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Updated March 15th, 2021 at 18:17 IST

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

The Malaysian discount carrier AirAsia, which also co-owns AirAsia India with Tata Sons, has launched a “no-frills” food delivery service in Singapore.

Reported by: Aanchal Nigam
AirAsia
| Image:self
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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 their “super-app” strategy in order to diversify revenues especially after the unprecedented blow caused by the COVID-19 pandemic to the airline industry, AirAsia announced the move. Even though several nations have started coronavirus vaccination programme, airlines across the globe are currently struggling to stay afloat and hence, the companies are resorting to new schemes to generate revenue. 

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

Even though AirAsia is the leading domestic carrier in Malaysia, it has been severely impacted by the government’s ongoing lockdown to curb the spread of COVID-19. Locally, the coronavirus restrictions in the 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 the end of next month, the airlines will have to furlough more employees after already 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 the tough times we are facing due to the COVID-19 pandemic, AirAsia super app and AirAsia food, in particular, are making even strong headway by expanding into other countries and regions."

In the last few months, the Malaysian discount carrier managed to soften the financial blow by securing at least US$182 million of cash through a new share issuance on the stock market together with a private pavement to well-known Hong Kong businessman Stanley Choi. With the latest food-delivery scheme, AirAsia is up against German company Foodpanda that started in the 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 the air travel when measured by Revenue Passenger Kilometres (RPKs) plunged in the month of January from the staggering December levels. It also noted that air travel was 72 per cent lower than in the pre-crisis month of January 2019. The prominent setback for the airlines’ passenger business was mainly due to strict COVID-19 precautionary measures that halted travel. 

Brian Pearce, IATA’s Chief Economist had previously said in a statement, “At -72% compared to 2019, the January passenger performance is a deep concern. It is even worse than the -69% in December. The vaccine roll-out and the 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.”

 

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Published March 15th, 2021 at 18:17 IST

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