AirAsia: Wireless delivery system to boost business

  • Business
  • Wednesday, 24 Aug 2005

AirAsia Bhd (AirAsia) expects its latest delivery channel, – a booking system designed for access via mobile phones or wireless devices – to generate the bulk of its business in the next three years. 

“As Malaysia’s cellular penetration rate at 60% is much higher than its Internet penetration rate of 13%, AirAsia’s new delivery channel can reach out to even more customers while reducing operating cost,” chief executive officer Tony Fernandes told a press conference in Petaling Jaya yesterday. 

Science, Technology and Innovation Minister Datuk Seri Dr jamaluddin Jarjis (centre), Tony Fernandex (left) and CEO of partner, Keith Steward, answering questions on the new delivery channel on Tuesday.

Currently, the low-fare airline’s main delivery channel is its Internet booking system, which contributes 56% of its business.  

According to Fernandes, the delivery channel is accessible by customers in any location around the world and would allow AirAsia to enter markets with a low Internet penetration rate such as Cambodia.  

“We plan to expand to Cambodia soon. This country has a high cellular penetration rate, so we will be offering this service for customers there to book their flights,” he said, but added that issues such as payment methods would be considered later.  

The system currently accepts credit cards but Fernandes added that more payment methods would be developed in future.  

The company did not make a capital outlay to develop this system as it is based on an application service provider model, whereby AirAsia would pay a fee for every customer transaction.  

Fernandes said AirAsia would invest in aggressive marketing efforts to promote this new delivery channel, much like the way it had encouraged customers to use the Internet to book its flights. He said operating cost was expected to drop as the technology used to develop this service is scaleable.  

“Compared with other delivery channels like call centres, this system will not require a lot of investment to scale upwards when an increasing number of customers start accessing it,” Fernandes said, adding that such cost-saving measures were necessary to mitigate high fuel prices.  

He said oil prices were expected to increase further but the company was prepared to meet this challenge while keeping fares low by expanding its market.  

 AIRASIA :  [Stock Watch]  [News]

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