Prioritising revenue enhancement and cost reduction. AirAsia Group Berhad (AAGB) held its Global Investor Day yesterday. The session highlighted AAGB’s growth plans for its airline and digital business comprising of revenue enhancement and cost reduction initiatives.
Solidifying the airline business. On the cost reduction front, AAGB’s older fleet will be replaced with new A320neo and A321neo sometime in 3QFY19. These aircrafts have advanced fuel efficient technology with an estimated fuel savings of 15% by FY20, translating into lower cost per seat. In addition, AAGB are leveraging on data analytics to apply predictive maintenance; ensuring efficient scheduling of parts which could lead to a potential savings of USD0.04m per aircraft in a year.
Reforming AirAsia.com as an all-in one travel and lifestyle market place. AAGB’s online platform, AirAsia.com recorded a Gross Merchandise Value (GMV) of RM16b only from the sale of flight tickets. This will be further strengthened by its dynamic fare adjustment mechanism which is able to predict the purchasing power of a visitor according to the search trend. Plans to increase its GMV to USD25m by 2025 will not include opening up AirAsia.com for other travel related businesses such as hotels and tour packages but also e-commerce, online media (subscription to music and online gaming) and ride-hailing.
BIGPay to facilitate online transactions. To complement AirAsia.com, AAGB has also introduced BigPay to enable mobile payments, cash withdrawals, pre-paid debit Mastercard and point of sales transactions for major currencies at a very competitive exchange rate. This facility is comes along with the loyalty programme, BIGLIFE which enables the purchase of ancillary items and even hotels on AirAsia.com using points. Looking ahead, BIGPay will venture into providing loans for businesses and remittance services, targeting foreigners working across ASEAN.
Source: MIDF Research - 30 Apr 2019
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