AirAsia: To really stand out in Malaysia, you need to be a risk taker

The marketing world is cluttered and every day, a new campaign emerges only to fall on deaf ears. To stand out is by no means easy, and this is no different in a market like Malaysia. In fact, according to a report by e-marketer and IAB, Malaysia’s ad market is seeing digital growing smartly, albeit from a small base.

While traditional media formats still account for the majority of ad spending in Malaysia this year, with digital ad expenditures making up less than 20% of the overall total, it will make up 19.7% of total media ad spend in 2017, and that level will grow to 25.2% by 2020. The report added that total media ad spending in the country will reach a projected US$1.30 billion in 2017.

In a conversation with A+M, Spencer Lee, head of commercial at AirAsia, said that to really create ads that resonate with audiences, staying ahead of the trend is needed. Moreover, given the rise of digital influence in a consumer’s life, technology adoption is essential.

But at the heart of it all, a brand must be in line with an audience’s interest and be bold in their execution. He said:

To really stand out in Malaysia, it all boils down to that question of, 'Are you a risk taker?'

"Being able to take risks and do things that make you uncomfortable matters because it means you are doing something new that others have not done before. Only then, can you create breakthroughs," Lee added.

Boldness is also a trait necessary for AirAsia to resonate with its target audience - the Millennials. Lee shares that Millennials are no doubt one of its target markets now, adding they are “the youngest generation with disposable income, as leaders in travel and tourism."

Meanwhile, being a brand proud of its Malaysian heritage, AirAsia has been actively pushing its ASEAN airline branding with its involvement in the 29th 2017 Southeast Asian Games (SEA Games) this year. This was one of the key marketing agendas for the airline, as the games' gold sponsor and its official airline partner. Through the SEA Games partnership, the ASEAN low-cost airline hopes to go beyond just offering affordable flights and it is taking this chance to promote Malaysia as an attractive tourist destination around the region.

"It is a good opportunity for people from around the ASEAN countries to get to know Malaysia better via SEA Games. We wish to put Malaysia tourism in a bright spot around the region," Lee added.

AirAsia has also tapped on its content marketing strategy to launch its campaign called Adventure Live! Project on 8 August 2017, in celebration of ASEAN’s 50th anniversary. It includes a series of VR360 videos featuring hundreds of VR-ready 360 scenes from all 10 ASEAN countries, across dozens of cities and key attractions. The campaign, which is a completely live and real-time interactive travel, uses Facebook Live and showcases the latest music video featuring Malaysian jazz duo Eb Duet that was shot in all ASEAN countries.

The airline said that the project is also in line with its focus, in developing the ASEAN market and building awareness around new destinations including unique routes like Luang Prabang, Sihanoukville, Nha Trang in Indochina and Bhubaneswar in India. It also promotes a sense of adventure that Millennial audiences can resonate with.

Meanwhile, earnings wise, AirAsia said its revenue for the second quarter ended 30 June 2017 totalled RM2.38 billion, up 19% from RM1.99 billion in the same quarter last year. Revenue growth was attributed to a 10% increase in total passengers carried and a strong seat load factor of 89% in 2Q2017 compared to 87% in 2Q2016. However, its net profit was reported at a lower RM140 million in 2Q2017 on-year due to a one-off tax charge of RM212 million from the group’s participation in the Indonesia Tax Amnesty Programme.

AirAsia group CEO Tan Sri Tony Fernandes said despite the tougher operating environment in the seasonally weaker second quarter of the year, the airline managed to serve more passengers and increase its load factor in almost all the markets it operated in.

Fernandes said AirAsia Group is also gearing up to expand to 500 aircrafts by 2027, which entails adding 30 new aircrafts every year for the next 10 years. "I’m confident that we can reach this target or even exceed it, especially as we set up our new associate airlines in Vietnam and China in the coming years," he added.

In the second half of 2017 alone, AirAsia plans to add a further 23 planes to the group fleet. This is expected to help solidify its position in intra-ASEAN routes and the domestic markets of Malaysia, Thailand and Philippines. 2017 will also mark the most number of aircraft that the airline has added in four years.

Amidst the current challenging operating environment and increase competition among its peers, AirAsia said it will reduce cost by streamlining group functions and adopting new technologies in areas such as predictive maintenance and inventory management. "And we are actively working with the respective ASEAN authorities to reduce landing and user charges to support low-cost carrier operations and boost investment in low-cost terminals," Fernandes added.

Meanwhile, Fernandes also announced his intention to consolidate the airline’s Southeast Asian units under one list holding company. Known as the “One AirAsia” plan, the carrier plans to unify its units in Malaysia, Indonesia, the Philippines and Thailand, as well as go public in two years’ time, according to Bernama.