AirAsia Group Bhd CEO Tan Sri Dr Tony Fernandes is hatching out a plan that would reinvent the airline business into one that is less susceptible to oil prices.
Fernandes said he is looking at the next stage of growth for the company by monetising its underutilised assets to make the business less affected by oil prices and other external factors.
He said AirAsia has grown into a digital entrepreneur company by leveraging three platforms under its portfolio — airasia.com, the e-wallet BigPay and a logistic arm unit Teleport Commerce Malaysia Sdn Bhd.
AirAsia’s Teleport, which is a rebranded RedCargo Logistics, has co-invested with venture capital firm Gobi Partners US$10.6 million (RM43.5 million) in a logistic services aggregator EasyParcel.
“I am doing this because I think we have a lot of underutilised assets such as belly space and data,” Fernandes said after unveiling the investment in EasyParcel in Kuala Lumpur yesterday.
Teleport and Gobi Partners are now major shareholders and board members of EasyParcel following the investment.
Fernandes said the airline business is in a better position now compared to 18 years ago when AirAsia was established.
He said there is a new reality in today’s competitive landscape as governments are reluctant to subsidise airlines.
Higher interests in low-cost terminals and operations of airports are being de-monopolised across the region.
He added that AirAsia is extending the journey to make customers spend more on its ancillary businesses including hotel bookings, insurance, food and beverages, and a few others, while keeping fares low.
“My dream would be to have less of our earnings subject to fuel prices, the ringgit (foreign exchange fluctuations) or other factors beyond our control,” he said.
For the logistics business, Fernandes said the airline has about 50% to 60% belly space for cargo in an airplane, while 40% to 50% are for passengers’ bags.
Of the 60% available belly space for cargo, AirAsia currently utilises only 15%. Teleport CEO Pete Chareonwongsak said the company is expected to increase cargo space utilisation by 5% within a year.
Teleport is using AirAsia’s 272 planes and wide networks to transport goods across Asean.
EasyParcel registered some eight million parcels last year for more than 500,000 users of the platform, mainly small and medium enterprises and individuals.
Chareonwongsak said Teleport is expected to double its revenue from RM400 million to RM800 million in the next 12 months.
Teleport has contributed about 4% to AirAsia’s topline, which stands between RM10 billion and RM12 billion.