Loyalty on the rise for AirAsia with membership growing 25% in FY2017

AirAsia has recorded a revenue of RM2.66 billion for the fourth quarter of the full financial year which ended on 31 December 2017 (FY2017). This was a 10% year-on-year increase from RM2.41 billion during the same period in 2016.

AirAsia BIG Loyalty's new membership programme also grew by 25% from 2.8 million in FY2016 to 3.5 million in FY2017. Group CEO Tony Fernandes (pictured) described passengers' data to be a "very valuable asset" and expects the number to increase exponentially as it grows its passenger numbers.

Meanwhile, the new AirAsia mobile app conversion rate for flights purchased grew from 3.39% to 5.75% in FY2017. Fernandes expects the conversion rate to increase as the group continues to improve its mobile application and further enhance its booking site.

He also said that AirAsia will be consolidating its digital businesses under RedBeat Ventures and marketing to investors as an ASEAN travel and lifestyle tech ecosystem. The group's initiatives now covers online, social media, inflight, content and on ground.

To remain relevant in the e-commerce space, AirAsia recently appointed former CEO of Pos Malaysia Datuk Mohd Shukrie Mohd Salle to head up Redbox, an end-to-end courier service.

On the corporate front, AirAsia segregated its businesses into airline transportation and digital divisions in an effort to streamline and offer better clarity and business focus across each division. According to Fernandes, AirAsia's digital businesses will continue to expand and support its airline businesses in areas such as inflight connectivity and duty free sales, as well as in e-payments and loyalty. He said:

With this new structure, we are giving our digital businesses room to grow beyond serving just AirAsia and in becoming major tech players within their own right.

Meanwhile, AirAsia's operations in Indonesia and the Philippines are attracting more interest from airline investors. The Indonesian operations recorded a net operating profit of IDR6.6 million for the fourth quarter of 2017, and a net operating profit of IDR135.7 million for the full year of 2017. The group will diversify its network in Indonesia this year by strengthening key hubs in Medan and Jakarta.

“AirAsia is optimistic about the growth potential of low-cost air travel, and the potential of our fares to stimulate and grow new markets. We look to more than double our current fleet of narrowbody aircraft, now over 200-strong, to 500 fleet by 2027,” Fernandes said.

Overall, its growth can be attributed to strong load factor (88%) and 17% increase in passengers carried to 10.44 million, as compared to the same quarter in 2017, as well as the rapid expansion of its aircraft fleet. Meanwhile, the group posted revenue of RM9.71 billion for the full financial year, and net operating profit grew by 23% to RM549.8 million compared to the same period in 2016.

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