AirAsia Group remains confident of returning stronger, more robust and faster than many competitors in this new world of travel.
Given recent positive developments in the fight against COVID-19, and coupled with its stringent cost containment strategies, the successful pivot of airasia.com into a leading Asean digital travel and lifestyle super app and the steady growth of its non-airline businesses, AirAsia is positive it will continue to chart stronger growth in the coming months and well into 2021.
AirAsia’s third quarter 2020 operating statistics highlight the clear, quick path to recovery is well underway. There were strong improvements from every major domestic airline in the Group across many key metrics in comparison to the preceding quarter. These include a 36% increase in passengers carried by AirAsia Malaysia, 79% increase in passengers carried by AirAsia India and an increase of 65% of passengers carried by AirAsia Thailand.
Revenue performance has greatly improved with sales across the group up 57% this week versus the preceding week, supported by the latest airasia.com Super Sale that commenced yesterday (16 November 2020). Sales in Thailand for domestic travel reached 93% of pre-COVID levels yesterday and there has been a marked improvement in Indonesia with sales volume up 52% and sales value soaring 126% over the past week, as the airline continues to inject more capacity into these markets.
Confidence in flying restored
President (Airlines) of AirAsia Group, Bo Lingam said, “Air travel is essential for the world’s economy and AirAsia is already seeing strong signs of recovery in our key domestic markets where there is much pent-up demand. AirAsia’s domestic services in Thailand, for example, are already at close to 100% of pre-COVID capacity levels and there are similar strong positive signs from across the AirAsia Group including in Malaysia, Indonesia and the Philippines, indicating that forward bookings for future travel are already on the rebound in our major markets.”
“Positive developments on travel bubbles already being formed in Asia and numerous COVID-19 vaccines in near final stages of testing are certainly great news for the industry. The general outlook is that air travel will be bouncing back real soon; we expect to get back to pre-pandemic levels on many routes across the Group by mid-2021, if not earlier. I am not alone in this prediction; it’s a common view shared by many industry colleagues — that it won’t take very long before mass tourism returns to normal globally.
“It is also pertinent to note that globally, the risk of COVID-19 infection when flying is just 1 in 27,000,000 (27 million)! Stringent safety and hygiene protocols, drawn up in conjunction with world health and aviation authorities, have become a worldwide accepted convention in aviation. We can assure that aircraft cabins have now become amongst the cleanest and most hygienic places on earth, presenting an almost zero risk of infection to guests and crew.”
This is corroborated by a recent study by the International Air Transport Association (IATA) that reported only 44 cases of in-flight transmission of the virus detected among 1.2 billion travellers globally.
Focus on travel bubbles
With a network of over 160 destinations across Asia and the Pacific, AirAsia is well positioned in the aviation travel market to recover faster than many other airlines.
“A real bonus point is that the majority of our major international markets that are also tourism hotspots like Thailand, Singapore, Australia, Korea, Indo-China and Taiwan are coping extremely well with the pandemic and they are very likely to reopen borders first. We continue to work closely with tourism and airport partners to stimulate domestic air travel while making good progress in discussions on the formation of travel bubbles with low risk international destinations,” he said.
“Our businesses in Japan and India have been draining cash, causing the Group much financial stress. Cost containment and reducing cash burns remain key priorities evident by the recent closure of AirAsia Japan and an ongoing review of our investment in AirAsia India. A detailed network and fleet optimisation strategy has been implemented across the network, putting the right foundations in place for a sustainable and viable future. We continually review our network to ensure we fly the most popular and profitable routes. Asean is where our brand and foothold is strongest and that’s where our immediate focus will lie. Furthermore, our low fares stimulate demand and grow the air travel market such as the recent launch of a number of new domestic routes where we have seen our market share grow.
“Having one of the world’s lowest operational cost bases and being a leading brand in Asia certainly support our straight and clear path to recovery. But that never stops us from listening to our guests, and it’s very pleasing to note the highly positive feedback we have received over recent times from them. The key thing that we’ve learnt is that even during the pandemic, people have remained supportive of our brand. Not only are they willing to fly with us as soon as they can, they will also promote and recommend AirAsia to their friends and colleagues.
“It is incredible to see we are currently at 70 points in our net promoter score (NPS) rating, the highest we ever had since we started tracking our guest feedback. Although these recent high scores are from a majority of domestic flights, these achievements are a clear indication that our guests are very satisfied and looking forward to flying with us again as travel restrictions continue to ease and international borders reopen,” said Bo.
Digital pivot a game changer
Aireen Omar, President of airasia Digital said, “AirAsia has used the downtime during the pandemic to focus on developing our digital and other non-airline businesses. COVID-19 has caused the biggest crisis in aviation history with many airlines, including AirAsia, grounding their entire fleets at one point. However, a silver lining is that the pandemic presented AirAsia with the opportunity to fast track its super app project, which actually commenced three years ago.
“AirAsia has successfully pivoted from just an airline into a one-stop travel and lifestyle platform through the recently-launched airasia.com super app that is fast gaining a foothold amongst the Asean community and beyond, offering shoppers and bargain hunters head-turning deals for AirAsia and non-AirAsia flights, hotel bundles, duty free and merchandise, health, Islamic services, and much more,” Aireen said.
In a landmark development, airasia Digital’s fintech business BigPay that aims to be Asean’s first digital bank, has just been granted a community credit licence by the government of Malaysia, enabling it to offer a wider range of financial services including micro-credit to lower income and unbanked segments of the community slated for early 2021.
Meanwhile, its logistics venture Teleport has grown significantly during the pandemic, providing the much sought after air logistics solutions to businesses across the region and now last-mile door-to-door delivery services in key cities. Santan, touted to be the world’s first restaurant to offer in-flight meals on-ground, is set to have around a dozen outlets in Malaysia alone by December, followed by other Asean countries from next year. Modelled as a franchise fast food chain, Santan offers Asean-inspired dishes hugely popular on AirAsia flights like nasi lemak, chicken rice, nasi padang, basil chicken and beef tapa.
Never waste a crisis
Aireen continued “At AirAsia, we never waste a crisis and the team has been working doubly hard during this travel downtime to come up with product enhancements and developments to make flying not only safe and affordable, but more seamless, contactless and convenient than ever before.”
“The development of our digital and non-airline revenue business divisions is definitely a game changer for AirAsia. We are highly optimistic that airasia Digital’s ventures like Teleport, BigPay, BigRewards, Santan and the airasia.com super app will break even in 2021, paving the journey to profitability by 2022. BigRewards will continue to go from strength to strength and is well on its way to become Asean’s largest travel and lifestyle rewards platform.”
AirAsia has implemented many new innovations as part of the airline’s digital transformation, including biometric facial recognition known as F.A.C.E.S., contactless check-in facilities at the airport and Scan2Fly – an industry leading technology where guests can scan and upload any required medical documentation during the online self check-in process to determine a passengers’ eligibility to fly in real time, before arriving at the airport.