When pandemic offered Lemons , make Lemonade out of that - Something similar is the philosophy , that the Malaysia based AirAsia Chief has is trying to demonstrate.
When pandemic hammered air travel during the second quarter of 2020, let's say around May, Tony Fernandes was early to read the trends and understand the need of diversification, while restructuring his airline venture.
He understood the need of the time, need of the pandemic lock downs, the AirAsia brand launched a food delivery business in Kuala Lumpur and malaysians readily accepted that.
The venture did not stop there, it went on expanding to other malaysian cities and also singapore. AirAsia's large digital customer base is a great boon in it .
With the help of 'Super App' tony Fernandes wants to be the “the best delivery guy in town” as published in The Edge Malaysia .
Now, the company plans to raise as much as US$300 million to expand the airline’s digital business arm, AirAsia Digital in other hubs in Southeast Asia.
Fernandes has dreams ,he also talks about plans for offshoots in ride-hailing fresh grocery delivery, air taxis, and drone delivery services.
Fernandes's Optimism talks for itself, even when his airline business is facing the crisis of a lifetime and airasia recently announced of a record net loss of 2.44 billion ringgit (US$590 million) in the October-December quarter.
“two ways to deal with life, you can put your head in the sand and cry and say life is unfair. Or we can go ahead and do something about it,” Fernandes said. “Why waste a crisis? We haven’t wasted this crisis.”
Airline business is in a mess right now, with fierce competiotion from Indonesia’s Lion Air and Singapore Airlines-owned Scoot, airline Industry is under a 'derated take off mode' in pandemic , normalcy of which is nowhere to be seen.
Many experts believe, budget carrier’s will to re-invent itself “as more than an airline” will definitely a plus point to sail through the crisis , while maintaining the necessary liquidity.
Fernandes believes, the AirAsia super-app will have a US$250 million turnover this year, the basis of which hinges on the digital infrastructure and a 60 million-plus customer base to take on the competition with established players.
"I understood AirAsia’s rationale for seeking to expand its wings “horizontally and vertically” from its core airline business, They have brand recognition and a sizeable existing customer base,” says, Nungsari Ahmad Radhi , a former chairman of Malaysia’s regulator for civil aviation
Frederik Paulus, economic adviser to the local think tank Research for Social Advancement, says,
AirAsia’s experience operating in a low-margin environment and focus on costs make them a credible competitor.
Analysts ask Untill when? Is this new business just to Cover the Gap of airline losses?
The Edge interview reads, Fernandes himself quoted,
“Am I doing digital to cover the gap ? No,” he said, when asked if the new revenue stream would close the gap caused by fallen earnings , We’re doing digital because there’s an opportunity. Do I think the gap will be covered eventually, of airlines? It’s impossible to say digital is going to cover the gap now. Impossible.”
“The gap in the airline business needs to be covered by the airline business … It is an opportunity to diversify the business, and diversify earnings, and utilise resources such as people, data, websites, to build a new business and build an ecosystem.”
Picture Source : Airasia.
Quotes : The Edge.
