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A test bed for airline subscription model

Tan KW
Publish date: Fri, 26 Apr 2024, 08:24 AM
Tan KW
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KUALA LUMPUR: AirAsia Move, a digital venture by Capital A Bhd, did not set a target on the take up for its newly-launched Asean Explorer Pass as this serves as a testing ground for airlines offering a subscription model.

“One major hiccup that is going to come, 99% of people will say (this is a) con job. (They will say) ‘I tried to book a flight to Bangkok and couldn’t get it (seat)’. That is not the intention of this product,” Capital A chief executive officer Tan Sri Tony Fernandes, who is also executive chairman of Move Digital said.

“People should see this as ‘if I want it, I should get it’. All I am saying is that if you want to travel, you will travel, although it may not be your first choice of travel (destination).

“Ironically, you will be surprised that the choice you have never thought of becomes your favourite place,” he told reporters after the launch of the Asean Explorer Pass yesterday.

The Asean Explorer Pass is an annual travel pass which allows subscribers to explore the Asean region through AirAsia’s international and domestic flight network, enjoy hotel discounts as well as connectivity on-ground through AirAsia Ride for a full year from the date of subscription.

Between April 25 and 30, the Asean Explorer Pass is on an early-bird promo price of RM999. After April 30, the pass will return to its original price of RM1,188.

The catch is that subscribers of this pass may not get to fly to their first choice of destination due to limited seat availability and that it only covers the base fare of the airline ticket.

This means subscribers will still have to top up a little more to pay for optional add-ons, airport charges, taxes and regulatory fees, or any other charges, when booking to fly with this unlimited pass.

Fernandes’ reservations on the take up of the Asean Explorer Pass is understandable, given the not-so-positive responses on Airasia’s previous unlimited passes, the first being in 2015.

At that time, those who bought these passes found it challenging to secure seats and could only pick limited dates due to the blackout dates.

That said, he shared that data from the previous travel pass sold by AirAsia Move in December 2022 saw over 80,000 international flights redeemed and flown in a year.

However, Fernandes believes the success of this latest product boils down to two things.

“Firstly, I am a big believer in subscription products. It encourages you to do more and get ancillary income. This is the test bed of ‘Is the future of AirAsia only subscriptions where you don’t have to buy an airline ticket, you just subscribe?’. I really don’t know and this is the first start.

“The second start is we are always looking for new ways to be different, trying new products and encouraging travel. Sixty percent of our destinations were not done by anyone before. We were the first guys to do it. We will continue to explore and disrupt,” he added.

Meanwhile, AirAsia Move CEO Nadia Omer said there are currently 15 million monthly active users of its app, which offers online travel agency services such as flight bookings from over 700 airlines and 900,000 hotels worldwide plus ride-hailing, dining experiences, insurance and more, underpinned by a loyalty programme.

Complementing AirAsia MOVE is BigPay, Capital A’s digital payment platform, which has streamlined financial transactions for travellers.

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