KUALA LUMPUR (Aug 21): Budget airline AirAsia Group Bhd saw revenue from its e-commerce platform, AirAsia.com, rose 118% year-on-year in the first quarter of this year as it rolled out new offers, promotions, flights and hotel bundle packages.
"As travel continues to gradually resume, more activities are authorised... which in turn will support the growth of our non-airline business divisions, particularly in the lifestyle, e-commerce and media verticals," said AirAsia chief executive officer Karen Chan (pictured) in a statement today.
AirAsia anticipates that its airline and ancillary revenues will gradually stabilise as non-airline revenues become a key driver of growth and business priority.
"In the future, we foresee our non-airline revenues will outperform our airline performance which is why our focus is on offering innovative products that encompass travel, lifestyle, e-commerce and media verticals, in both the B2B and B2C segments," said Chan.
"While Asean is our home and domestic travel is our short-term focus, we look forward to the reopening of international borders to realise the potential of airasia.com," she added.
In anticipation of international borders reopening soon, Chan said AirAsia is in final stages of discussions with key international airlines to connect their European and MEA networks directly with AirAsia’s vast Asean network.
"These strategic partnerships will complement our existing partnership with Kiwi.com, which provides a virtual interlining and connectivity optimisation engine to offer a one-stop-shop, best-price-guaranteed service for our customers."
The airline wants to position airasia.com as a leading one-stop travel and lifestyle e-commerce platform in Asean, offering products from flights, hotels, travel activities, shopping and more.
Chan said AirAsia has always regarded Asean as its playground, connecting its 640 million people to 160 destinations across Asia and the Pacific. "But with the pandemic still at large and continued restrictions to cross-border travel, we are looking at creative ways to overcome these limitations."
For now, the focus for AirAsia.com is to promote domestic travel until international borders reopen and travel restrictions are relaxed.
"Given AirAsia’s dominant market position (with over 73% market share in capacity in Malaysia), we are using our position of strength to stimulate domestic air travel where there is demand.
"Going back to our DNA which is all about making travel affordable for everyone, we will continue to innovate with more exciting products, leveraging on our one-stop travel shop ecosystem and focusing on our business divisions which are most relevant given current market conditions," said Chan.
"Based on our recent market survey, close to 45% of travellers want to travel immediately post lockdown. Flight searches on our website have increased by more than 150% post-hibernation period and as of June 2020, AirAsia.com receives 1 million daily active users.
"Our domestic travel promotions have been very well-received. We sold over a million seats group-wide in July and we continue to ramp up capacity. With restrictions on activities being lifted, we hope to achieve a load factor of 70%-80% by the third quarter of 2020," she said.
Chan noted that the aviation industry, being one of the heaviest impacted by the Covid-19 pandemic, is undergoing a period of consolidation — fare rationalisation will be a natural outcome.
"We continually review our products and innovate to best meet our customers needs, at unbeatable prices. We survived for 18 years in a hyper-competitive industry and became the leader of the low-cost carrier segment by providing the best prices, best Asean connectivity and best customer experience."
Under its recently-launched Unlimited Flight Pass in Malaysia and Thailand, AirAsia sold more than 200,000 passes and has received many requests for the product to be introduced in other markets.
"We are closely monitoring the domestic travel situation in all of our markets (that AirAsia operates) and are looking forward to extending the Unlimited Flight Pass to other markets such as Indonesia and the Philippines when flight restrictions have eased," said Chan.
To date, AirAsia partners close to 400 hotel chain properties and over 100 independent hotels across Malaysia, Thailand and Indonesia.
"In Malaysia, we are working closely with the Malaysian Association of Hotels to collaborate with more hotels, and hope to increase our partnerships with independent hotels in Kuala Lumpur, Langkawi, Penang, as well as Sabah and Sarawak."
At 3.48pm, AirAsia shares were up 0.01 sen or 1.52% at 67 sen, bringing a market capitalisation of RM2.24 billion. A total of 10.35 million shares were traded.
http://www.theedgemarkets.com/article/airasias-1q-ecommerce-sales-leap-118
