Wanting to be ‘best delivery guy’, Fernandes says AirAsia set to venture into ride-hailing

AirAsia co-founder and group CEO Tan Sri Tony Fernandes that in the midst of the pandemic, AirAsia has accelerated its pivot to the digital space in the past year revealing that the main thrust of the group's digital transformation is logistics. — Picture by Firdaus Latif
AirAsia co-founder and group CEO Tan Sri Tony Fernandes that in the midst of the pandemic, AirAsia has accelerated its pivot to the digital space in the past year revealing that the main thrust of the group's digital transformation is logistics. — Picture by Firdaus Latif

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KUALA LUMPUR, March 27 ― AirAsia co-founder and group CEO Tan Sri Tony Fernandes today revealed that the low-cost airline would be venturing into the ride-hailing market next, after dipping its toes into the food delivery service since the start of the Covid-19 pandemic.

In an interview with The Edge, Fernandes explained that in the midst of the pandemic, AirAsia has accelerated its pivot to the digital space in the past year revealing that the main thrust of the group's digital transformation is logistics.

In the interview, he confirmed the rumours of the move, but denied to comment on when it would be launched.

Fernandes said he is unfazed by ride-hailing giants like Grab and does not think it is too late to jump into the ride hailing bandwagon.

“We didn’t launch our ride hailing service at the beginning of Covid-19, we launched it at the end. The market wants competition. When we bought AirAsia with two planes, Malaysia Airlines had a 98 per cent market share or maybe more,” he was quoted saying.

Fernandes added that there is an advantage in combining airlines with ride hailing services as those who have flights with AirAsia would book the flight first without booking anything else, like a taxi.

He also shared that the cost of entry into the market is also low, as he wouldn’t be the first to enter the market.

“It’s the same when I started AirAsia. I wasn’t the first to start a low-cost airline. Ryanair and Southwest airline did it too. I learned from these,” he reportedly said.

“I’ve got eight years of Grab doing it to learn from. I don’t have to waste all that money, with experimentation, building technology, training drivers and training the market how to order..they have done it all for me.

“The ride-hailing model has been built. Everyone in Malaysia knows how to use it,” he added.

He also noted that he wants to be “the best delivery guy in town” rather than just delivering food, in reference to its current AirAsia Food service.

“Do I really want to be the best food delivery guy in town? No, I want to be THE best delivery guy in town.

“The main thrust of this digital transformation is logistics. That’s what I’m really after..and no super app can do what we do, because we have 245 planes,” Fernandes reportedly said.

Fernandes added that the airline plans to raise more capital to fund its digital ventures and that he has investors who have expressed interest in participating.

He also added that he wants to break into logistics by having “direct connectivity”, with them leasing its first Boeing 737 freighter to undertake its logistics business.

“But the air cargo business goes through 10 different middlemen. Same as what airlines do ― there are so many travel agents in between. We have to take those middle guys out.

“And why am I going into the last mile? I’m trying to be everything. But I have something even Amazon doesn’t have, but which they are building now ― planes. And that is the prize. The reason why we are starting our own e-hailing and food delivery service is to enable us to build an infrastructure where we can offer the cheapest delivery,” he said.

Grab is currently the market leader, with the entry of Indonesia-based Gojek now scrapped. Besides it, there are other smaller providers like MyCar, EzCab, Dacsee, Riding Pink, and MULA.

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