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Malaysian tycoon Tony Fernandes says part of AirAsia Philippines’s growth strategy is to double its fleet of 16 aircraft and add wide-body jets to extend its network within and beyond ASEAN
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Capital A, parent of AirAsia Philippines and led by its CEO Fernandes, also plans to launch a ride-hailing service in the country that will challenge Grab’s dominance by offering a better, lower-priced service while providing jobs to about 2,000 Filipinos
AirAsia Philippines plans to double its current fleet of 16 aircraft and add wide-body planes by 2024 to propel further its reach and capacity, Tony Fernandes, chief executive of the budget carrier’s Malaysian parent, Capital A, said in a recent town hall meeting in Manila.
The 59-year-old tycoon disclosed separately in a TV interview Capital A’s intention to launch a ride-hailing company in the Philippines that will be more affordable than industry leader Grab and based on a unique business model that will benefit both its riders and drivers.
In the meeting with local Allstars, his endearing name for Air Asia employees, Fernandes said the Philippines is a key destination for the aviation group’s further expansion in the Association of Southeast Asian Nations (ASEAN) region and beyond.
The growth strategy includes refleeting the airline and strengthening its existing hubs in Cebu, Clark, and Kalibo by launching from those gateways more regional routes to Japan, Korea and China in support of service improvements as travel demand across Asia Pacific grows.
AirAsia Philippines continues to increase its manpower to support the growing demand, said Fernandes. Since January this year, the carrier added at least 318 new employees to its roster and more will be added during a two-day cabin crew recruitment day on June 8 to 9.
The Capital A CEO is confident the fleet expansions for AirAsia Aviation will push through despite anticipated worldwide shortages in aircraft supplies as airlines resurrect after idling for three years during the COVID-19 pandemic.
“We have an order book of over 400 planes. That order book starts next year with a delivery of five A321s over the next few years,” said Fernandes.
“As for the Philippines, it’s the combination of getting some leased and new aircraft,” he added.
AirAsia Philippines’ growth in the past months reflected on its load factor, which rose to 91% in May on the back of robust demand from local and regional tourists hungry for travel after being cooped up within their national borders during the contagion.
“We are back,” declared Fernandes.
“We’ve said for a long time we want to bring tourists to the Philippines, we were on our way, and then COVID came, so we will start again. This is an amazing country and deserves for the world to know about it,” he continued.
“The aviation sector has really bounced back stronger and is driven towards further growth. Leisure is very strong, which continues to drive high ticket sales. Looking at the spending attitude, people will spend first on travel before anything else. This will further stir travel demand stronger and stronger.”
Fernandes said AirAsia will introduce more international routes while maintaining a world-class service backed by the lowest fares in the market today.
On the ground, Capital A plans to introduce AirAsia Ride in the Philippines, Fernandes said. He said the service would hire full-time drivers and provide them with benefits, including insurance. He expects the new company to generate about 2,000 jobs for Filipinos over the next two to three years.
Capital A already operates AirAsia Ride, an e-hailing services company in Kuala Lumpur. Its launch in Malaysia in August 2021 was also part of Capital A’s bid to take on Grab, a dominant player in the Malaysian market.
The company had announced early on plans to roll out the e-hailing services in Southeast Asia, particularly in Thailand, Indonesia, Singapore, and the Philippines.
“Malaysia is the first step. Thailand will be next and then into Indonesia, the Philippines, Singapore, etc. There will be two rollouts. One in Malaysia and the ASEAN rollout. The response from drivers has been tremendous,” Fernandes said during the launch of AirAsia Ride.
Capital A is formerly the AirAsia Group. It changed its name to reflect the group’s new core business strategy as an investment holding company with a portfolio of synergistic travel and lifestyle business.
The group closed Q1 2023 with revenue of RM2.5 billion, or US$546 million. Today, it has 157 aircraft back in the air, serving 165 destinations in 25 countries. The group’s air logistics provider made a total of 5.7 million deliveries in the first quarter while its Superapp’s active users grew to 12.9 million.
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