AirAsia’s super app roadmap sets up ride-hailing battle for Bangkok

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Hello reader,

No one can accuse AirAsia of not going full throttle to achieve its super-app dreams in Southeast Asia. Since rebranding earlier this year to Capital A (CAPI, KLSE) to reflect its ambition to grow beyond its core budget airline, the firm has built a super app that offers at least 16 different products, including ticketing and ecommerce.

While the firm’s super app-related efforts in the region are laudable, the cost of such rapid expansion must be weighed against its precarious financial position. AirAsia’s balance sheet took a major beating during the Covid-19 pandemic – when the budget carrier had to ground 96% of its fleet.

Its strained finances led to Malaysia’s stock exchange classifying the firm as a Practice Note 17 (PN17) company – one that is financially distressed. While Tony Fernandes, Capital A’s CEO, has been quick to sweep that detail under the carpet, the issue continues to be a nagging thorn in the company’s side.

Capital A is attempting to ease the pressure on its balance sheet – especially its cash position – by raising funds through various sources, including potentially listing its low-cost airline business AirAsia and its super app in the US next year. However, its funding drive has hit several roadblocks as sketched out in this Tech in Asia premium story.

All that makes AirAsia’s super-app quest in Southeast Asia a tantalizing one. The company needs to strike a fine balance between its far-from-ideal financial state and its skyrocketing ambition.

While it’s hard to keep track of all the businesses the Malaysia-based firm is launching in various Southeast Asian markets, today’s edition of the Opening Bell will focus on its ride-hailing business, AirAsia Rides, in Thailand – more specifically, in Bangkok.

Given its financial struggles, Capital A’s move to make inroads into a saturated market is a bit of a head scratcher. But that’s where my colleague Xavier steps in, highlighting how AirAsia has built on Gojek’s Thailand operations – which it acquired last year – to battle incumbent players like Grab (GRAB, NDAQ) in Bangkok.

Further, the featured story also brings to the fore AirAsia’s “drivers keep 100% of fares” policy in Thailand and the advantage that the firm has in servicing tourists through its super app, offering an end-to-end travel services for customers, from hotels and flights booking to itinerary planning, and now, airport transfers.

— Shravanth

THE BIG STORY

Image credit: Timmy Loen

AirAsia Rides builds on Gojek’s operations to battle Grab in Bangkok
AirAsia Rides is hoping its acquisition of Gojek’s ride-hailing operations in Thailand will help it establish a beachhead in Bangkok.

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