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AirAsia eyes ride-hailing, delivery through super app
Low-cost carrier AirAsia wants to expand its ride-hailing and package delivery services in Indonesia through its digital unit. The company also aims to be the number one online travel agency within five years.
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alaysia-headquartered budget carrier AirAsia plans to enter Indonesia’s ride hailing and express delivery market as it moves on with its ambition for a super app to take on big tech companies in Southeast Asia.
“Given that our key market is Indonesia, we have a strong launch pipeline,” airasia Super App CEO Amanda Woo told reporters during an online press briefing on Thursday. “We are in discussions with key players in the market on collaboration.”
She went on to say that collaboration rather than competition with other super apps, namely Indonesia-based Gojek and Singapore-based Grab, was the plan as AirAsia focuses on speed to enter the market.
In July, AirAsia acquired Gojek’s Thai business in a stock swap that left Gojek with a 4.76 percent stake in airasia Super App. The Malaysian company now operates Gojek’s ride-hailing and fintech arms in Thailand.
Read also: Gojek exits Thai market, sells business to AirAsia
The airline company recently launched its ride-hailing service, airasia Ride in Malaysia and food delivery service airasia Food in Malaysia and Singapore. Meanwhile, airasia Super App’s entry to Indonesia began in April when the company opened a beauty e-commerce platform.
The airasia Super App plans to offer ride hailing, food delivery, flight and hotel booking, grocery shopping as well as education technology (edutech) and health technology (health tech) services, among others.
AirAsia will need to compete with household names in each segment, such as Indonesia’s online travel agency (OTA) Traveloka, which is reimagining itself as a “lifestyle app” offering payments, food delivery and other services.
The Malaysian company will face competition from Gojek and Grab in ride-hailing and food delivery, as well as from upcoming super app Shopee, which has been strengthening its hold on the food delivery, e-commerce and e-wallet market.
Its ambition to become a super app dated back to 2018, AirAsia Group CEO Tony Fernandes said last year. He denied that the company was moving away from the aviation industry, which was severely hit by the COVID-19 pandemic.
Read also: AirAsia pivots to digital business with super pp, aims to capture ASEAN market
The low-cost airline booked losses for nine consecutive quarters, with a net loss of 24.6 billion ringgit (US$5.9 billion) in the second quarter of this year. Despite the dismal performance, AirAsia pursued its super app dream with confidence.
“Travel continues to be our core,” Woo said. “In the next five years, we will potentially become the number one OTA in Asia.”
She went on to say that the company also projected double-digit growth in its super app revenue contribution, but that travel continued to account for the biggest contribution at around 80 percent. AirAsia eyes a 30 percent market share in the region.
Woo said AirAsia was ready to welcome travelers as travel would return to pre-pandemic level with governments around the globe starting to lift travel restrictions. AirAsia has partnered with more than 700 international airline brands flying to over 3,000 destinations across Europe, Oceania, Africa, the Middle East and the Americas.
