Malaysia-based budget airline AirAsia’s transformation into a data and tech-driven travel and lifestyle group has been recognized as one of three ASEAN unicorns based in Malaysia by a recent Credit Suisse report alongside used-car platform Carsome and Axiata’s telecommunications infrastructure unit Edotco.

The report highlighted how the digital economy benefited from structural and behavioral changes due to COVID-19, which accelerated the pace of digitalization.

“This sends a strong message to the industry that our strategy to become more than just an airline in the digital era is not only on the right track but allows AirAsia to make a name for itself as a key player in the e-commerce and delivery space in ASEAN,” AirAsia Group CEO Tony Fernandes said in a statement. “With a valuation of over $1 billion, our digital businesses have achieved Unicorn status in record time of under two years since we accelerated the growth momentum of our non-airline verticals during the downturn in flying caused by the pandemic.”

AirAsia Digital is valued at around $1 billion based on all-share transactions in July 2021, as reported by the company, Credit Suisse said in the report dated Oct 5.

“AirAsia should no longer be known as just an airline. We are now a digital services group. While our roots are in the airline industry, we have become so much more, creating our own super app with over 15 different travel and lifestyle offerings all leveraging off one another, as well as our fast-growing EduTech arm, AirAsia Academy. We also have a fantastic cargo and logistics arm called Teleport as well as a financial services business in BigPay delivering robust FinTech solutions, on track to becoming ASEAN’s first virtual bank,” Fernandes added.

BigPay announced in August that it has finalized up to $100 million in financing from South Korean conglomerate SK Group.

“Our major transformation journey began over two years ago before Covid hit when I realized we have huge assets in our brand, our data, and our people. If the pandemic has done anything positive, it has helped us to fast-track our transformation plans and the opportunity is huge, with over 700 million people in Southeast Asia and one of the fastest-growing digital populations,” Fernandes said.

Over the past few months when most of the group’s aircraft were grounded due to travel restrictions, AirAsia has been actively building its AirAsia Super App and digital businesses. The group has launched e-hailing service, AirAsia Ride in August. In the same month, its logistics arm Teleport has acquired the food delivery platform Delivereat as it expands its food delivery business.

AirAsia Super App (Photo credit: AirAsia)

In July, the group announced it intends to acquire Gojek’s Thai operations in a share swap deal. AirAsia’s FinTech unit BigPay has also formed a consortium and submitted its application for a digital banking license to the country’s central bank Bank Negara Malaysia.

“Essentially we are now a delivery company, connecting people with people, connecting destinations and delivering packages, FinTech products, and even online education. Our aim is to become the most popular, profitable, and lowest cost digital distribution company in Southeast Asia,” Fernandes said.

“To support our rapid expansion we have transformed into an investment holding company with a portfolio of synergistic travel and lifestyle businesses, including AirAsia Aviation Ltd, Asia Digital Engineering, Santan Restaurant, Ground Team Red our ground handling venture, airasia Super App, Teleport our logistics business and Bigpay fintech,” he added.

“What gives me great confidence in our strategy is the fact that we don’t have to invest billions of dollars to invent something from scratch that’s already tried and tested by incumbents and knowing my team can deliver industry-leading services at lower cost,” he said.

In an interview in July, Fernandes also said the group is considering a listing of its digital arm AirAsia Digital via a special-purpose acquisition company (SPAC) in the United States to raise at least $300 million.

Last week, AirAsia said it has secured the approval for a club facility of up to 500 million ringgit ($119.85 million) under the Malaysia government’s Danajamin Prihatin Guarantee Scheme, which is part of the government’s economic stimulus package following the COVID-19 pandemic outbreak.

Malaysia’s AirAsia launches e-hailing services; eyes more acquisitions as it builds Super App

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