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Tay Tian Wen · · 8 min readTony Fernandes responds to critics of his AirAsia super-app gamble
AirAsia Group CEO and founder Tony Fernandes is no stranger to controversy. Recently, he’s had to deal with a PR crisis over a leaked internal call that raised questions about AirAsia’s culture.
He’s also had to face doubters.
When he said he was going to make AirAsia into Southeast Asia’s most popular airline with just two planes and US$250,000 in 2001, many shrugged it off as a delusion. His plans to buy an English Premier football club were scoffed at. Not one to mince his words, his characterization of airline executives as people with egos the size of A380 airplanes have also earned him scorn.
Image credit: Timmy Loen
This time, it’s AirAsia’s ambitious super-app pivot that’s drawing skepticism. Fernandes, however, is confident that recent bets – acquiring Gojek’s Thailand business and a focus on digital services including ecommerce, fintech, banking, food delivery, and ride-hailing – will give him the last laugh.
A plan conceived decades ago?
Beset by rising fuel costs in 2019 and the ensuing Covid-19 pandemic, AirAsia Group marked its seventh consecutive quarter loss in Q1 this year.
Wider than expected losses in the quarter ending December 2020 also left the company little choice but to wind down its unprofitable segments. Its Japan arm filed for bankruptcy last November.
Against this pessimistic backdrop, AirAsia’s super-app pivot can be easily construed as a desperate gamble for survival. But Fernandes claims that this is all part of a thorough plan conceived decades ago.
“We were selling only air tickets for 19 years, but what we wanted eventually is for our customers to spend more time and build their lifestyles around our app,” Fernandes tells Tech in Asia. Looking beyond travel, his plan was to create a lifestyle brand that would emulate the success of British conglomerate Virgin Group.
To do that, AirAsia Digital, the company’s rebranded digital venture arm, doubled down on a few main verticals – online ticketing (AirAsia.com), cross-border logistics that spans delivery and ecommerce (Teleport), digital payments and remittances (BigPay), a loyalty program (BigLife), and a farm-to-table restaurant offering (Santan).
AirAsia.com, having evolved from online ticketing to a lifestyle platform for travel, ecommerce, and financial services, is the focus of the company’s super-app pivot.
The app will eventually include services in the health and education verticals, Fernandes adds, though he did not elaborate further.
Image credit: Timmy Loen
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AirAsia’s critics are laughing again. Tony Fernandes tells Tech in Asia why he believes they’ll be proven wrong.
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