It's AirAsia versus everyone in Indonesia’s aviation dogfight

Low-cost carrier AirAsia has severed ties with a vital sales channel in Indonesia—online ticketing platforms. The circumstances that led to this hold lessons for other Southeast Asian airlines

Despite the rich potential of Southeast Asia’s aviation industry, airlines in the region are struggling with profitability

In Indonesia, the cut throat aviation space has seen national carrier Garuda and low-cost airline Lion try and push competitor AirAsia to the fringes

Garuda and Lion have made a pact to raise ticket prices, even convincing Traveloka, the nation’s largest OTA, to shun AirAsia for undercutting them on price

In response, AirAsia has gone off OTAs altogether, focusing its efforts on improving its digital capabilities instead

Sometime around February this year, Malaysian budget airline AirAsia’s flights on routes within Indonesia began vanishing sporadically from Indonesia’s largest online travel agent (OTA), Traveloka. Instead, the platform’s users had to manually check AirAsia’s website or app to see if the airline had better options.

This was no oversight or technical glitch. Or at least, that’s what AirAsia alleged. In March, the carrier, owned by eclectic Malaysian businessman Tony Fernandes, declared it would permanently withdraw all of its flights from Traveloka, Indonesia’s biggest OTA, because it felt unfairly treated by the platform.

“The exclusion of several AirAsia Indonesia flights by Traveloka is a clear display of preferential treatment and an act of favouritism,” the statement read.

AUTHOR

Nadine Freischlad

Nadine is based in Jakarta. She likes stories that capture the impact of digital transformation in Indonesia, with a special fondness for "clicks and bricks" businesses and platform economics. Previous stints with Tech In Asia, KrASIA, bylines in VICE, SCMP, CNN.

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