Sunday, 20 June 2021 | 22:04 WIB

AirAsia Targets Bigger Profits from e-Commerce Segment

CEO AirAsia, Tony Fernandes

KUALA LUMPUR, NETRALNEWS.COM -  AirAsia's low-cost airline targets a larger profit from its e-commerce segment. AirAsia’s CEO Tony Fernandes said he wants to switch the company's revenue model from just selling tickets to entering the world of e-commerce. With an ample supply of customer data, AirAsia wants to conduct a new e-commerce operation around duty free sales.

"So when you book your tickets online, we'll offer you the opportunity to buy duty-free goods, and you can pick them up on the plane or at the airport. This gives our customers more time to see what they want to buy. From this potential, we can develop an online store for merchants that want to sell their products on our site," said Fernandes, in Kuala Lumpur, Saturday (11/18/2017).

According to Fernandes, the average passenger has an hour to hour and a half to shop at the airport. With an online store, AirAsia passengers can shop 365 days a year with personalized recommendations.

Furthermore, Fernandes wants to use a fleet of airlines to transport purchased goods to destinations across Asia, thus creating a logistics business.

"If you look at Amazon, they start with good websites and distribution, now they buy airplanes," Fernandes said. "We have planes, and we will go the other way (creating a good website and distribution)," he said as reported by Business Insider.

Of course, the e-commerce revolution of AirAsia will not take off without enriching the fleet with high-speed Wifi, a process that is currently under way. This is an element of passenger experience that Fernandes recognizes does not yet exist in the AirAsia fleet.

Switching from Cash to Non-cash

Currently, cabin crew on AirAsia aircrafts perform several different tasks during the flight, including as salespeople. However, due to the nature of the AirAsia network that reaches the whole of Southeast Asia, cash is a major issue. That's why Fernandes is excited to jump into the financial technology business (fintech).

"We are very excited about the fintech revolution," Fernandes said. "We hate cash, because cash is a headache for our cabin crew, the foreign exchange is a mess to sort out, and there is a chance to cheat here and it tempts my crew to do things they should not do.”

Therefore, AirAsia launched a new payment platform called BigPay that will allow airline customers to purchase products through their smartphones. According to Fernandes, the platform is built with a focus on group travel, which means it will allow a passenger to share bills and transfer money with other passengers in his group.

Initially, BigPay will also be available with prepaid cards, but Fernandes and his team are working to make it more focused on applications using QR codes and near field communications.

Foregin Exchange Feature

"We think our customers are cheated by banks. If you travel to Bali [Indonesia] from Da Nang, Vietnam and want to swap your Dong Vietnam with Rupiah, we will facilitate it for you at a much lower price," Fernandes said.

BigPay currently caters to ten foreign currencies, but Fernandes wants to add the foreign currency to 14.

Ultimately, the AirAsia boss believes that BigPay will be able to expand beyond the aviation ecosystem and become a mainstream retailer.