While "disruptive and different" is still the mantra that Tony Fernandes swears by, he says he's choosing to tread carefully even as he aspires to create an AirAsia Republic.
Now that Covid is “officially over,” so is AirAsia superapp’s ambitions of being a lifestyle superapp.
AirAsia will now be killing its other operations in the superapp to focus on what Tony Fernandes, CEO of AirAsia parent company Capital A, calls its bread and butter — travel.
“Travel has returned in full force, and I can officially declare that, in my opinion, Covid is over for AirAsia, so we will be going back to selling travel through the superapp,” Fernandes told Skift.
He said the company through its superapp business had offered a whole lot of products and services during Covid just to keep the turnover going.
“But then we are not a Grab or a Gojek, we are a Traveloka,” Fernandes said, promptly adding, “And perhaps a little bit of Grab and Gojek.”
Calling himself a Robin Hood against e-commerce companies like Shopee, Foodpanda and the “big boys,” Fernandes had in 2021 talked about bringing the airline’s underdog mentality to the building of a “low-cost unicorn” of Asian superapps.
Fernandes also said that he is trying to get all his 204 aircraft to fly by May.
“With all 204 planes flying and ferrying around 90 million passengers, the dynamics of the AirAsia superapp will change tremendously,” he said.
E-Commerce Through Duty Free
The AirAsia top boss said the superapp would now focus on delivering the best value flights across the region and the world as well increase its conversion of hotels.
“A big plan of mine is also to bring e-commerce in through duty free. We’re going to try and change the way people buy travel,” he said.
In May 2021, chief commercial officer Amanda Woo was made CEO to accelerate the growth of the superapp.
Another focus for the superapp in 2023 would be ride-hailing. “We’re now doing about 15,000 rides a day and we are tiny compared to Grab in Southeast Asia but then we were tiny as an airline when we started.”
The superapp would also be retaining the food delivery service, while doing it “a bit differently,” Fernandes said not divulging the details but with a promise of an interesting announcement soon on the food delivery front.
Calling fintech an essential part of travel, Fernandes spoke about the role that BigPay, Capital A’s fintech arm, would play in creating lending for travel as well as for insurance.
Last year, BigPay announced the launch of its fully digital loans as part of the wider suite of financial services offerings.
“Now that travel has returned, we’ve shifted our focus to making the superapp very much a travel fintech superapp.”
Announcing its third quarter results for the period ending September 30, 2022, AirAsia superapp posted a quarterly segmental revenue of $24 million, compared to $19 million in the second quarter.
The superapp achieved positive earnings before interest, taxes, depreciation and amortization of $3.7 million compared to $212,000 in the second quarter.
Since its launch in August 2021, the superapp’s ride-hailing vertical completed two million rides in the quarter ending September 30, 2022.
What Is AirAsia Republic?
Having created a loyalty scheme of almost 51 million members with 12 million active monthly users, Fernandes now feels it is time to unveil his vision of an AirAsia Republic, which in his words is “a dynamic country of people that are linked to the AirAsia ecosystem.”
With communities, ecommerce opportunities and messenger services through which users would be able to chat with each other, AirAsia Republic, according to Fernandes, is the future of the superapp and integral to airlines.
“It is a space where AirAsia brings Southeast Asia closer together, enabling the community to share information, engage and build connections and learn from each other. A member of AirAsia Republic would not need to step out of the ‘country’ for their travel solutions.”
And in a digital country, Fernandes believes crypto would be the perfect currency.
“I believe AirAsia should have a cryptocurrency. Travelers in Southeast Asia would like one currency to move around and we have the ecosystem to do that.”
However, while he said that he completely believes in the digital currency, Fernandes did point out that the crypto world is in a bit of a mess right now and therefore he’d choose to tread carefully.
2023 is also the year in which AirAsia X, the low-cost long-haul affiliate of AirAsia Aviation Group expects to exit the Practice Note 17 (PN17) status, according to Fernandes.
AirAsia X slipped into PN17 status in October 2021.
PN17 is issued by Malaysian stock exchange — Bursa Malaysia to companies considered to be in financial distress. Companies would be required to submit a regularisation plan to maintain the listing status.
On stepping down as the acting group CEO of AirAsia X, Fernandes said it was not so much a stepping down as it was the completion of a task.
“I had stepped in for a very short stint to resurrect AirAsia X. Once I achieved that and we got back to profitability, I went back to my real job, which is Capital A,” he said, adding that he expects the group to return to profitability from the second quarter of 2023.
Capital A owns BigPay, AirAsia superapp, logistics service Teleport, the aircraft engineering division Asia Digital Engineering and AirAsia Aviation, which doesn’t include AirAsia X.
The ‘Andriod’ View
In what he believes is an Android way of functioning which is more open source, distinct from the Apple view of everything being within the Apple ecosystem, Fernandes is also very sure that he wants to continue selling tickets of other airlines on his superapp.
With ambitions of being an Expedia or a Traveloka, he wants to make sure that he has everything for all travelers and dubbed his approach as “disruptive, inclusive and different.”
“There are very few people who would just buy AirAsia tickets. With Google search and travel sites offering so many options, if an airline has better offerings than us, then so be it,” he said adding that the superapp business is separate from the airline.
“The AirAsia staff also get upset when they see their competitors on the superapp. But then I’m trying to create value for the shareholders while creating new businesses,” Fernandes said.
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Tags: airasia, asia, asia monthly, capital a, china outbound, coronavirus recovery, expedia, fintech, food delivery, grab, online travel newsletter, ridehailing, superapps, tony fernandes, Traveloka
Photo credit: AirAsia's Tony Fernandes is now concentrating on travel for his superapp business. AirAsia / AirAsia