CHAPTER I Executive Summary

This research focuses on the marketability of Zest Airways, a Philippine based air transport services. Zest Airways, formerly Asian Spirit operates scheduled domestic and international flights connecting Manila and Cebu to other local destinations. It also provides quality services & improvement on their aircrafts and services. Like any other company, Zest Airways has its competitive advantages namely: quality services, well trained employees, online bookings, promotional campaigns and mostly its free food and drinks. Due to the arising tourism trend, many people travel, mostly they prefer by air, due to its convenience and time efficiency. As the market arise so did the competitors, but because Zest Airways is just starting its mark, it is being left behind by the major players like, Philippine Airlines, Cebu Pacific, Air Philippines and other local carriers. We have proposed that additional advertising & marketing strategy would surely make Zest airways level with other airlines of better, surpass them. These strategies will help the company in its market growth. Market penetration strategy aims to increase sales or market share of the present products to the current market, with greater marketing efforts. These efforts include better pricing, better reward programs or extensive sales promotions, increase in employees and better publicity efforts and advertisements. Product Development aims to sell new or modified products to their current market by introducing new and better services like
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convenient flight bookings, timely departure and arrival schedules and travel experience. Market Development aims to sell present products to new markets, like extending their geographical routes, changing their advertising campaigns or images that are suitable for their target markets or using todays trend to get peoples attention. But mostly is the companies Positioning, they have to set an image on the peoples mind on what Zest Airways has to give and has to offer.

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CHAPTER II Current Marketing Situation

A. Industrial Analysis

In 1995, Zest Airways was first established as Asian Spirit by: Antonio "Toti" Turalba, Emmanuel "Noel" Oate and Archibald Po, who contributed $1 million each to start up the Airline Employees Cooperative (AEC). Those three invited their friends who are mostly former Philippine Airlines employees, to run Asian Spirit through a salary-to-equity swap deal. The Po family held the majority of ownership.

It started operations in April 1996 with two second hand Dash 7 aircraft servicing only one scheduled commercial route with two flights per day from Manila to Malay, serving the fledging resort island of Boracay. To maximize its aircraft utilization, it introduced new routes to the present-day towns of San Jose, Virac, Daet and Alcantara, and the cities of Cauayan and Masbate, regarded as secondary and tertiary routes by Air Transportation Office and are not serviced by major airlines. At the time, Asian Spirit has the distinction of being the first scheduled airline to serve Boracay. Other operators served the airport on a charter basis then. It became the Philippines' fourth flag carrier (after Philippine Airlines, Cebu Pacific and Air Philippines) in 2003.

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Asian Spirit was sold to AMY Holdings, a holding company controlled by businessman Alfredo M. Yao, in March 2008. After the success of the takeover, Yao expressed interest in merging Asian Spirit with South East Asian Airlines (SEAIR). The two airlines have been in merger talks and were expected to make a decision soon. Yao was supposed to purchase a sixty percent stake in SEAIR, although the deal fell through because of a stolid response from SEAIR management. The merger talks failed and both airlines are operating independent.

On March 26, 2008, AMY Holdings Corp. established ZEST AIRWAYS, INC. as it sees the opportunity for growth in the airline and aviation industry. The thrust of the management is focused on accelerating profitability by introducing brand new aircraft and innovating marketing strategies.

On September 25, 2008, the Securities and Exchange Commission formally approved the corporate name of Zest Air and the juridical personality of Zest Airways, Inc. was formally established. ZEST AIR will initially operate to 20 local destinations and will launch its regional and Southeast Asian operations beginning June 2009. Also it operates one international destination, but has plans of extending and creating new routes both locally and internationally. Zest Airways competitive advantages are the following: Quality of service, has well -trained employees, has online booking, has effective promotion strategies, has brand new fleets, and unlike other domestic and low-cost airlines, it serves free food and drinks.

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Chief Executive Officer is set by the organization's board of directors or other authority, depending on the organization's legal structure. They can be far-reaching or quite limited and are typically enshrined in a formal delegation of authority, responsible as a communicator, decision maker, leader, manager and executor.

President & Chief Operating Officer the corporate executive responsible for the operations of the firm; reports to a board of directors; may appoint other managers (including a president)

Treasurer one who has charge of funds or revenues, especially the chief financial officer of a government, corporation, or association.

Corporate secretary in all sectors have high level responsibilities including governance structures and mechanisms, corporate conduct within an organisation's regulatory environment, board, shareholder and trustee meetings, compliance with legal, regulatory and listing requirements, the training and induction of non-executives and trustees, contact with regulatory and external bodies, reports and circulars to shareholders/trustees, management of employee benefits such as pensions and employee share schemes, insurance administration and organization, the negotiation of contracts, risk management, property administration and organization and the interpretation of financial accounts.
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Assistant Corporate Secretary Corporate Compliance Officer & Assistant Corporate Secretary is the officer primarily responsible for overseeing and managing compliance issues within an organization. The CCO typically reports to the Chief Executive Officer or Chief Operations Officer.

Chief Financial Officer is

a corporate officer primarily responsible for

managing

the financial risks of the corporation. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher manage men

Officer in Charge - Commercial Group is the non-technical business disciplines within a company or organization, particularly the administration of revenue and expenses to generate a financial return.

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B. Porters Framework

NEW ENTRANT Zest Air

SUPPLIERS Xian Aircraft Industrial Corporation Airbus

COMPETITIORS Philippine Airlines Cebu Pacific Air Philippines South East Asian Air

TARGET Tourist Travellers Vacationers Businessmen

ALTERNATIVE COMPETITIORS Ship transport Personal Transport Buses Trains xcxx

Figure 1

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Porters Framework Analysis

The Number of Airline Companies around Metro Manila keeps on promoting due to the increasing number of Tourist. As shown in the Figure ZestAirs competitors are Philippine Airline, Cebu Pacific, Airphil and SEAIR. Philippine Airlines is the national airline of the Philippines and Asias first airline. It is headquartered in the Philippine National Bank Financial Center in Pasay City and was founded in 1941 and is the oldest commercial airline in Asia operating under its original name. Its hubs are at Ninoy Aquino International Airport of Manila and Mactan-Cebu International Airport of Cebu City. Cebu Pacific Air, is based on the grounds of Ninoy Aquino International Airport in Pasay City, Metro Manila, the Philippines. It offers scheduled flights to both domestic and international destinations. Cebu Pacific Air is currently the countrys leading domestic carrier, serving the most domestic destinations with the largest number flights and routes, and equipped with the youngest fleet. Its main base is Ninoy Aquino International Airport, Manila. Cebu Pacific is Asias third largest cost airline based in Pasay City, Philippines. Air Philippines Corporation is a low-cost airline based in Pasay City, Philippines. It operates extensive domestic scheduled services from Manila and Cebu. Air Philippines is operating all PAL Express flights on behalf of their parent company, Philippine Airlines.South East Asian Airlines is an airline based in Pampanga, the Philippines. It operates domestic services and its main bases is Ninoy Aquino International Airport, Manila, with hubs at Godofredo P. Ramos Airport, Malay, Aklan, Puerto Princesa Airport and Zamboanga

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International Airport. Despite its name, its focus is to serve remote destinations throughout the Philippines The Suppliers of ZestAir are Xian Aircraft Industrial Corporation also known as Xian Aircraft Company Limited (XAC) is a Chinese aircraft manufacturer and developer of large and medium-sized airplanes. It is based Yanliang District, Xian, Shaanxi Province. It is joint partners with 603rd Aircraft Design Institute of military aircraft. XAC was established in 1958 and has more than 20,000 employees and Airbus is an aircraft manufacturing subsidiary of EADS, a European aerospace company. Based in Blagnac, France, near Toulouse, and with significant activity across Europe, the company produces around half of the worlds jet airlines. The primary target markets of ZestAir are Tourist, vacationers, travellers and tourist are the common customers of every airline company. They tend to go too far places locally and internationally.Tourist are people that make a tour for pleasure or culture, in beautiful spots in a certain country but dont have intentions to stay long. Travellers refer to a person who travels, especially to distant lands. Vacationers people who are devoted to pleasure, rest or relaxation, enjoying, which usually go to different places during holidays or days off . Businessmen tend to travel due to business trip and meeting. The Alternative Competitors of ZestAir are Ship transport effective for short trips and pleasure cruises. Transport by water is cheaper than transport by air. Personal Transport can choose where to go and can stop anywhere they want. It is not advisable to long distance travel because of the fuel cost and it can be very tiring.Buses are design to carry a large capacity of
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passengers by land. It its the cheapest way of transportation by land. Trains are good substitute for air and water transportation because they also travel between many cities and/or regions of a country, but it has only limited stations.

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C. Key Success Factors

Organizational Chart Alfredo M. Yao President and CEO

Mr. Mark T. Sena Financial Controller

Mr.Alfredo Herrera Chief Marketing and Sales Manager Mr. Deo Jovellino Marketing Manager

Ms. Lourdes M. Tan Purchasing Manager

Mr. Vic Ocfena Operations Officer

Mr. Leviric Ng VP for Marketing

Ms. Jasmin Santos Logistics Manager

Ms. Manilyn Roque Human Resorce

Mr. Dody Ramirez Senior VP for Cargo and Logistics

Mr. Christopher Glenn Espiritu Maintenance Manager

Figure 2

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D. Major Players in the Industry

Philippine Airlines is the national airline of the Philippines and Asias first airline. It is headquartered in the Philippine National Bank Financial Center in Pasay City and was founded in 1941 and is the oldest commercial airline in Asia operating under its original name. Its hubs are at Ninoy Aquino International Airport of Manila and Mactan-Cebu International Airport of Cebu City.

Cebu Pacific Air is based on the grounds of Ninoy Aquino International Airportin Pasay City, Metro Manila, the Philippines. It offers scheduled flights to both domestic and international destinations. Cebu Pacific Air is currently the countrys leading domestic carrier, serving the most domestic destinations with the largest number flights and routes, and equipped with the

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youngest fleet. Its main base is Ninoy Aquino International Airport, Manila. Cebu Pacific is Asias third largest cost airline based in Pasay City, Philippines.

Air Philippines Corporation is a low-cost airline based in Pasay City, Philippines. It operates extensive domestic scheduled services from Manila and Cebu. Air Philippines is operating all PAL Express flights on behalf of their parent company, Philippine Airlines.

South East Asian Airlines is an airline based in Pampanga, the Philippines. It operates domestic services and its main bases is Ninoy Aquino International Airport, Manila, with hubs at Godofredo P. Ramos Airport, Malay, Aklan, Puerto Princesa Airport and Zamboanga International Airport. Despite its name, its focus is to serve remote destinations throughout the Philippines.

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Substitutes: 1. Ship transport is effective for short trips and pleasure cruises. Transport by water is cheaper than transport by air.

2. Personal Transport can choose where to go and can stop anywhere they want. It is not advisable to long distance travel because of the fuel cost and it can be very tiring.

3. Buses are design to carry a large capacity of passengers by land. It its the cheapest way of transportation by land.

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4. Trains are good substitute for air and water transportation because they also travel between many cities and/or regions of a country, but it has only limited stations.

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E. Competitive Matrix Profile Qualities Qualities Advertising Service Quality .20 Price Competitiveness Financial Position .15 .15 4 .60 3 .45 4 .60 3 .45 W .15 1 2 2 T 4 .30 .40 2 3 3 T .45 .60

Customers Loyalty Market Share Global Expansion Total

.15

.30

.30

.10 .10

4 2

.40 .20

2 2

.20 .20

1.0

2.8

2.65

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Advertising Service Quality Price

.15 .20

2 3 4

.30 .60 .60

2 2 2

.30 .40 .30

2 2 2

.30 .40 .30

Competitiveness .15 Financial Position .15 2 .30 2 .30 2 .30

Customers Loyalty Market Share Global Expansion Total

.15

.30

.30

.30

.10 .10

2 2

.20 .20

2 2

.20 .20

2 2

.20 .20

1.0

2.50

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Legend 1 2 3 4 5 Cebi Pacific Air Philippine Airline Zest Air Air Philippines Corporation South East Asian Airlines

Ratings 4.0 3.0 2.0 1.0 Exellent Above average Average Poor

CPM Analysis: Cebu Pacific having an average of 2.8 has the highest ranking among the 5 competitors. Its competitive advantage is their low fare, as it continues to offer low fares and still continues to offer promos and offer discounts on flights whether domestic and international. Its major weakness is Customer Service Quality because based upon the research that we conducted, Cebu Pacific fails to satisfy their passengers. The 2nd is Philippine Airlines having an average of 2.65 and has the highest advertising rate. The 3rd is Zest Air having an average of 2.50 and is known for its low and affordable fares. The 4th and 5th are Air Philippines Corporation and South East Asian Airlines having an average of 2.

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F. Vision, Mission and Quality Statement

Mission Zest Air is a domestic passenger airline with the mission to operate scheduled services to tourist destinations and secondary and tertiary airports where other airlines dont dare to operate.

Vision Zest Air, the airline with vision to be Asias refreshing airline.

Quality Statement Zest Airways Inc. (formerly Asian Spirit) is an airline based in Pasay City, Manila in the Philippines. It operates scheduled domestic and international tourist services, mainly feeder services linking Manila and Cebu with 24 domestic destinations in support of the trunk route operations of other airlines. Its main base is Ninoy Aquino International Airport, Manila, and with a hub at Mactan-Cebu International Airport. Also these hubs outside Manila still have to be made operative as of July 2009. The airline was originally founded as Asian Spirit, the first airline in the Philippines to be run as a cooperative.

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CHAPTER III Macro Environmental Forces Politico-legal We are well aware at the fact that the airline and transport system is a big industry for the Philippines. But there are many issues in the airline industry regarding the government policies and regulations. Competition is present in the domestic air transport industry resulting to lower airfare, improvement in the quality of service, and efficiency in the industry in general. However, there is yet to be done in the countrys international air transport industry. The government is responsible for keeping the industry in order. There are many departments and offices that focus on the aviation system. The reigning government has extended that they had improved the system here in the country. The government has capitalized on project improvement, expansion and rehabilitation of the airline industry. It covers the upgrading and modernization of air navigation facilities through the replacement of old equipment and installation of new facilities. With new law in place, you can always fly safely and expect the tourism industry to boom, and more investments will come pouring in which will translate into more new jobs for people.

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Socio-cultural The Philippines population is estimated 103,775,002 and with that, many people tend to travel. The culture of the Philippines reflects on the complexity of the country. Many people tend to travel nowadays not only that they can be a target market but they can be also helpful to us. Philippines domestic tourism has been growing. According to the government projections, the country will witness around 3-3.1 million overseas tourists and 8-8.5 million domestic tourists in 2012, totaling to a nearly 11 million tourist arrivals. The Filipinos are always positive, and due to the nture of being happy, despite the global crisis, they will still have time to relax and travel. Due to the personality of the Filipino people, travelling will always be present, maybe they have different reasons for travelling but still if there are Filipinos, there is air industry.

Technological In our high tech and fast changing life, technology is very advanced. There are different companies that develop extensive range solutions to improve the passengers journey, streamline and integrate airline and airport operations, track baggage and cargo, and ensure that the highest levels of maintenance and aircraft safety and security are effectively communicated. Their objective is simple to assist their customers in delivering the highest quality to the passengers. As airports were flooded by more and more passengers, it became more and more obvious that the only the technology of the

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integrated information systems can be the way leading to the future. Nowadays, airports are at the very early stages of leveraging the power of the Web. The first initiative airports can take is to improve their websites. Three pieces of information more travelers require are the local weather, the local time, and the exchange rate. Few airport websites through online communities like Facebook, Friendster, MySpace, and Twitter. Customers can easily communicate with the company through those websites and they can share the comments and feedbacks with the Whole Wide Web. The company can also post their promotions, pictures, and news about them.

Natural Environment In terms of environmental issues, the airlines are doing everything they can do to conserve fuel. Throughout the history of commercial aviation, airlines have insisted upon the most fuel-efficient aircraft possible and have worked with airframe and engine manufacturers to reduce fuel consumption. There are also problems when it comes to pollution. A major one is the noise pollution by major airports. People that live near the airports constantly hear airplanes departing and arriving. This has been linked to heart disease, breathing difficulties and cancer along with other health issues. The airplanes emission is composed of about 70% CO2. CO2 contributes greatly to the greenhouse effect which is the cause for global warming. There are a few possible externalities along with this industry.

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FUEL PRICES The fuel prices are becoming outrageous with no sight of slowing down which is highly going to affect airlines. Increased rates for tickets due to the cost of this is really hurting this industry. The most probable factor that cannot be controlled is the weather. Weather also plays a very important role in the industry. Weather is variable and unpredictable. Extreme heat, cold, fog, and snow can shut down airports and cancel flights, which costs airline money. The location or demographics is very important. It is not just civilization and advancement that we want, but also the conservation of the beauty of nature. With increasing number of airports, the more deforestation will happen.

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CHAPTER IV Opportunities and Issues Analysis

A. Market Research Zest Air believes strongly in making sure that passengers will experience a convenient and safe flight in a very reasonable and affordable price. Zest Air operates in most of the main airport terminals all over the country so every passenger whos ready to travel can avail their services. Their efficient operation services team ensures to provide their clients the best standard of service, rain or shine.

Because of the strong demand for travel and high-tech generation, there are a lot of strong and rising competitors that Zest Air is competing with all throughout the country domestically. Zest Airs Research and Development team constantly strives to compete along with others by looking for new ways of improving their class of service and providing a cheapcost flight for their valued passengers.

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B. SWOT Analysis Strengths A major strength of Zest Air is the product itself air travel. Despite downturns, over time air travel continues to grow, not only due to population growth, but also due to an increased propensity to fly. Strength is the safety record, and the associated public acceptance of air travel as both a fast and safe way to travel. Both traditional, brand recognized airlines and new low cost carriers share this strength. Airline staff is highly trained and experienced, from pilots and flight attendants to mechanics and ground staff. Businesswise, airlines have the ability to segment the market, even on the same routes. This allows airlines to establish different levels of service and make associated pricing decisions.

Weaknesses Every airline has a high "spoilage" rate compared to most other industries. Once a flight leaves the gate, an empty seat is lost and non-revenue producing. Aircraft is expensive and requires huge capital outlays. The return on investment can be different than planned.

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Large workforces spread over large geographic areas, including international points, require continual communication and monitoring. This can be exacerbated during operational irregularities, such as bad weather. While the business climate can change quickly, airlines have difficulty making quick schedule and aircraft changes due to leases, staffing commitments and other factors.

Opportunities Airline market growth offers continual expansion opportunities for both leisure and business destinations. This is particularly true for international destinations. Technology advances can result in cost savings, from more fuel efficient aircraft to more automated processes on the ground. Technology can also result in increased revenue due to customer-friendly service enhancements like inflight Internet access and other value added products for which a customer will pay extra. Link-ups with other carriers can greatly increase passenger volumes. By coordinating schedules, airlines can offer service to destinations via a code share agreement with a partner carrier.

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Threats A global economic downturn negatively affects leisure, optional travel, as well as business travel. The price of fuel is now the greatest cost for many airlines. An upward spike can destabilize the business model. A plague or terrorist attack anywhere in the world can negatively affect air travel. Government intervention can result in new costly rules or unexpected new international competition.

STRENGTHS Air travel Safety record Highly trained staffs Affordable Price OPPORTUNITIES Continual expansion Technology advances can result in cost savings Link-ups with other carriers can greatly increase passenger volumes

WEAKNESSES High Spoilage Requires huge capital outlays Large workforces spread over large geographic areas Business climate change THREATS A global economic downturn The price of fuel is now the greatest cost A plague or terrorist attack Government intervention

Figure 4

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C. TOWS Analysis

Strength ability to segment the market Strong management team safety record, and the associated public acceptance of air travel product itself

Weaknesses Inefficiency of the domestic airlines Lack of basic facilities at the airport. Large workforces Climate change

Opportunities

Strength/Opportunities

Weaknesses/Opportunities

offers continual expansion Technology advances Link-ups with other carriers Expansion

SO1 airlines have the ability to segment the market, even on the same routes. This allows airlines to establish different levels of service and make associated pricing decisions so the Airline market growth offers continual expansion opportunities for both leisure and business destinations. This is particularly true for international destinations.

WO1 there are number of instances of flight being cancelled or delayed. Secondly frequent strikes by the pilots and maintenance problems are a major cause of concern. This is one of the reasons that make a tourist disheartened. So Airline market growth offers continual expansion opportunities for both leisure and business destinations. This is particularly true for SO2 The staff is highly international destinations. trained and experienced, from pilots and flight attendants to WO2 When international
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mechanics and ground staff.So Technology advances can result in cost savings, from more fuel efficient aircraft to more automated processes on the ground. Technology can also result in increased revenue due to customerfriendly service enhancements like inflight Internet access and other value added products for which a customer will pay extra. SO3 As both a fast and safe way to travel. Both traditional, brand recognized airlines and new low cost carriers share this strength. So They can greatly increase passenger volumes. By coordinating schedules, airlines can offer service to destinations via a code share agreement with a partner carrier.

airports offer such services like free transportation facilities, private lounge facilities at airports, food etc, it sometimes become impossible to find a clear toilet in our international airports.So Technology advances can result in cost savings, from more fuel efficient aircraft to more automated processes on the ground. Technology can also result in increased revenue due to customer-friendly service enhancements like inflight Internet access and other value added products for which a customer will pay extra. WO3 spread over large geographic areas, including international points, require continual communication and monitoring. This can be exacerbated during operational irregularities, such as bad weather. So As the tourism industry expands the airline industry is also in for a boom.

SO4 Airline is the product itself--air travel. Despite downturns, over time air travel continues to grow, not only due to population growth, but also due to an increase propensity to fly. So As the tourism industry expands the WO4 airlines have difficulty airline industry is also in for a making quick schedule and boom. aircraft changes to leases, staffing commitments and other factors so As the tourism industry expands the airline industry is also in for a boom.
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Threats Oil price Terrorism Economic slowdown Too many competitors

Strength/Threats ST1 airlines have the ability to segment the market, even on the same routes. This allows airlines to establish different levels of service and make associated pricing decisions. So The price of fuel is now the greatest cost for many airlines. An upward spike can destabilize the businessmodel.

Weaknesses/Threats

WT1 there are number of instances of flight being cancelled or delayed. Secondly frequent strikes by the pilots and maintenance problems are a major cause of concern. This is one of the reasons that make a tourist disheartened. So The price of fuel is now the greatest cost for many airlines. An upward spike can ST2 The staff is highly destabilize the business trained and experienced, from model. pilots and flight attendants to mechanics and ground staff. WT2 When international So A plague or terrorist attack airports offer such services anywhere in the world can like free transportation negatively affect air travel. facilities, private lounge facilities at airports, food etc, ST3 As both a fast and safe it sometimes become way to travel. Both impossible to find a clear traditional, brand recognized toilet in our international airlines and new low cost airports.So a plague or carriers share this strength. So terrorist attack anywhere in A global economic downturn the world can negatively negatively affects leisure, affect air travel. optional travel, as well as business travel. WT3 spread over large geographic areas, including ST4 Airline is the product international points, require itself--air travel. Despite continual communication and downturns, over time air monitoring. This can be travel continues to grow, not exacerbated during only due to population operational irregularities, such growth, but also due to an as bad weather. So A global increase propensity to fly. So economic downturn too many competitors would negatively affects leisure,
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greatly affect the number of sales of the company.

optional travel, as well as business travel. WT4 airlines have difficulty making quick schedule and aircraft changes to leases, staffing commitments and other factors.So Too many competitors would greatly affect the number of sales of the company.

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D. BCG Matrix

STAR

QUESTION MARKS

Philippine Airlines (PAL)

Air Asia Philippines

Cebu Pacific

Figure 5.1

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CASH COWS

DOGS

Southeast Asian Airlines (SEAIR)

Southeast Asian Airlines (SEAIR) Spirit of Manila Airlines

Airphil Express

Figure 5.2

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Analysis:

For the first quadrant the stars, these products are newly introduced in the market that can be salable in time. Philippine Airlines and Cebu Pacific belongs to the first quadrant. The next quadrant is the cows which are considered as the milking of the cow of the company. It is salable everyday and very famous in the market. Southeast Asian Airlines (SEAIR) and Airphil Express fall on the 2nd quadrant. The third one is the dogs; under this are the products that have a high price and the consumers cannot afford to buy it. Under this area is the Spirit of Manila Airlines. The last quadrant is called as question marks because these products are not salable in the market and in time it can be no longer seen in the market. The Air Asia Philippines.

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E. Winners Analysis

Advertising is the most important factor in airline industries because customers need to be conscious of those airline companies to be able to know about their different services, destinations, promos, and fares.

Philippine Airlines has the highest advertising rate because of numerous commercials, and although they dont have commercials now, they are still well-established and majority of the people know about PAL even though they have issue about their employees. Zest Airways doesnt have TV commercials but they have page on different networking site such as facebook and twitter where they have numerous print ads.

Philippine Airlines has the most destinations having 31 international and 30 domestic destinations. Cebu Pacific flies to 15 international cities and 27 domestic destinations. Zest Airways has only one international destination (Incheon, Korea) and 20 domestic destinations.

Zest Airways has the cheapest fares among the three based on the fare comparisons we made through our internet research. Philippine Airlines has 41 aircrafts, Cebu Pacific has 29 aircrafts and Zest Air has only 6 aircrafts.

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To date, gathering fares information for analytical purposes has been difficult and hazardous, demanding considerable resources to check newspapers, queries or even searching the Internet manually. Not anymore.

Zest Air is pleased to introduce Fare Analytics, a custom service where you tell us which routes you would like to monitor and we collect and compile the data for you. To analyze seasonality, we offer daily time series formats down to individual flight numbers and provide an average fare based on observations made at various stages before departure. Request a personal demonstration of Zest air and observe: Schedules and fares in a single view Fares with or without taxes and charges Comparisons between carriers, class and route Seasonality and its effect on pricing.

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Top 10 Passenger Airlines in the Philippines According to the Total Seating Capacity of All Aircraft (2008) 1. Philippine Airlines 8, 538 2. Cebu Pacific 3, 148 3. Air Philippines 1, 286 4. Spirit of Manila 778 5. Tair Airways 729 6. PAL Exspress 606 7. Zest Airlines 424 8. Pacific Pearl Airways 228 9. Southeast Asian Airlines -227 10. Inter-Island Airlines 115

Zest Air in the GDS has revealed its plan to restarts international service from Kalibo, outskirt of the renowned resort of Boracay. From 27APR12, it'll offer 2 weekly Kalibo - Hong Kong service, followed by 4 weekly Kalibo - Seoul Incheon flights from 05MAY12. PR previously operated Kalibo - Taipei service.

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Filipino carrier Zest Air has outlined planned operation changes for Winter 2012 season, effective 28OCT12. The new season sees expansion on 5 existing routes domestically, and launching new international service.

Domestic increases in effect from 28OCT12 Manila Cebu Increases from 23 to 30 weekly Z2388 MNL1720 1830CEB 320 D Z2389 CEB1910 2020MNL 320 D Manila Davao Increases from 14 to 19 weekly Z2394 MNL1130 1315DVO 320 x47 Z2395 DVO1355 1540MNL 320 x47 Manila Iloilo Increases from 2 to 3 daily Z2314 MNL1105 1210ILO 320 D Z2315 ILO1240 1345MNL 320 D Manila Puero Princesa Increases from 25 to 28 weekly (from 16OCT12) Z2424 MNL1910 2025PPS 320 D Z2425 PPS2055 2210MNL 320 D Z2424/425 until 15OCT12 operates Day x246

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Manila Tacloban Increases from 14 to 19 weekly Z2324 MNL1620 1735TAC 320 x47 Z2325 TAC1815 1930MNL 320 x47 Following routes operates until 27OCT12, per schedule listing: Manila Busuanga 11 weekly Manila Marinduque 1 Daily Manila Masbate 1 Daily Manila Tablas 3 weekly Manila Kuala Lumpur New 4 weekly service starting 22OCT12 Z2948 MNL1425 1805KUL 320 x357 Z2949 KUL1850 2230MNL 320 x357

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F. PEST Analysis

Political The Philippine government greatly affects the operation of Zest Air company this

includes ecological or environmental issues, international legislation, government policies and conflicts of nations. Ecological issues pertains to the weather of the flight and as well as the climate of the place. Most airlines have difficulties in operating the flight schedules when experiencing bad weather. International legislations also affect the operation of the company because of some guidelines of different international organization. Government policies lead to conflict of different nations. Each country or airline has its own rules in operating their company. Zest Air is currently negotiating different transactions to increase their number of flights in other countries.

Economic The main concern in in identifying economic environment is to evaluate the opportunities for marketing the services offered by Zest Air. Home economy trends affect the economic status of the company. The trends in the air industry shows how Zest Air is updated and innovated in their services offered. New trends will increase the number of

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sale in the company. Seasonality or weather issues also affect the economic environment because in tourism industry it generates profit and revenue when in at their peak season.

Socio Cultural This broadly affects the company by creating the brand and company image to the public. Brand and company image is important because this will show the integrity and credibility of Zest Air. Showing good image and offering the best flight experience to their passengers will give an increase to the sales of the company.

Technology This is one the main asset of Zest Air. Their update and newly commercialize technology utilizes the operation of their company. It gives the best flight experience to their passengers. Though they are categorized as a Low-Cost Carrier, Zest Air can still manage to follow trends. It shows how the company is efficient on innovating their services.

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CHAPTER V Marketing Objectives

Increase sales/profits

Zest Air aims to Increase sales/profits with minimal or no investment by offering unlimited zest-o to the passenger with no additional cost and having an online booking for easy and convenient reservations/booking or inquiries regarding of their flight. There are also some sites like facebook where you can do comments/feedbacks about your personal experience or problem with them.

Increasing number of passengers

Zest Air will be the fourth commercial airline to enter the Iloilo Airport starting March 16, 2009. The airline will be servicing the Manila to Iloilo route daily and will deploy an Airbus A320 plane. You can already make your bookings through their ticketing office in the Iloilo Airport or online through their website. As of the time of writing, Iloilo to Manila and Manila to Iloilo flights cost as low as P488 according to their online booking service. Another sweet attraction of Zest Air is their all-you-can-drink Zest-O products. Zest Air will truly benefit the increasing number of passengers using the Iloilo Airport since they will have more options to travel. Book cheap airfares during Zest Air Promo dates.

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To raise their market share by 4.5% in 2012 To boost their profit to compensate their loss last year To increase their net operating income by 20% in 2012

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CHAPTER VI Target Market Profile

Travellers

Vacationers

Tourists

Zest Air

Businessmen

Demographics According to the government projections, the country will witness around 3-3.1 Million overseas tourists and 8-8.5 Million domestic tourists in 2009, totaling to nearly 11 Million tourist arrivals. This will represent an increase of 9% from the 2008s figu re. Despite the global crisis, the number of foreigners who arrived in the country increased by four percent in August compared to the same month last year, according to statistics released by the Department of Tourism and the Bureau of Immigration. Statistics showed that some 1.32 million foreigners arrived last month, up by 18,141 over the August 2008 arrivals. From January to August, 3.95 million foreigners arrived, compared to the 3.943 million for the same period last year, according to a press statement of the Bureau of Immigration. Delays Airports have become more congested due to more flights and flight departure delays have become the norm. In the Philippines, travelers endure an undeniable increase in congestion, departure delays, and discomfort due to

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the enormous response of passengers to the availability of options with regard to fares, flight schedules, and aircraft technology. And also, the congestion at airports is exacerbated by the lack of adequate infrastructure to support the increase in the number of departures after 1994. INCOME in RELATION to PRICE Fare should respond positively with income since airlines tend to inflate prices in more affluent markets where passengers are less price-sensitive, while fare should decrease with distance because airlines are able to distribute their fixed costs over a longer distance. A percent increase in per capita income results in a 0.86 percent increase in airfare, which tends to indicate that airfares are higher in markets with a higher per capita.

Psychographics Zest Air is a domestic passenger airline with the mission to operate scheduled services to tourist destinations and secondary and tertiary airports where other airlines dont dare to operate. It operates scheduled domestic and international tourist services, mainly feeder services linking Manila and Cebu with 24 domestic destinations in support of the trunk route operations of other airlines. The Zest Air is planning to enlarge their routes of destinations all over the Asians country. Safety and Convenient, as the passengers wish for when they are travelling. Crashes and error of personnel in the airlines has led to passengers to be more anxious in travelling. They will spread the wings of Zest Air very soon and Zest air is gearing up to be a better airline. Exciting things they will be announced hoping to boost its profile with the entry of new officials.

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Zest Air Zest Air is also set to launch its direct flight to Shanghai on June 22 using an Airbus A320. More direct international flights from Manila are scheduled this year-Kuala Lumpur, Malaysia; Shanghai, China; and Seoul, Korea. It will also resume its flights to Hong Kong and will open a new Singapore route. Zest Air currently has flights to Seoul and Busan in South Korea, Shanghai and Beijing in China and Taipei, Taiwan from the Kalibo or Cebu international airports. At the time, Asian Spirit has the distinction of being the first scheduled airline to serve Boracay. Other operators served the airport on a charter basis then. It became the Philippines' fourth flag carrier (after Philippine Airlines, Cebu Pacific and Air Philippines) in 2003.

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CHAPTER VII Key Marketing Strategies PRICING

Offering Belloraca Island Resort And Spa, experience luxurious Santorini in the Philippines for as low as Php 27,059/pax based on twin sharing

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PROMOTION

Using celebrities.

Zest Air its own website.

Domestic and international ticket sale all throughout the year.

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Chapter VIII Action Program Activity ZestAir acquiring bigger airplanes Time Frame January-Febuary Who will Benefit? Zest Air Implementation Fleet acquisition of ZestAir would be a combination of lease of brand new aircrafts and purchase of brand new units. As it celebrates its 4th year anniversary Puerto Princesa, Palawan received a roundtrip Gift Certificate for 2 to any Zest Air destination plus bag of Zest Air goodies and merchandise upon arrival of Zest Air's Airbus 320 flight from Puerto Princesa at the Manila Domestic Airport Terminal 4 and Zest Air pilots and flight attendants. Offers cheap introductory fares and frequently announces promotions on discounted airfares for its growing flight network. This development is part of Zest Airs plan to go public by listing its shares on the
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ZEST AIR Picks Its 5 Millionth Passenger

March

Consumers

Asia's most refreshing airline

April-June

Travelers on budget

In talks with foreign investors ahead of going public

July-August

Zest Air and Airline Industry

Philippine Stock Exchange Zest Air P88 OctoberZest Puerto Princesa Davao Promo Zest Airs seat sale September - October Frequent fliers and budget travelers One of the budget (low cost) airlines flying between major travel destinations in the Philippines more attractive as Zest Air launches its inaugural flight to the worlds largest city proper of over 23 million people with an introductory fare

November-December

Travelers

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Chapter IX Marketing Control

Activity LCC (lowcost carrier) tag

Time Frame All year round of operation

Who will Benefit? Consumers

Implementation Bringing in tourists and Filipinos directly to prime tourist destinations and secondary routes with minimal cost to the passenger Negotiating with those countries to increase the number of flight destinations to those countries Evolve to be a consumer driven model and we will make it easy for consumers. At the same time, we have got to emulate how the LCC operates in terms of cost. Also the airline will keep its Zest Air brand but they will refresh the branding, by

Department Responsible Marketing and Sales

Objectives To be the most preferred choice of consumers

Fly to new destinations out of Manila (Malaysia, Taiwan, Korea and China) Refresh and re-launch of the airline

Starting on October continuous during companys operation October

Consumers

Executive

To increase target revenue from international flights

Consumers

Marketing and Sales

To attract more consumers and build a better image of the airline

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AFP (Armed Forces of the Philippines) Forge Partnership

September

doing a couple of things like maybe change the color but we wont change the brand name Military All military personnel personnel will and their be given 10% dependents discount in as well as airfare cost to civilian and from any employees of local the AFP destinations being served by Zest Air. Meanwhile, their dependents, as well as civilian employees of the AFP, will get to enjoy 5% discount to any domestic destination

Marketing and Sales

Help lessen the high cost of air travel for our military personnel. It can, at the same time, provide a big boost to the morale of our men knowing that their efforts in serving the country and our countrymen are being appreciated especially during times of calamity, like the recent Habagat that flooded the Metro Manila

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Chapter X Financial Control

Activity ZestAir acquiring bigger airplanes

Cost P 1,000,000

ZEST AIR Picks Its 5 Millionth Passenger Asia's most refreshing airline In talks with foreign investors ahead of going public

P 30,000 P 300,000 P 500,000

Zest Air P88 OctoberZest Puerto Princesa Davao Promo Zest Airs seat sale

P 500,000 P 800,000

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