Now that Covid is “officially over”, so is the AirAsia superapp’s ambitions to be a lifestyle superapp.
AirAsia will now wind down its other operations in the super app to focus on what Tony Fernandes, chief executive of AirAsia’s parent company Capital A, calls its bread and butter — travel.
“Travel is back in full force and I can officially say that I think Covid is over for AirAsia, so we’re going back to selling travel through the super app,” Fernandez told Skift.
He said the company, through its super apps business, offered many products and services during Covid just to maintain turnover.
“But then we’re not Grab or Gojek, we’re Traveloka,” Fernandez said, adding immediately: “And maybe a bit of Grab and Gojek.”
Calling himself a Robin Hood against e-commerce companies like Shopee, Foodpanda and the “big boys”, Fernandez in 2021 talked about bringing the airline’s underdog mentality to building a “cheap unicorn” of Asian super apps.
Fernandez also said he was trying to get all 204 of his planes flying by May.
“With all 204 aircraft flying and carrying around 90 million passengers, the dynamics of the AirAsia super app will change significantly,” he said.
E-commerce through Duty Free
AirAsia’s top boss said the super app will now focus on providing the best value flights in the region and the world, as well as increasing hotel conversions.
“My big plan is also to introduce e-commerce through duty-free trade. We will try to change the way people buy travel,” he said.
In May 2021, chief commercial officer Amanda Wu was appointed as CEO to accelerate the growth of the super app.
Another highlight for the super app in 2023 will be travel. “We’re currently doing about 15,000 trips a day and we’re small compared to Grab in Southeast Asia, but then we were small as an airline when we started.”
The super app will also retain the food delivery service while making it “a little different,” Fernandez said, without divulging details, but with the promise of an interesting announcement soon on the food delivery front.
Calling fintech an essential part of travel, Fernandez talked about the role BigPay, Capital A’s fintech arm, will play in creating travel loans as well as insurance.
Last year, BigPay announced the launch of its all-digital loans as part of its broader range of financial services offerings.
“Now that travel is back, we’ve shifted our focus to making the superapp a very fintech travel superapp.”
Announcing its third-quarter results for the period ending September 30, 2022, superapp AirAsia reported quarterly segment revenue of $24 million, compared to $19 million in the second quarter.
Super App achieved positive earnings before interest, taxes, depreciation and amortization of $3.7 million, compared to $212,000 in the second quarter.
Since launching in August 2021, the ride-hailing vertical of the super app completed two million trips in the quarter ending September 30, 2022.
What is AirAsia Republic?
Having built a loyalty scheme of almost 51 million members with 12 million active monthly users, Fernandes now feels it is time to unveil his vision for AirAsia Republic, which he says is “a dynamic country of people who are connected to the ecosystem of AirAsia.”
With communities, e-commerce capabilities and messenger services through which users will be able to chat with each other, AirAsia Republic, according to Fernandes, is the future of the superapp and an integral part of airlines.
“It is a space where AirAsia brings Southeast Asia together, allowing the community to share information, engage and build connections and learn from each other. An AirAsia Republic member should not have to go outside the ‘country’ for their travel decisions.”
And in a digital country, Fernandez believes that crypto will be the ideal currency.
“I believe AirAsia should have a cryptocurrency. Southeast Asian travelers would like a currency to move around and we have the ecosystem to do that.”
However, while he said he fully believes in the digital currency, Fernandez pointed out that the crypto world is in a bit of a mess right now and so he would choose to tread carefully.
Resurrection of AirAsiaX
2023 is also the year AirAsia X, the low-cost subsidiary of AirAsia Aviation Group, expects to exit Practice Note 17 (PN17) status, according to Fernandes.
AirAsia X transitioned to PN17 status in October 2021.
The PN17 is issued by the Malaysian Stock Exchange – Bursa Malaysia to companies deemed to be in financial difficulty. Companies will be required to submit a regulatory plan to maintain their listed status.
When he stepped down as acting CEO of AirAsia X, Fernandez said it was not so much a retirement as a mission accomplished.
“I had stepped in for a very short period to resurrect AirAsia X. Once I achieved that and we returned to profitability, I went back to my real job, which is Capital A,” he said, adding that he expected the group to return to profitability from the second quarter of 2023
Capital A owns BigPay, superapp AirAsia, logistics service Teleport, avionics division Asia Digital Engineering and AirAsia Aviation, which does not include AirAsia X.
The “Andriod” view.
In what he says is a more open source Android way of working, different from Apple’s view that everything is within the Apple ecosystem, Fernandez is also very sure he wants to keep selling tickets of other airlines in its super application.
With ambitions to be Expedia or Traveloka, it wants to make sure it has everything for all travelers and has called its approach “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, so be it,” he said, adding that the super apps business is separate from the airline.
“AirAsia staff also get upset when they see their competitors on the super app. But then I try to create shareholder value while also creating new businesses,” Fernandez said.