Teleport-ing AirAsia out of Covid-19

At a time when most airlines are grounded, AirAsia is focussing on getting its ancillary and non-airline businesses to grow beyond bringing 23% revenue. Its logistics arm, Teleport, leads the charge

Almost a quarter of AirAsia Group’s annual revenue for 2019 came from its ancillary and non-airline businesses

Its logistics arm Teleport, which is profitable, pivoted to drive last-mile delivery when the airline went into temporary hibernation

However, AirAsia’s long-haul unit, AirAsia X continues to be a drag to its overall business while the budget airline is in talks for a government loan

The coming months will not be easy, as airlines will have to adhere to physical distancing and reduce their passenger load, thus driving up flight price

When you think AirAsia, what do you think of? Airlines, obviously. And yet, a sizable chunk of the Malaysia-headquartered budget carrier AirAsia Group’s revenue—23%—comes from ancillary and non-airline businesses.

In fact, the revenue from its non-airline businesses is up 189% year-on-year (YoY), contributing RM697 million (US$161.7 million) to AirAsia’s annual revenue of RM12.4 billion (US$2.9 billion) for 2019.

What are these businesses, you ask?

Payments arm BigPay: revenue up 277% to RM16 million (US$3.7 million)
Ticket selling platform AirAsia.com: revenue up 238% to RM27 million (US$6.2 million)
Logistics arm Teleport: revenue grew 132% to RM481 million (US$111.2 million)

The company expects its non-airline revenue share to go up from 23% to 60% in five years five years New Straits Times AirAsia sees non-airline segment as top earner Read more , according to Aireen Omar, president of AirAsia’s digital arm RedBeat Ventures.

AUTHOR

Ka Kay Lum

Based in Kuala Lumpur, Ka Kay covers investment activities, aka following the money, across Southeast Asia and in-depth stories on the often-overlooked Malaysian startup ecosystem. She was previously a regional writer for Nikkei-owned DealStreetAsia.

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