AirAsiaGo: No waning demand from Malaysia on horizon

PETALING JAYA: Travel packages provider AirAsiaGo does not see demand from Malaysia waning despite the rising cost of living and weakened currency.
Speaking to SunBiz recently, AirAsiaGo general manager Darren Goh (pix) said its three-level saving initiatives, which include a monthly sale of 5,000 free seats and hotel offers, is key for the company in providing cost-effective offerings.
“People travel due to many reasons. We have a lot of business travellers as well. They might cut down on the number of trips a year and might change their destinations.We make sure we are available at all levels,” he said.
“(As for the) cost-effective travel segment … during good and bad times … you know you will have a steady stream of customers,” he added.
AirAsiaGo, which has been around for the last 10 years, serves about 5% of Air Asia’s total yearly passenger traffic. It is currently managed by AAE Travel Pte Ltd, a joint-venture (JV) company formed in 2011 between Air Asia Bhd and Expedia Inc.
The JV leverages on AirAsia’s flight passenger traffic and Expedia’s pool of hotels.
In 2015, AirAsia pared down its 50% stake in the JV to 25% for RM306 million, which led to Expedia emerging as the substantial shareholder of AAE Travel.
However, the change in shareholding, Goh said, has not brought about much change to the company’s operations.
“We have changed engine but the essence, team and product we offer are still there. It’s still a brand associated with AirAsia and we have strong content coming from Expedia … that is a winning formula. It is business as usual for us,” he stressed.
Currently AirAsiaGo has presence in Malaysia, Thailand, Indonesia, Singapore, Hong Kong, Australia, Japan and China, with the domestic market being the major revenue contributor.
On expansion plans, Goh said AirAsiaGo is looking to strengthen its foothold in areas where AirAsia already has a strong presence and in places where it will be able to tap into Expedia’s customer base.
The strategy, according to him, is to control the domestic routes which will in turn bolster its services for international routes.
As an online-based agency, Goh said, AirAsiaGo is eyeing to make China its main revenue contributor due to the size of the market and the online travel penetration level.
He said the level of online travel penetration in Malaysia – despite it being the main revenue contributor – is still comparatively low at 35% compared with 80% in China, which accounts for about 55% of Asia’s online travel business.
AirAsiaGo will continue to invest in technology, such as “machine learning”, an artificial intelligence device that tracks customer behaviour towards pricing.
Looking ahead, Goh said the group remains positive on its prospects and is hoping to grow faster than the industry’s 20% in terms of compound annual growth.
He added that AirAsiaGo will be able to unlock more potential in selling long-haul packages if AirAsia “fulfils its dreams” of flying to the US West Coast as well as resuming its European routes.