Pandemic-hit Malaysian carrier AirAsia Group, which reported a record quarterly loss of $590.72 million for the October-December period 2020, is planning to launch ride-hailing services in its home country, said its group CEO Tony Fernandes.
“I’ve got eight years of Grab doing it to learn from. I don’t have to waste all that money, with experimentation, building technology, training drivers, and training the market how to order… they have done all that for me. The ride-hailing model has been built. Everyone in Malaysia knows how to use it,” he told local media The Edge Weekly in an interview on Tuesday.
The move is part of Air Asia’s bigger plan of becoming a super app. It had recently launched food delivery services in Malaysia and Singapore and conducted pilot trials for drone delivery services in Malaysia. It also has plans to list its logistics arm Teleport, as it aggressively expands its non-aviation businesses.
Asked on the targeted launch of the ride-hailing services, an AirAsia spokesperson told DealStreetAsia, “Any announcement on the new service will be made in due course.”
Fernandes believes there is an advantage in combining aviation with ride-hailing as every passenger who arrives at the airport on a flight will book a taxi ride as well. “How are you going to compete with Grab? Every passenger that arrives on the Kuala Lumpur International Airport (KLIA) sees me first before anyone else. Before a taxi, before Grab. When you book your flight, you can book your taxi,” he was quoted as saying.
“Why do we want to be in ride-hailing space? It’s important to get the velocity … it’s all about conversion. Can I convert someone from ride-hailing to buy some food?” He says the airline wants users to open the app every day by combining all its businesses.
“The main thrust of this digital transformation is logistics. That’s what I’m really after..and no super app can do what we do, because we have 245 planes,” he said.
AirAsia is also in the midst of integrating its e-wallet BigPay into its AirAsia app, while all its loyalty transactions will be on airasia.com.
“We’re the first company in Malaysia, I dare say, using the internet to sell our products… People forget we were a digital company long before Grab, Shopee, Fave, and Gojek. We have that DNA in our system,” said Fernandes in the interview.
The budget airline’s record loss was on account of a 92% fall in revenue to 267.4 million ringgit as capacity shrank by 88% compared to a year ago, mainly because of lower capacity in Malaysia, the Philippines, and Indonesia, as international borders remained closed, showed a regulatory filing.