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| AirAsia.com Chief Executive Officer (CEO) Karen Chan |
Evolving from a ticketing platform for AirAsia flights, AirAsia.com is now growing to become a leading one-stop travel and lifestyle e-commerce platform in ASEAN, offering products from flights, hotels, travel activities, shopping and more.
Amidst challenging operating conditions, AirAsia.com has charted significant growth through diversification and digital innovation. AirAsia.com Chief Executive Officer (CEO) Karen Chan shares her views on this.
Finding opportunity in every crisis
1. What are the recent developments by AirAsia.com?
We’ve always regarded ASEAN as our 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.
With that in mind, our Unlimited Flight Pass which was recently launched in Malaysia and Thailand allowing guests to ‘buy now, fly later’, is one of our latest initiatives to help revitalise the domestic travel industry. This is especially relevant for customers given the uncertainty we are facing due to border closures and air travel restrictions. The first of its kind in Asia, our launch in Malaysia and Thailand was a huge success, reflecting strong consumer demand to travel again. We sold more than 200,000 passes over our campaign period and have 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 and are looking forward to extending the Unlimited Flight Pass to other markets (such as Indonesia and the Philippines) when flight restrictions have eased.
Following the success of the Unlimited Flight Pass in Malaysia and Thailand, we’ve extended the deal to include hotels and activities. Our Hotel Bundle Deals coupled with our Activity Bundle Deals are not only affordable and convenient, but also perfect for staycations or a family getaway. Customers can expect to save up to 50% for a stay of up to ten nights with our partner hotels at their leisure.
2. How’s the progression of SNAP since its relaunch in June 2020?
SNAP, a flight and hotel bundle with the best price guaranteed, is another one of our latest products launched to revitalise domestic travel. Our most popular fly and stay bundle destinations currently include Langkawi, Kota Kinabalu and Penang. With growing demand for our products after months of lockdown, it is evident that many consumers are hungry for a holiday!
We are able to offer the best price guaranteed because we are the world’s only Online Travel Agent (OTA) that owns an airline. We optimise our fares to ensure the best value based on consumer demand for every flight, route and sector. We partner directly with 3 to 5 star properties to provide a flight and hotel combo at an unbeatable price.
To date, we have partnered close to 400+ hotel chain properties and over 100 independent hotels across Malaysia, Thailand and Indonesia as we continue our ASEAN expansion.
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 East Malaysia.
Having seen the encouraging take up of the SNAP bundle from our customers, we plan to expand to the rest of ASEAN in the coming months, starting with Thailand.
Staying true to our DNA
3. How is AirAsia.com overcoming the challenges during these unprecedented times?
Given the new reality that we’re all facing, AirAsia.com’s top priority is maintaining a growth trajectory amidst a challenging economic climate. As a disruptor in the industry, we see crisis as an opportunity to grow in an industry that is consolidating.
The focus for AirAsia.com at this time is to promote domestic travel until international borders reopen and travel restrictions are relaxed. Given AirAsia’s dominant market position (e.g. 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. At the same time, we will continue to play our part in supporting local communities and deserving causes wherever we can, such as our Save Our Shops campaign, during which we helped almost 2,000 small independent physical retailers onboard their operations to our e-commerce platform. Our recent “Korban Perdana with IKHLAS” initiative in conjunction with Hari Raya Korban contributed to 1,600 families
4. As airlines reduce capacity and competition increases, what are your plans in keeping travel affordable for everyone?
Fares are a function of capacity and demand. The aviation industry, being one of the heaviest impacted, is undergoing a period of consolidation - fare rationalisation will be a natural outcome.
The core of AirAsia’s value proposition has always been about providing value, choice and innovation. 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.
As AirAsia.com becomes ASEAN’s fastest growing travel and lifestyle platform, we anticipate that our 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.
5. Any other initiatives in the pipeline by AirAsia.com?
With the ‘new normal’ in place, we have had to realign our business priorities from travel anywhere, to domestic travel for the short term.
We have also recently launched IKHLAS.com, our platform for Muslim-friendly travel and lifestyle products. IKHLAS has multiple category services catering specifically for Muslims, from FIT (“Free Independent Traveller”) Umrah and Haj travel options (when pilgrimage resumes), to Halal-certified consumer products on its e-commerce marketplace, and online Qurban, so Muslims can still perform their religious duties even during travel restrictions.
On the road to recovery
6. In Q1, AirAsia.com revenue went up 118% as it rolled out new offers, promotions, flight and hotel bundle packages. Can we expect the upward trajectory to continue in the following quarters?
As travel continues to gradually resume, more activities are authorised and we begin to become accustomed to the new normal, we expect to see a gradual recovery in travel activity, which in turn will support the growth of our non airline business divisions, particularly in the lifestyle, e-commerce and media verticals.
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 as a leading provider of ASEAN’s best value travel and lifestyle products.
In anticipation of international borders reopening soon, we are also 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.
7. How do you see the industry’s recovery post-hibernation? Is demand in the market picking up as expected or beyond?
Based on our recent market survey, close to 45% of travellers want to travel immediately post lock-down. 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 Q3.
Following positive consumer reception to our domestic travel products, we foresee greater traction for international travel once travel restrictions and quarantine requirements are lifted.
Given the interconnected nature of the ASEAN economy and the fact that tourism collectively represents 15% GDP of the 5 largest ASEAN countries, we're looking forward to the reopening of borders and can't wait to paint the skies red again!
