AirSWIFT buyout expands CEB’s premium market reach — analysts

By Ashley Erika O. Jose, Reporter

CEBU PACIFIC’S (CEB) P1.75-billion acquisition of AirSWIFT from ALI Capital Corp., formalized on Monday, is expected to boost its domestic market reach and revenue potential by catering to a premium customer segment, according to analysts.

“This fits Cebu Pacific’s expansion plans as the acquisition will enable the company to gain a bigger share of the promising leisure travel market,” Chinabank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message on Monday.

“Cebu Pacific is now going beyond the budget travel market by adding a boutique airline that caters to a premium customer segment,” he added.

According to both parties, their respective boards of directors approved the share purchase agreement, allowing Cebu Pacific to fully acquire AirSWIFT for P1.75 billion, comprising 9.15 million AirSWIFT shares priced at P13.10 each.

The boutique airline currently offers flights from Manila and Clark to El Nido, Palawan; and from El Nido to other major tourist destinations like Cebu, Boracay, Coron, and Bohol.

“This strategic decision allows both organizations to focus on their respective core businesses, enhancing operational focus and efficiency, and marks an exciting new chapter for both AirSwift and CEB,” Cebu Air, Inc., the listed operator of the budget carrier, told the stock exchange on Monday.

The Gokongwei-led company said no changes will be made in AirSWIFT’s flight schedules and services.

“Our investment in AirSWIFT has been a key enabler in the growth of El Nido as a world-class tourist destination. With this transaction, we are hopeful that the expertise of Cebu Pacific will bring lower cost options and greater accessibility to El Nido,” ALI Capital President Alfonso Javier D. Reyes said in a media release.

Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said that the addition of AirSWIFT to Cebu Pacific’s expanding network will allow the budget airline to access underserved but high-potential tourist destinations.

“Cebu Pacific’s acquisition of AirSWIFT is a strategic move that… expands its reach to popular tourist destinations,” Jayniel Carl S. Manuel, an equity trader at Seedbox Securities, Inc., likewise said in an e-mail.

Cebu Pacific said it is also working to leverage its “operational expertise” to integrate AirSWIFT into its network and offer more cost-effective options to customers.

Once realized, Cebu Pacific will add El Nido to its routes.

“Cebu Pacific continues to undertake measures to boost connectivity to various Philippine destinations while offering low fares, thus contributing to economic growth and tourism development goals,” Cebu Pacific President and Chief Commercial Officer Alexander G. Lao said.

Last week, Cebu Pacific finalized its aircraft order of 152 aircraft worth P1.4 trillion ($24 billion) with Airbus SE, making it the largest aircraft order in Philippine history.

To date, Cebu Pacific offers flights to 35 domestic routes and 26 international destinations.

At the stock exchange on Monday, shares in Cebu Air ended 75 centavos or 2.14% higher at P35.80 apiece; while shares in Ayala Land gained P1.25 or 3.38% to close at P38.25 each.