Making good on a promise by CEO Tony Fernandes earlier this year, AirAsia is poised to sell tickets for other airlines on its website. Fernandes confirmed the plans on Monday, with further details to come in a formal announcement next week. The effort is the latest step in the company’s efforts to grow beyond just being an airline into a digital services company that just happens to also operate planes.
The initial distribution will be handled via a consolidator service, allowing AirAsia to avoid costly GDS fees or direct links to the other airlines for delivering inventory and fare details from the other airlines to customers on the AirAsia.com site. Keeping the distribution costs down helps but may not be the part of this program Fernandes is most proud of. He’s talked about building beyond the airline to a digital services company that happens to operate flights. But the core airline operations are critical to success beyond just the branding.
It turns out that AirAsia as an airline operation helps make the customer acquisition process a profitable one, according to Fernandes:
The airline is critical to the success of the digital transformation that it leads. If you look at Uber, or Tokopedia, or Grab, they have to constantly discount to get customers and it’s become a drug. I’m getting customers from a profitable product: Our airline. And now I can monetize it in all these other ways.
Beyond this first airline partner announcement Fernandes says discussions are ongoing with “three or four” additional carriers to join the program.
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