Low-cost airline AirAsia had a troublesome 2020. However its CEO, Karen Chan, is taking a glass half full method. She says the journey downturn and subsequent fallout for AirAsia was a blessing in disguise. It pressured AirAsia to look exterior its consolation zone and at a brand new means of doing enterprise. Now, Ms Chan plans to rework AirAsia into a life-style model. Because of this, by the mid-2020s, she expects 50% of AirAsia’s income will come from non-aviation sources.
AirAsia desires to construct on already stable ancillary income streams
Talking at a CAPA Live occasion on Wednesday, Karen Chan spoke about her imaginative and prescient for AirAsia and what it might imply for the airline.
“We anticipate in 5 years time, mainly by the tip of 2024, that 50% of (AirAsia’s) income can be coming from non-flight associated non-aviation-related income.”
As a low-cost provider, AirAsia already has useful ancillary income streams. Their base fares are low-cost, however checked-in baggage on quick sectors begins from US$12, seat choice begins from slightly below $3, and a reheated container of AirAsia’s fairly good nasi lemak prices simply over $4. In 2018, ancillary income made up 22% of AirAsia’s whole income. Round half of that 22% got here from baggage costs.
Final yr, AirAsia Group chief government Tony Fernandes, stated his airline group was diversifying.
“AirAsia.com is extra than simply promoting airline tickets,” he stated. “We now have the identical potential to promote resort rooms. I can do some loopy issues. I can say I can purchase inns, ebook a resort room with us and I can provide you a free flight. Hotels might be as giant as AirAsia tickets.”
Not simply an airline, AirAsia desires to be your life-style companion
Yesterday, Karen Chan spoke about AirAsia’s ambitions to turn into a fully-fledged on-line journey company that gives not simply inns but additionally a spread of journey and life-style merchandise and experiences.
“Not all of the flights are all the time full, and the load issue is not going to be 100%,” stated Ms Chan.
“So the unsold infantry, and since they’re so perishable, at the same time as an 85% load issue for an Airbus A320, I nonetheless have about 20 to 25 seats unsold. I’ll now be capable to bundle that unsold stock for one ringgit or 25 cents with the resort’s direct stock. And I will go into the market with a greatest buys assure.
“We are able to go and broaden into the place different airways are simply not ready to take action.We really need to go and be seen as mainly a life-style companion.”
AirAsia desires to raised harness its passenger database
AirAsia’s ancillary income plans are usually not restricted to the journey fundamentals of inns, transfers, and facet excursions. The airline desires to construct its supply and e-commerce enterprise. AirAsia sees itself as a future Asian e-commerce large. Nevertheless it’s not simply Amazon parcels AirAsia desires to ferry round. AirAsia has detailed information on 75 million former passengers in its database. They know you bought a nasi lemak in your final three AirAsia flights. Ms Chan desires to get right down to the nitty-gritty. She desires to have the ability to ship that meal to your private home.
“Information is mainly the brand new black gold for us,” Ms Chan stated.
With AirAsia’s fortunes taking a hammering in 2020, there’s a great cause why the airline desires to broaden its ancillary income sources. Whether or not an affordable and cheerful low-cost provider out of Southeast Asia can efficiently remodel into a life-style model is one other subject. Regardless of the outcome, however it is going to be fascinating to look at.
What do you suppose. Is AirAsia the sort of life-style companion you’re in search of? Is the airline proper to chase extra sources of ancillary income? Put up a remark and tell us.