Malaysia-based Capital A has partnered with Singapore-based Ant International to optimize treasury operations and enhance customer experience for its airline business, AirAsia.

The duo said in a statement on Tuesday that by leveraging Ant International’s proprietary Falcon Time-Series Transformer (TST) Model, Capital A was able to better manage AirAsia’s cash flows across multiple currencies and in turn, offer more stable, competitive pricing to its customers.

This was enabled by Falcon, which enhanced AirAsia’s foreign exchange (FX) risk management and reduced its hedging costs by up to 40 percent, allowing the airline to pass the cost savings on to customers through more competitive FX rates.

The integration also resulted in a more future-proof and scalable treasury management solution for AirAsia, with 90 percent accuracy in forecasting the company’s cashflow and FX exposure on an hourly, daily and weekly basis.

This integration marks the first industry-tailored solution that Ant International has developed from Falcon.

Following the launch in April, Ant applied the large data model to various treasury management scenarios to design solutions for specialized industries, such as airlines.

The model was trained on 2 billion parameters, including 80 million parameters of travel-related data, such as open-sourced data from OTAs and air carriers.

This enabled Ant to launch an AI FX offering catered to the airline industry.

The solution was then integrated with Capital A’s corporate banking partner’s fixed FX rate infrastructure to complete transactions for AirAsia.

Ant International estimates that in time, the enhanced solution could help the broader airline industry reduce its overall FX costs by as much as 60 percent for selected currency pairs.

“As a group, we serve over 70 million travelers yearly, 35 million AirAsia Rewards members and our fintech arm, BigPay has over 1.6 million carded users,

“Through our partnership with Ant International, we are able to reduce the hedging cost by 40 percent,” said Aireen Omar, Group Chief Executive Officer, BigPay.

According to her, this helps immensely as Capital A processes massive multicurrency volumes every day and this platform updates FX rates twice daily and provides great margin management capability.

Kelvin Li, General Manager of Platform Tech at Ant International, said the partnership with Capital A marks the first commercial deployment of Falcon, an important milestone in the firm’s journey to transform treasury and FX management for businesses.

“The results demonstrate how innovation, technology and institutional-grade execution solve real-world FX challenges and reshape cross-border payments,

“We look forward to serving more businesses and industries as we continue to build on our enterprise embedded finance solutions,” he added.

Cited a report from McKinsey , the statement highlighted that airline industry processes about 2.9 billion payment transactions annually, valued at $1 trillion.

Despite the scale of payment processing the sector is involved in, there is a lack of tailored solutions from the payments industry that enable airlines to lower its associated payment costs.

Airlines spend over $20 billion annually on payment-related expenses, accounting for 3 percent of the industry’s total revenue.

With airline travel set to continue growing to 5.2 billion passengers this year as estimated by International Air Transport Association (IATA), Capital A and Ant International recognize the need for enhanced solutions that will allow the industry to improve their FX risk management and lower costs, by leveraging AI.

Both sides will continue to explore more efficient and transparent global fund management solutions via Ant International’s Bettr treasury platform.

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