More than just an airline - AirAsia is increasingly shifting its focus to non-airline businesses as it journeys to travel and lifestyle platform

17 January, 2020

As fuel costs, the economic slowdown and intensified competition continue to affect the aviation industry, more airlines are turning to alternate sources of revenue in order to increase profits and stay afloat. AirAsia, known as an innovator in the field, is focused on expanding its non-airline businesses with an aim to become a travel and lifestyle platform as well as an airline group.

RedBeat Ventures, AirAsia’s digital arm, entered a share sale agreement with AirAsia and AirAsia Investment in Jun-2018, to acquire nine non-airline businesses: AirAsia BIG Loyalty, BigPay, travel360, ROKKI, Ourshop, RedCargo Logistics, RedBox Logistics, Vidi and RedTix.

RedBeat group president Aireen Omar stated the move aimed to “more effectively expand and monetise” the digital businesses, as well as broaden its digital footprint. Ms Omar later added there is potential for AirAsia’s digital business to overtake its airline business.

The group has also placed focus on transforming Teleport, AirAsia’s cargo and logistics platform, into “a social commerce player”. It launched Teleport Social, a payments and delivery solution, to build the platform “beyond a traditional business-to-business air cargo business” and facilitate “consumer-to-consumer trades via social media". Teleport’s tonnage increased +7% year-on-year in 3Q2019, against a global cargo industry recession of -5%.

AirAsia also announced a collaboration with Google Cloud in Oct-2018 to integrate machine learning and artificial intelligence into its business and culture, as part of the transformation into a "travel technology company". RedBeat Ventures and Google Cloud plan to establish a tech academy in 2020, to provide training and enable the development of new businesses within AirAsia Group.

AirAsia’s non airline expansion has also included the launch of RedRecords with Universal Music Group in Dec-2019, focusing on signing and developing artists in Asia, as well as the launch of a fast food restaurant in the same month, featuring dishes from its in flight menu, as reported previously by The Blue Swan Daily. Santan & T&CO GM Catherine Goh reported the restaurant opening was to accommodate “a significant appetite for our inflight menu offerings beyond our flights across the region”.

The group is also enabling passengers to book travel with other airlines via its own website, a notable step in its expansion to become a travel and lifestyle brand: its head of airline distribution described the move as an opportunity to “partner directly with airlines and companies who complement our existing network and travel services beyond Asia Pacific".

In addition to providing alternate sources of revenue, AirAsia’s digital ventures act as a support function for the group’s airline businesses, enabling expansion of inflight connectivity, duty free sales, e-payments and loyalty. CEO Tony Fernandes stated the company’s separation into airline and digital divisions will enable a streamlined business with “better clarity and business focus”.

AirAsia’s digital strategies show no signs of slowing down, and are proving to be extremely beneficial in generating revenue and increasing efficiency. They are also rapidly transitioning AirAsia from an airline to a travel and lifestyle platform, which is utilising the digital realm to its every advantage.