Tony Fernandes: “Can AirAsia Become The Biggest Food Delivery And Ride Hailing Company?”

Competition is tough, especially in the ride-hailing and/or mobile food delivery industry, but Tony Fernandes thinks AirAsia has a shot at becoming the top dog in both.

In a recent press conference over the past weekend, the AirAsia Group CEO expressed his typical bullish attitude toward the prospects of his company, which in 2021 had entered new territory with AirAsia Ride to compete directly with local-spawned behemoth Grab.

Going forward, with AirAsia’s acquisition of food delivery platform Delivereat, previously another homegrown effort, Fernandes reckons the expansion into two new industries is a complement to both each other and the Group’s core business with green pastures all around.

Ambitious expansion plans are also on the horizon barring some unforeseen hiccup, with the full suite of the brand’s food, delivery, and ride-hailing network entering other ASEAN markets such as Thailand, Indonesia, the Philippines, and Singapore. However, a firm timeline on this has not been detailed.

There is still much to be tackled on the home front, obviously, before such plans can be executed. Fernandes earlier announced the appointment of Delivereat’s founder Tan Suan Sear as Group Head of AirAsia Food and Leong Shir Mein as Head of On-Demand for Teleport, their delivery arm.

"When (I started) AirAsia, I always wondered if we can become the biggest airline, and we did,” the CEO told The Edge Markets, citing the airline’s growth to become the 4th largest in Asia with 90 million passengers from 200,000 passengers and 2 planes when he first took over the ailing business.

"So I sit back and think can we become the biggest food delivery company and ride-hailing company? Today, I officially say, I think we can... I think we’d go out there and (outgrow) existing competitors the same way we outgrew other airlines.”

This positive attitude has not seemed to trickle into the sentiments of AirAsia’s investors, however, as its share price continues to record a downward trend after the group was classified as Practice Note 17 (PN17) status some 18 months ago following a failure to seek an extension from its release period from Bursa Malaysia.

CGS-CIMB expects challenging times ahead for AirAsia, approximating it will require an RM7.39 billion stimulus to its shareholders' funds (on a proforma basis) by Sept 31, 2021 to be removed from PN17 classification.