AirAsia Group changes name to “Capital A”
Malaysia’s AirAsia Group announced on January 28 that it had changed its corporate name to “Capital A” at the beginning of the year to reflect its broadening business portfolio as a “one-stop digital travel and lifestyle services group.”
Group CEO Tony Fernandes said the Covid-19 pandemic and its devastating impact on the air travel industry brought about the necessity to diversify the company beyond its core budget airline operations. He, however, noted that the airline division would retain the AirAsia brand, which is well established in the region.
But the group will focus more on expanding other businesses including logistics, aircraft engineering, venture capital, education and mobile applications for payments, travel and lifestyle, including food delivery, online shopping and ride hailing, with the target that the non-airline businesses contributes half of group’s revenue by 2026 so that it is not solely reliant on airfares alone, Fernandes said.
Heavy investments in new group divisions
Capital A has been investing heavily in its payments business BigPay, its logistics arm Teleport and its mobile “Super App” to increase other sources of revenue, though they remain in growth phases and are not yet profitable.
Overall, the new group structure has become quite complex by now.
To stabilise its finances, which have been drained during the pandemic, Capital A is seeking to raise about one billion ringgit ($239 million) this year from investors, in addition to a fundraising of 975 million ringgit at the end of December last year, Fernandes added.
As per latest available figures, AirAsia posted a loss of 2.2 billion ringgit for the nine months ended September 2021.
Optimistic outlook for the travel business
However, Fernandes stressed that the group was confident that the budget airline business returns to its old glory soon. The carrier on January 27 reported it filled 80 per cent of seats on offer in the fourth quarter of 2021 and had the highest number of passengers since the start of the pandemic as travel rules began to gradually ease in the region.
“We can bounce back as soon as borders are [fully] open,” Fernandes said, predicting a return to normal capacity for international services by the third quarter this year.
Apart from its Malaysian arm, AirAsia currently has four affiliate airlines in Thailand, Indonesia, Philippines and India, as well as long-haul operator AirAsia X. Fernandes hinted at the possibility that AirAsia would add two more regional airlines to its group, but did not give details on the plan.
[caption id="attachment_38154" align="alignleft" width="300"] Capital A CEO Tony Fernandes[/caption] Malaysia's AirAsia Group announced on January 28 that it had changed its corporate name to “Capital A” at the beginning of the year to reflect its broadening business portfolio as a “one-stop digital travel and lifestyle services group.” Group CEO Tony Fernandes said the Covid-19 pandemic and its devastating impact on the air travel industry brought about the necessity to diversify the company beyond its core budget airline operations. He, however, noted that the airline division would retain the AirAsia brand, which is well established in the region. But the group...
Malaysia’s AirAsia Group announced on January 28 that it had changed its corporate name to “Capital A” at the beginning of the year to reflect its broadening business portfolio as a “one-stop digital travel and lifestyle services group.”
Group CEO Tony Fernandes said the Covid-19 pandemic and its devastating impact on the air travel industry brought about the necessity to diversify the company beyond its core budget airline operations. He, however, noted that the airline division would retain the AirAsia brand, which is well established in the region.
But the group will focus more on expanding other businesses including logistics, aircraft engineering, venture capital, education and mobile applications for payments, travel and lifestyle, including food delivery, online shopping and ride hailing, with the target that the non-airline businesses contributes half of group’s revenue by 2026 so that it is not solely reliant on airfares alone, Fernandes said.
Heavy investments in new group divisions
Capital A has been investing heavily in its payments business BigPay, its logistics arm Teleport and its mobile “Super App” to increase other sources of revenue, though they remain in growth phases and are not yet profitable.
Overall, the new group structure has become quite complex by now.
To stabilise its finances, which have been drained during the pandemic, Capital A is seeking to raise about one billion ringgit ($239 million) this year from investors, in addition to a fundraising of 975 million ringgit at the end of December last year, Fernandes added.
As per latest available figures, AirAsia posted a loss of 2.2 billion ringgit for the nine months ended September 2021.
Optimistic outlook for the travel business
However, Fernandes stressed that the group was confident that the budget airline business returns to its old glory soon. The carrier on January 27 reported it filled 80 per cent of seats on offer in the fourth quarter of 2021 and had the highest number of passengers since the start of the pandemic as travel rules began to gradually ease in the region.
“We can bounce back as soon as borders are [fully] open,” Fernandes said, predicting a return to normal capacity for international services by the third quarter this year.
Apart from its Malaysian arm, AirAsia currently has four affiliate airlines in Thailand, Indonesia, Philippines and India, as well as long-haul operator AirAsia X. Fernandes hinted at the possibility that AirAsia would add two more regional airlines to its group, but did not give details on the plan.
