A recent Credit Suisse report reveals that AirAsia’s digital business, AirAsia Digital, is now one of three ASEAN unicorns based in Malaysia – the other two are e-commerce platform Carsome and telco infrastructure services company edotco.
According to the report, AirAsia Digital has leveraged internally generated funds to grow its business. When the company raised new capital recently, it allocated 17% of the total funds raised into AirAsia Digital, hoping to monetize its digital assets in the long run.
Two years ago, AirAsia, Malaysia’s biggest airline, embarked on a massive transformation in its non-airline verticals. CEO Tony Fernandes realized his company had significant assets in its brand, data, and people and decided to fast-track the transformation.
Today, AirAsia has its own super app with various travel and lifestyle offerings, an edutech arm called AirAsia Academy, logistics services through its Teleport platform, and a stake in fintech BigPay, which is set to become Southeast Asia’s first virtual bank.
“This sends a strong message to the industry that our strategy to become more than just an airline in the digital era is not only on the right track, but allows AirAsia to make a name for itself as a key player in the e-commerce and delivery space in ASEAN. With a valuation of over USD 1 billion, our digital businesses have achieved Unicorn status in record time,” Fernandes said in a press release.
AirAsia launched AirAsia Digital in September 2020, after rebranding its previous digital venture arm RedBeat Ventures which was founded in 2018. During the launch, AirAsia Digital revealed its three core pillars: Venture Builder for incubating and growing strategic businesses; RedBeat Academy for training digital experts; and Data Centre for data consultancy services.
“From the outset, we have always been a digital company. We were the first in ASEAN to sell airline tickets online and handle digital payments for many millions of first time online users 20 years ago,” Fernandes added.
In August of this year, Fernandes also mentioned the possibility of separating his airline business from AirAsia Digital, especially as the stock market is not giving them value for their digital products. According to him, AirAsia Group is a tech-driven company with a strong brand, and the split will be inevitable at some point.
Fernandes also announced that they are set to reveal new innovations and partnerships that will disrupt business, the way they revolutionised the region’s airline industry 20 years ago.
“What sets us apart from our competitors in the digital arena is quality, know-your-customer data built up over 20 years, a great brand that people love coupled with exceptional customer experience and great rewards,” Fernandes said.