AirAsia Group going all in on logistics and digital

Tony Fernandes describes his Teleport and cargo enterprise as “diamond in the rough”

Despite media studies painting a dire situation in Malaysia of history every day bacterial infections and continuing lockdown actions, Tony Fernandes, AirAsia Team CEO, projected optimism and a combating spirit in the course of his job interview in the course of CAPA Stay July 2021 this week.

Speaking to
government chairman Peter Harbison, he spoke of the document rate of vaccinations
having place in Malaysia – 350,000 a day, “impressive for a state our size” –
and believed that, hunting at how life was coming back again in Europe and the US,
“we’re about 5 months powering all people but we’ll get there in the end”.

Domestically,
he believed that only 10{46dd52bca0123ad67b2d1222819e83fd0a56e45ca5068239f05f0c514f1e20f9} of AirAsia fleet was flying. “We’ve possibly acquired another 6 months of this and
then I believe points are likely to start out commencing to open up up completely,” he
explained, pointing to Thailand, Indonesia and the Philippines where “everyone wishes
to open up tourism”.

Even though waiting for passenger demand to return, Fernandes mentioned he was heading all in on the cargo business enterprise by way of the Teleport automobile but in a different way from other airlines. Prior to Covid, and anticipating the e-commerce revolution, AirAsia experienced commenced to assume about cargo the same way it does passengers.

“Why just cannot we do to
cargo what we did to passengers? I removed the intermediary. So we started out that
method. To start with thing is, we received rid of all of the GSAs, and we started off working
more with freight forwarders, and now we’re beginning to offer extra with direct
shoppers.”

It then built a
blockchain system to allow the airways inside of the group to provide room
with each other. With Covid, now driving e-commerce to an additional stage, “air cargo now
has turn out to be much a lot more highly-priced or significantly more valuable, so what was a awesome to
have has turn out to be a thing that could be as strong as our passenger services”.

Contacting it a “diamond
in the rough”, he explained, “I want to be part of the whole logistics chain.” That
signifies “first mile, very last mile, mid mile” and that means “we deal with anything
from initial mile to very last mile, together with warehouse. Be a courier, get all our
planes up in the air, there is no one that can truly match us in terms of speed
in South-east Asia, and be an e-commerce provider”.

He identified as logistics his fourth incarnation – his very first was accountancy, 2nd was rock and roll and third was airline. And the fifth? “This entire digital journey we’re heading on.”

Whilst he did not deal with the fifth incarnation in the interview, AirAsia’s most recent move to acquire GoJek’s Thailand functions in an all-share offer is aspect of that journey. Fernandes has been speaking about making an ASEAN superapp and referred to the Gojek deal as “turbocharging” these ambitions.

The
group presently has a entire electronic economy ecosystem, which includes in excess of 15
distinctive non airline items and lifestyle solutions on its digital e-commerce
platform in Malaysia. “Now it is time to acquire it to the next level,” he explained.

On
the airline entrance, it is also back again to focusing on South-east Asia just after a
pair of misadventures past his home playground. “We shut Japan, I suggest
that just wasn’t likely to get the job done with two planes, which is a disgrace, since I
assume we could have carried out a really very good career in Japan. We’re just about out of
India.

“I’m
just likely to be focusing on South-east Asia. We’ve bought a Filipino operation,
which is probably on the lookout improved than it was. The Thai operation’s obtained clarity of
intent now and the Indonesian procedure was executing well, and is getting a back
seat now for the reason that of the huge quantity of instances.

“But
capacities have appear down there considerably for all the airways, so the
leanness and the nimbleness – wherever I could under no circumstances see myself remaining quantity one particular,
I have a shot now. It is like, all bets off. It is like, we’re again in the ring,”
he reported in the CAPA interview.

Whilst he
admits that matters are rough economically, and however messy with the new Delta
variant about, “we’ll appear back
stronger. In a nutshell, Malaysia and Thailand glance the strongest, Philippine
subsequent, and Indonesia is the weakest. But there’s a silver lining there that we
might be ready to mature faster later on.”

Contacting it “amazing
we’re however alive immediately after 16 months”, he stated just one of the most significant lesson
from this is, “you could be spending anyone 19 decades, you could have developed their
small business from 200,000 to 19 million, and they’ve built so a lot funds from us, but
they ignore that in one particular week when you overlook a payment”.

He included, “I will not
forget the fellas who have addressed us badly, just after we have addressed them so well and
on the other facet, I will not overlook the guys who have dealt with us excellent. We’re
a very psychological airline, and we try to remember our buddies, and we will undoubtedly go
deep on this.”

And keeping his sights firmly on the fantastic information, he stated
it was outstanding most airlines are nevertheless alive, such as all lower expense
carriers in South-east Asia.

The second piece of superior news – “every solitary man or woman I see is declaring, ‘I just can’t hold out to get on a plane’.” I’ve in no way experienced that just before.”

• All images credit score: AirAsia