AirAsia’s digitalisation efforts go as far back as 2016, when the carrier’s CEO Tony Fernandes announced plans to turn AirAsia into a fully fledged “digital airline”. Despite the COVID-19 crisis, the airline has been persevering with this vision, and earlier this month it announced a new identity as “ASEAN’s super app”, which aims to offer a simpler, faster and more convenient user experience for customers all in one single platform.
Unified platform across travel and lifestyle
This week, FTE tuned in for an inspiring presentation by Karen Chan, CEO, AirAsia.com, during the Moodie Davitt Virtual Travel Retail Expo, where she provided more details on how the airline is transforming from a budget carrier to a digital lifestyle company, tapping into new business verticals, and proactively reigniting travel through a digitised and sanitised passenger experience. She said: “Our platform is a way of life. It’s all about connecting people to people, and it’s where community meets commerce. All this bring us to the idea that AirAsia.com will become a unified platform across both travel and lifestyle.”
The airline’s new vision spans across three main pillars: travel, e-commerce and fintech. In terms of travel, AirAsia’s aim is to become one of the leading OTAs in the Asia region through its diverse offering, which includes flights, hotels, activities, deals, ancillary products, and its SNAP flight and hotel booking platform. “SNAP is our secret weapon. We’re the only OTA that has an airline and we can now provide the best price guarantee for any flight and hotel bundle across eight countries in ASEAN.”
She added: “Tony [Fernandes] always tells us never waste a crisis. Before the crisis hotels didn’t want to talk to us, however, over the past six months during the lockdown we were able to go and sign up over 500 hotel chains within ASEAN, so that we can now go ahead and compete with all the other OTAs.”
Chan also highlighted another initiative that has been launched this week, AirAsia Health, which will provide medical charter flight services for patients and medical tourism. She explained: “AirAsia.com is now offering the first end-to-end online transaction from initial consultation all the way to booking your hotel and your flight, having a personal concierge to pick you up and accompany you with the right language during your transition to the hospital. Now we can arrange this at the fingertips of one app on AirAsia.com.”
Driven by the bleak outlook due to COVID-19, AirAsia has also pivoted its e-commerce business and has seen an opportunity to grow its logistic arm, Teleport. The airline is enabling customers to order shopping and duty free products, as well as food and fresh produce, that can now be delivered straight to their door.
Chan explained: “E-commerce is for driving velocity and frequency of consumers coming to our app. For travel, majority of the frequency is about 2 to about 5 times per year, but by launching e-commerce we would like to start driving frequency to weekly, and later on to daily.”
The final vertical Chan focused on was fintech, which helps the airline create a unified payment and content system, allowing customers to redeem their loyalty points across AirAsia’s entire network. All of these verticals are underpinned by AirAsia’s media group, which encompasses adtech, content and media-related offerings, under AirAsia Media Group. The Media Group plays an integral role in the airline’s fully integrated travel and lifestyle ecosystem-building efforts.
“We’re now developing a lot of proprietary content and advertising using our own ad tag and using our own data monetisation to ensure that all the merchants who are signing up for our e-commerce platform would be able to reach the right consumer segment at the right time.
“Now with the ad technology and the big data that we have, we can serve targeted ads. If we know that a consumer has been searching for a flight, for instance from Kuala Lumpur to Osaka, on the flight search page we’d be able to go and serve by geo-location the hotels closest to the airport.”
Responding to customers’ needs for flexibility
Chan also touched on the need to ensure flexibility during uncertain times. “As we start working in a post-COVID-19 environment, we need to be relevant to our consumers,” she said. “They are looking for flexibility of date changes, because they don’t know when international borders will be opened.”
In response to this, the airline has launched an Unlimited Pass offering to provide flexibility, but also stimulate travel demand. The subscription-based model allows passengers to redeem unlimited point-to-point flights within Malaysia and Thailand, which could be used for a 12 month period.
“When we launched the Unlimited Travel pass, as we started to pivot away from an airline, it offered us cash flow liquidity at a time when all the aviation industry is hurting. We have already sold over 200,000 passes between February and now.
From duty free to fresh groceries
Chan also presented a case study, looking into how the airline has been supporting local communities during the crisis through its e-commerce platform. “A testimony of how agile AirAsia.com has been is really about how we have been able to build and pivot some of the current portals that we have to start supporting local communities.”
The airline’s online duty free shop, called OURSHOP, pivoted from selling perfumes and cosmetics to selling fresh groceries, focused on supporting local small and medium businesses. The initiative was launched in April under a campaign called Save Our Shops (S.O.S) where 2,000 merchants were able to sign up and become e-tailers at zero commission and zero listing fees to market their products on the platform.
“Over a four-week period, our product and tech team were working around the clock to pivot our duty free shop called OURSHOP from selling perfume and cosmetics to selling fresh groceries. Was this easy – definitely not; did we make a lot of mistakes – yes of course. It was totally overwhelming to go and process all of the different payments, but it was a huge learning curve for everybody. What we have achieved is that we enabled local small to medium merchants to be able to have the platform to survive.”
Creating new revenue-generating opportunities
AirAsia’s pivot is certainly an inspiring story of the direction in which other airlines might be heading in the next few years. To support the industry in creating new revenue-generating opportunities throughout the end-to-end air travel experience, FTE is proud to announce its own new initiative – the FTE APEX Business Model Transformation Think Tank. The Think Tank will explore and identify how airlines, airports and their partners can embrace new approaches and collaborate more closely to solve long-running industry challenges and frustrations that have been exacerbated by the COVID-19 crisis.
The forward-thinking group will be led by Satyaki Raghunath, Chief Strategy & Development Officer, Bangalore International Airport Limited (BIAL), who will be joined by key industry players including Javed Malik, Group COO, AirAsia; Christina Cassotis, CEO, Pittsburgh International Airport; Juha Jarvinen, CCO, Virgin Atlantic and President Emeritus, APEX; and Robert Carey, CCO, easyJet. The initial recommendations will be presented during FTE APEX Virtual Expo, which will take place on 8-9 December. For more information, visit the event website here.