How Asia’s leading low-cost carrier went from zero to digital hero

IN the age of digital transformation, companies either hop onto the latest technology bandwagon willingly or are forced to adopt modern approaches because of customer demands and competitive market forces.

But Malaysia’s low-cost airline AirAsia was born with a desire to be digital-first — even though it wasn’t a digital native to begin with.

AirAsia’s coming-of-age story is a well-documented one and a real-life case of having champagne tastes on a beer-bottle budget.

In 2001, former Warner Music executive Tony Fernandes – now AirAsia Group CEO – made the ultimate business leap. He mortgaged his house, convinced a group of investors to buy an ailing airline for a quarter of a US dollar and set out to relaunch it as Asia’s first budget carrier.

Backed by a childhood dream to own an airline and zero experience in the aviation world, Fernandes proved his naysayers wrong. Today, AirAsia has smashed numerous firsts to hold the crown as the world’s best low-cost airline, winning the prestigious Skytrax title every single year in the past decade.

SEE ALSO: No surprises, Asia’s favourite low-cost carrier has done it again

The carrier’s success can largely be attributed to the internet revolution. But more than that, it was a mix of foresight, stubborn determination and a culture of innovation that Fernandes made sure to embed within the company from the get-go.

AirAsia Group CEO Tony Fernandes (left) is pictured here holding up the historic RM1 receipt from his purchase of the airline in 2001. Source: AirAsia.

The company’s digital vision first took flight in 2002 when Fernandes realized the firm’s distributions channels had to be optimised if the airline was to make flying easier for the masses.

As a result, AirAsia went completely ticketless and rolled out online booking through its website. Subsequently, it became the world’s first airline to offer SMS and mobile web booking services — allowing customers to move away from traditional ticketing and travel agents.

“We were one of the first companies – not just as an airline – but one of the first to embrace e-commerce in a big way, and we fostered a culture of booking tickets via the website,” AirAsia Deputy Group CEO Aireen Omar said in an exclusive interview with Tech Wire Asia.

“That was key,” she added. “It has set the tone for everything else we have done since, and what we are doing today.”

Aireen oversees the group’s digital transformation and corporate services.

SEE ALSO: These are the best airlines in the Asia Pacific

Since then, AirAsia has continued to innovate and transform its operations, raising the bar every step of the way. And it has done so with a clear focus on optimising cost, without negatively affecting customer experience.

In 2014, it became first Malaysian airline to introduce Wi-FI services onboard its flights. The roKKi powered Wi-Fi system was developed by AirAsia’s subsidiary Tune Box.

“At AirAsia, innovation is key, not just in the products and services that we provide, but also in the experiences that we create for our guests. It is important to keep up with the needs of our guests and maintain relevance with all of them,” Aireen said then.

Earlier this year, the airline integrated facial recognition technology via F.A.C.E.S. – Fast Airport Clearance Experience System – in an effort to make the traveling process more frictionless.

“It (F.A.C.E.S.) would not only make it easy for passengers in their travels but also helps us manage the volume (of passengers) that we see at our airports. We see about 10 percent growth in volume every year, and the airports get congested easily,” Aireen explained.

SEE ALSO: Air Asia X named cheapest international airline in the world

Through all its digital initiatives, the company has generated what it considers its biggest asset – a significant amount of data – from all aspects of its operations, from customer behaviour patterns to aircraft engine data.

To help manage and gain valuable business insight from its data, the company recently partnered with Google Cloud to integrate machine learning and AI.

Aireen is confident that partnering with Google will allow AirAsia to deliver on its ultimate objective: becoming a “travel technology company”.

The airline hopes to evolve into a one-stop, complete, e-commerce platform that provides a seamless travel experience to its customers.

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