Air Asia to focus on ASEAN expansion, as CEO expresses cautious optimism for 2021

Air Asia’s chief executive, Tony Fernandes, says the low-cost carrier is planning to expand its presence in Southeast Asia and is in talks to form 3 new airlines. He points out that people still want to travel, and that demand makes him hopeful air travel could be back to its pre-Covid numbers within 6 – 12 months.

“At the right time we will make the announcements, but definitely our strength is Southeast Asia and that’s where most of our expansion is going to be over the next 2 to 3 years.”

Just 3 weeks ago, AirAsia Japan Co has filed for bankruptcy with the Tokyo District Court after rumours the month before the Japanese franchise would cease operations due to the weak demand caused by regional border closures and the weakness in aviation business.

But flights between Japan and destinations such as Bangkok are being operated by other AirAsia subsidiaries.

The Japanese arm of Malaysia’s AirAsia Group Bhd received a provisional administration order from the court 3 weeks ago.

“Given AirAsia Japan’s current financial position, we regret to inform that AirAsia Japan is currently unable to settle the outstanding refunds. We sincerely apologise for any inconvenience caused to customers who have used or booked AirAsia Japan flights.”

Tony Fernandes says domestic air travel in Thailand is already back to where it was prior to the pandemic* and is likely to surpass previous levels by the end of the year. He adds that Air Asia’s business as more of a medium-haul carrier than a long-haul operation, will stand it in good stead.

Meanwhile, Fernandes says Air Asia is turning a lot of its aircraft into cargo planes, while assessing its AirAsia India operation, a joint venture with the Tata Group. The carrier is also moving further into the digital sphere. Air Asia recently launched a “super app”, offering digital payment services, delivery services, and an e-commerce platform… and flights.

Fernandes says Air Asia’s digital business is already further ahead than expected, with the carrier applying for digital banking licences in a number of countries in Southeast Asia. It’s understood the company plans to roll out financial lending in Malaysia from January, and also has plans for the insurance and wealth management sectors.

*Fact check – Domestic flight demand in Thailand is currently back to around 60-70% of pre-Covid levels, not back to the same level.

SOURCE: Bangkok Post