For AirAsia, the sky’s the limit with Cloud technology

by michelle tam

LONDON: AirAsia is known to be an early adopter of new digital technologies since its inception in 2001, but what lies ahead could be its most ambitious journey yet. 

As part of its transformation into a travel technology company, AirAsia is working with Google Cloud to integrate machine learning and artificial intelligence into every aspect of its business and culture. 

Speaking at the Google Cloud Next London ‘18 event here on Oct 10, AirAsia Group chief executive officer Tan Sri Tony Fernandes said they always try to stay ahead of the game.  

“What we’re seeing now is the chance to reinvent ourselves,” he said crediting Google with providing the tools to enact such change.  

According to Fernandes, G Suite – which is Google’s brand of cloud computing, productivity and collaboration tools, software and products – got them to really focus on a whole collaborative methodology within AirAsia, keeping them nimble.  

Yet, the airline business has actually been “incredibly difficult” over the last 17 years.  

“However good you are, you are still constrained by oil prices and what (US President) Donald Trump says, or what happens on a macro scale that affects your business,” he mused.  

Thus, Google and the “whole data revolution” has enabled AirAsia to rethink its work completely instead of merely remaining an aviation giant.  

“If you look at these huge digital unicorns, many of them are now worth multiple (times) what AirAsia is worth. They’ve got their customers but they’re aggressively discounting, giving things for free,” Fernandes pointed out. 

This got him thinking about the mountain of data AirAsia had accumulated over the last 17 years, with 30 million unique visitors going to their site every month.  

“I thought, while other companies are building their database, we’ve actually got a huge database right there. How do we monetise that?” he said.  

Thus, AirAsia created an all-new digital company led by AirAsia deputy group CEO (digital, transformation and corporate services) Aireen Omar, called RedBeat Ventures, where all the data from their airlines will be used to build new digital businesses.  

“We’ll build new platforms that will enable us to sell not just airflight tickets, but using the data, we will build a lot of subsidiary businesses around it, to monetise this huge database, so we’re not just reliant on the airline business,” said Fernandes.  

When asked why he went with Google instead of Microsoft for cloud services, he said it came down to one major thing apart from gut feel: their relationship with the people in the company.  

“We were courted very aggressively by both… We felt Google is more hungry in terms of wanting to work with us,” he said. 

Asked if ticket prices will go down as a result of this move, Fernandes said that AirAsia is a volume-driven company.  

“We want ticket prices to remain low. We’re trying to find other ways to reduce cost, and that’s using our platform to drive more income into it. We will try and do our best - we’re not trying to drive fares up, that’s not the idea,” he clarified.  

Will loan products be offered?  

“In South-East Asia, the entrepreneurs have to drive the economy forward. In the West, a big advantage is that capital is there. Generally (in South-East Asia), the family system puts money together. That’s not enough to grow. I believe that’s something we should do as a civic responsibility,” he said, expressing support for the idea. 

And while he’s CEO, Fernandes will want to know who “burns toast” on an airplane.  

While AirAsia will use the cloud and IoT for everything from sentiment analysis to determining where to park planes to better serve its customers, it will also enable them to keep an eye on the lesser-known day-to-day details of keeping an airline running smoothly.  

For instance, they can now know which crew turns the oven to maximum and blows the filament out quickest.  

“When one of these ovens break, it’s US$40,000 (RM166,388) to replace!” said Fernandes, laughing.  

As to whether AirAsia is daunted by Alipay, Traveloka or Grab when it comes to building a strong positioning in the areas it has set its sights on, it was a firm ‘No’ from Fernandes. 

“We have one advantage over them in that we have data that’s coming in everyday. It’s not a zero sum game. It’s not about one person owning all that travel space.  

“We have inherited advantages, and competition exists everywhere. The key is implementation and having the right people and the right vision,” he concluded.

Related story:
AirAsia to become a travel technology company

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AirAsia; Tony Fernandes


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