AirAsia launches food-delivery services in Singapore to diversify revenue measures

Malaysian discount carrier AirAsia, which also co-owns AirAsia India with Tata Sons, has launched a “no-frills” food delivery service in Singapore. Aligning with ir “super-app” strategy in order to diversify revenues especially after unprecedented blow caused by COVID-19 pandemic to airline industry, AirAsia announced move. Even though several nations have started coronavirus vaccination programme, airlines across globe are currently struggling to stay afloat and hence, companies are resorting to new schemes to generate revenue. 

AirAsia said in a statement earlier this month, " rapidly growing food delivery platform of AirAsia super app - AirAsia food - is set to revolutionise food delivery service sector in ASEAN with its official entry into Singapore today."

Even though AirAsia is leing domestic carrier in Malaysia, it has been severely impacted by government’s ongoing lockdown to curb spre of COVID-19. Locally, coronavirus restrictions in area are called ‘Movement Control Order’ that limits travel between states. Nikkei Asia reported last week that if AirAsia is unable to open domestic air travel by end of next month, airlines will have to furlough more employees after alrey having laid off 3,000 staff members.

In a statement, Tony Fernandes, CEO AirAsia Group said, "Our expansion into Singapore is a key milestone for AirAsia super app that has been Asean’s fastest-growing e-commerce platform since it was launched last year. We are proud that despite tough times we are facing due to COVID-19 pandemic, AirAsia super app and AirAsia food, in particular, are making even strong heway by expanding into or countries and regions."

In last few months, Malaysian discount carrier managed to soften financial blow by securing at least US$182 million of cash through a new share issuance on stock market toger with a private pavement to well-known Hong Kong businessman Stanley Choi. With latest food-delivery scheme, AirAsia is up against German company Foodpanda that started in sovereign island in  March 2012, UK-based Deliveroo (launched November 2015), and Singapore-based Grabfood which began in May 2018.

Plunging revenues by air travel

In a report published on March 5, International Air Transport Association or IATA said that air travel when measured by Revenue Passenger Kilometres (RPKs) plunged in month of January from staggering December levels. It also noted that air travel was 72 per cent lower than in pre-crisis month of January 2019. prominent setback for airlines’ passenger business was mainly due to strict COVID-19 precautionary measures that halted travel. 

Brian Pearce, IATA’s Chief Economist h previously said in a statement, “At -72% compared to 2019, January passenger performance is a deep concern. It is even worse than -69% in December. vaccine roll-out and increase in testing capacity—particularly as governments show renewed interest in rapid antigen tests—is good news. But until governments ease travel restrictions a significant improvement is unlikely.”