KUALA LUMPUR: AirAsia Group Bhd is enhancing its ancillary businesses to generate more income from under-utilised assets such as aircraft belly space for cargo and logistics.
Founder and group chief executive officer Tan Sri Tony Fernandes said the low cost carrier (LCC) was revitalising its traditional airline business to reduce earnings erosion due to fluctuations of fuel prices and foreign exchange.
“We have grown over the past 18 years in Asean, China and India. We will continue our ancillary journeys by using our assets to keep more passengers flying and spending through our website AirAsia.com such as hotel bookings and free-duty shopping,” he said at a press conference after unveiling the rebranded cargo and logistics platform of AirAsia, Teleport, here today.
Fernandes said AirAsia’s earnings should also be generated from its ancillary subsidiary like the Teleport, an opportunity for the airline to be part of the social and e-commerce ecosystem.
“Today, we are unlocking that potential with the help of EasyParcel, making parcel delivery across Asean more accessible and inclusive for everyone,” he added.
Teleport and venture capital firm, Gobi Partners have invested US$10 million in e-commerce and parcel delivery player, EasyParcel.
Investment from Teleport is funded from retained earnings, while Gobi Partners makes its investment through Meranti Asean Growth Fund, which seeks to invest in Asean innovation such as cloud services, e-commerce and financial technology.
Fernandes said AirAsia currently utilises about 15 per cent of its available aircraft belly space for the cargo and logistics business.
“We aim to increase our aircraft belly space utilisation rate of about five per cent within a 12-month period to grow Teleport.
“We believe Teleport will be big as our airline business. Our synergy with EasyParcel is enormous and good way to utilise the belly space, while adding-value to our services.
“Currently, we have about 40 per cent to 50 per cent of the aircraft belly space for passengers luggages, while the remaining 50 per cent to 60 per cent available space for cargo and logistics,” he said.
Fernandes said Teleport would leverage on AirAsia’s ‘playground ’ in Asean transporting goods particularly in Singapore, Thailand and Indonesia.
Teleport chief executive officer Pete Chareonwongsak said the company aims to double its contribution to AirAsia Group from the current four per cent or RM400 million to eight per cent or RM800 million in revenue in the next 12-month.
“AirAsia has a huge network that we can leverage on including more than 100 cities, 10,000 flights per week and over one million tonne of available cargo capacity,” he said.
With over 270 aircraft fleet in AirAsia, Chareonwongsak said Teleport would have extras cargo space in each aircraft of about three tonnes and 10 tonnes in the A320 and A330, respectively.
“Teleport will transform the logistics and e-commerce ecosystem, making easier for people particularly small medium enterprises to transport goods.
“With operational expertise, the investment allows us to accelerate the accessibility of logistics for SMEs, while encouraging more collaboration with the regions logistics startup community,” he said.
Gobi Partners chairman and founding partner Thomas G Tsao said the company’s co-investment with AirAsia’s Teleport would help EasyParcel solve Southeast Asia’s logistics bottlenecks and boost the industry’s data analytics.
“As a platform, EasyParcel is uniquely positioned to streamline the customers’ full journey by integrating end-to-end logistics services with its partners.
“This generates operating efficiencies overall and creates synergies for the entire ecosystem, including our existing logistics investments, Deliveree and Zoom,” he said.
EasyParcel founder and chief executive officer Clarence Leong said the company has close to half a million users will use the Series B funding to expand its offering for SMEs customers, leveraging Teleport’s logistics and infrastructure capabilities.
“Our mission is to address last-mile delivery challenges. Since we started in 2014, we have been successfully making in-roads in Malaysia as well as Indonesia, Thailand and Singapore.
“The funding from Teleport and Gobi Partners is key to strengthening our footprint in those existing markets,” he said.
Leong said EasyParcel has targeted about 16 million parcels to deliver this year, doubling its capacity from eight million parcels delivered last year.