Zest's grounding was perhaps more surprising than the grounding itself. The Civil Aviation Authority of the Philippines (CAAP) announced that it was suspending the airline's air operator's certificate late in the afternoon on 16 August, essentially making the carrier wait a full weekend before government officials returned to their office today, 19 August.
One media report cites Zest chief information officer Joy Canebo as saying that the issue would "hopefully" be resolved "by Monday [19 August]".
CAAP justified the suspension over alleged safety lapses and other management issues. Zest, in a sharp rebuttal posted on its website, said it was "surprised" by the suspension of its AOC and that its 11 aircraft are airworthy.
"The management of Zest have been in full cooperation with CAAP in ensuring that the maintenance programs and policies of Zest are in place," the company says. "All findings in CAAP's letter have already been appropriately addressed and we believe that they do not merit suspension and grounding of our operations."
According to Flightglobal's Capstats database, Zest comprised just 13% of departure capacity provided by Philippine carriers in July. Its total capacity that month was close to 390,000 seats, compared with Cebu Pacific's 1.3 million seats (44%), Philippine Airlines' (PAL) 620,000 seats (20%), Air Philippines' (PAL Express) 540,000 seats (18%) and Tigerair Philippines' 153,000 seats (5%). Zest's strategic partner, Philippines AirAsia, provided just 1% of capacity in July, with 39,600 seats.
Zest's domestic network
Although Zest is by no means a dominant player in the Philippines, a prolonged suspension will have a significant impact on services to Kalibo, one of the two gateways to the popular holiday destination of Boracay.
FlightMaps Analytics indicates that Zest is the biggest player on the Manila-Kalibo route, providing 32,000 seats in July, or 38% of total capacity. The next biggest player, PAL Express, provided 24,000 seats (29%) and Cebu Pacific provided 21,000 seats (25%).
PAL Express, as the second player on Manila-Kalibo, would be the main beneficiary of a prolonged suspension. It, along with Tigerair Philippines, has promoted the fact that it is providing relief flights for stranded Zest passengers.
In addition, Zest dominates the Seoul Incheon-Kalibo route, which is popular with South Koreans heading to Boracay. FlightMaps shows that it provided 7,222 seats in July on the route, making up 87.3% of capacity. Zest's only rival on the route, PAL, provided just 1,050 seats, or 12.7% of capacity.
Kalibo is a 90min bus ride from Boracay itself. The other airport serving the area, Caticlan, is much better located, but is only capable of handling turboprops. It served by Cebu Pacific and PAL Express.
A notable affected party in the event of an extended Zest suspension is AirAsia Philippines, which has a strategic partnership and cross-shareholding with Zest.
PAA said in March that it would inject funds into Zest to support its working capital and that the two airlines will continue to operate separately. Nonetheless, booking a flight through Zest's website takes users to AirAsia's booking engine.
It remains to be seen what impact the grounding will have on the AirAsia partnership over the longer term.