Zest Air cancels flights to Taipei

MANILA, Philippines – The escalating row between Taiwan and Philippines and Taipei has started to spill over into the country’s tourism sector, with some airline and hotel operators starting to express concern and others already feeling the pinch in the wake of the killing of a Taiwanese fisherman in Philippine waters.

Former Philippine ambassador and businessman Alfredo Yao said Zest Air, a budget carrier he started in 2008, is temporarily halting daily chartered flights from Kalibo, near tourist hotspot Boracay Island, to Taipei until tensions simmer down.

Yao, who confirmed a report that first appeared in an online news publication, said the service was very popular among Taiwanese tourists, especially during this time of the year.

“It’s a daily flight: the [air charter company] requested the cancellation and they have a valid reason,” Yao said in an interview. “We were already planning to have scheduled flights and we were talking to the ambassador of Taiwan, then the incident happened,” Yao said, referring to the death of a fisherman after the Philippine Coast Guard reportedly opened fire on a Taiwanese vessel within Philippine waters last May 9.

The death has sparked a public outcry in Taiwan, whose leader Jiang Yi-huah described the death as a “turning point” in its relations with the Philippine government.

Only Zest Air has cancelled flights to Taipei. The country’s two largest carriers, Philippine Airlines Inc. and Cebu Pacific, are so far continuing flights to Taiwan, their respective spokespersons said.

Philippines AirAsia, the domestic unit of Malaysia’s AirAsia Bhd and owner of 49 percent of Zest Air, will continue to operate flights from Clark to Taipei, chief executive officer Marianne Hontiveros said.

“Of course we worry but we also trust that both governments will resolve this soon,” she said in a text message.

Yao said he hoped the problem would be resolved sooner rather than later. He noted that his hotel business on Boracay was already experiencing cancellations from Taiwanese tourists after their government issued a warning against travelling to the Philippines.

Taiwan is the Philippines’ fifth biggest market for tourists at 216,511 visitors last year.

Yao owns the 55-room Sol Marina resort on Boracay where rates start at P5,200 per night, information on its website showed.

“We are already seeing some guests cancel their bookings,” he said.

The resort, which claims an 80 percent occupancy rate, can sometimes accommodate as many as 40 Taiwanese tourists per day, Yao said.

It was difficult to obtain a broad consensus among hotel operators, many of whom would prefer to keep information about cancellations private.

Officials of Ayala Land Inc., which operates hotels in Makati City and El Nido, Palawan, and Alliance Global Group, operator of the country’s largest integrated gaming complex, Resorts World Manila, did not immediately respond to calls from the Philippine Daily Inquirer.

Andecdotal reports also suggested some casinos operating outside Metro Manila were feeling the impact of the escalating tensions between Taipei and Manila, said Willy Ocier, vice chair of Belle Corp., a company controlled by billionaire Henry Sy.

“I believe Laoag, Subic and Clark casinos are hard hit,” Ocier said. “Taiwan is a significant trading and tourism partner. I hope things get resolved soon in a peaceful way.”

Belle, together with Macau’s Melco Crown Entertainment, are set to raise the curtain on a $1.2 billion casino project in Entertainment City Manila by July next year.

It is the second of four licensees to open in the 120-hectare gaming complex. The Solaire and Resort and Casino Manila, owned by Enrique Razon Jr., was the first to open last March 16.

A source within Solaire said it was still “too early” to determine the impact on its operations, given the specialized nature of the gaming business and the clientele it attracts.