Wednesday, September 13, 2017

Our loyalty is our low fares: AirAsia chief

Malaysian low-cost carrier AirAsia launched its new loyalty programme for frequent fliers last week – AirAsia BIG Loyalty. The overhauled points system prioritises the number of flights a passenger takes over the prices they pay for fares or the distance covered. In an interview with BusinessLine in Kuala Lumpur, AirAsia Group CEO Tony Fernandes spoke about the potential for leveraging data from its fliers and the AirAsia India’s journey so far in India. Edited excerpts:

Why did you decide to overhaul the loyalty programme?

For a low-cost carrier, I’ve always said that our loyalty is our low fares. What convinced me now is that there are always a bunch of seats you never sell, and a loyalty programme is a great way to stimulate demand for them. But what really got me going is data – I think the rich data we can get from a loyalty card is phenomenal. In the years to come, we will know exactly where you went and if you have our co-branded cards, we also know what you spent on. And then we can tailor offers to you directly. The other reason is that I think we can use our loyalty (points) as currency, just like how digital currencies are gaining acceptance. You can move from using points to buying food and extra luggage to may be one day an Uber ride.

You have a technology centre that’s coming up in Bangalore and that’s going to build digital capabilities for the whole group. What’s the vision there?

The vision is to hire from IndiGo and bankrupt their airline. (Laughs). India is one of the tech centres of the world and if you go to Silicon Valley, you will see Indians everywhere. Why try and replicate something when the best people are in Bangalore. I want us to be at the forefront of technology. I want us to be the Apple of airlines. It’s a big step forward for us to have it here, rather than have a third party developing our digital tech. We shouldn’t be constrained by geography.

Would you be open to licensing this technology to competitors?

I take a different view to competition. India is bizarre – competitors spend all their time trying to kill each other as opposed to developing their own markets. There’s a billion people in India. Look at the number of planes in India versus Europe. India should have at least 400 more planes. And if I were IndiGo or Jet, I would build my own market instead of trying to annihilate us and other airlines. I think competition is good and it makes us better. It gives consumers the ultimate choice. And I would have no problems licensing technology that we develop. We are joint venture partners with Expedia, which sells a lot of tickets for our competitors. IndiGo’s pilots have trained at our training centre. I don’t have a problem with that.

When you started in 2011, did you think you’d be much farther ahead by now?

No. When you start in a country like India, which behaves like a continent, the first challenge is to just survive. There are many huge corporations that have come to India and have then vacated. I didn’t realise the ferociousness that we would face here and the very intense competition to stop us from growing. So many things were happening behind the scenes, poison-pen letters being written. We’re up to 14 planes now. For me, just getting to double figures was great.

We’ve got a good brand. You either collapse and die or you get better. I could do a Hindi movie on AirAsia India and it would be a hit – there would have to be five movies (to cover all this), not just one.

When I started AirAsia, only six per cent of Malaysians flew. Now everybody can fly. That’s the dream in India. We’ve made some mistakes along the way, but now we’re stronger and wiser. We’re going to succeed. We’re flying to destinations that nobody is flying to. When my people tell me that Jet is emulating our destinations, I think it’s great for the people who live there, they have more choices.
13/09/17 Tanya Thomas/Business Line