'Old-fashioned brand marketing is as important as data,' says AirAsia chief Tony Fernandes

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AirAsia has gone full steam ahead with its plans to pivot from a budget airline to a digital lifestyle company, controlling four digital companies: super app, Teleport, BigPay, and Redbeat Academy. Aiding in its expansion is also the vast amount of data that AirAsia has accumulated over 19 years.

While data is important in helping AirAsia find new ground, group CEO Tony Fernandes (pictured right) said during a recent fireside chat at MARKETING-INTERACTIVE's Digital Marketing Asia 2021 conference that "it's not just about the data, it's about [the AirAsia] brand".

"If you were to ask many of these unicorn companies what their brand is, you don't know. Do you know what AirAsia's brand is? It's about inclusivity, accessibility and affordability," he said, adding:

I do think that conventional, old-fashioned brand building and brand marketing is as important as data marketing.

If brands have the best of both worlds, they will be laughing all the way to the bank, Fernandes said, and this balance is something AirAsia is trying to achieve which also helps give the company an edge over competitors. "Data is a big, big plus, and that's our asset. We've got digital data and we've got a great brand. Those are the two things that, if you mix it up with amazing people, then we got a shot," he said. According to him, many tech companies are focused on product and data. However, with consumers and brands increasingly focusing on privacy issues, Fernandes said: "To put all your eggs into this data basket is not the greatest thing."

In an age where data has become a crucial aspect in marketing, gut feel is still equally important. Citing football as an example, Fernandes explained that many clubs are buying players based on data but gut feel is still crucial. Likewise, AirAsia was also built based on gut feel. "There is no data about flying to Bandung. But you know, it's common sense that there are three million people there and there should be a route. So it's a bit of both and I think that's where our niche is," he said.

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According to Fernandes, AirAsia is not a 100% data-driven company. In fact, he believes the company would have a great shot by combining the success that was built at AirAsia, which involved great brand-building and knowing its customers, with data. To further drive home the importance of brand marketing, Fernandes used the late Steve Jobs as an example, stating that he built a great brand with which people wanted to be associated with because it is cool. Similarly for Nike, Fernandes said consumers might not understand the technology that goes into the brand's shoes but they still want to be associated with the brand. "So I do think that's our advantage. You can't make some of these unicorn companies suddenly become a brand," he said.

Over the years, AirAsia has cemented its reputation in the low-cost carrier space, even bagging the award for Asia's Leading Low-Cost Airline at the World Travel Awards 2021 for the fifth consecutive year. It received the highest votes from consumers, travel professionals and industry players around the region. Staying true to its brand positioning of being affordable, AirAsia has also constantly launched deals and promotions for the travel and delivery verticals on its super app. Meanwhile, in October, AirAsia also encouraged consumers to "Go Away" with the airline following the resumption of interstate travel by enticing them with low fares.

"We're not premium, we will never be. We are serving the mass markets," Fernandes said, well aware of AirAsia's brand positioning. He added that ironically, many premium people book a cheap flight and spend on an expensive hotel. At the end of the day, it's about knowing one's market and AirAsia exists to serve the mass market, which includes the middle class too. "We are not here to push for extra premium. We will push for that extra ancillary income to try and sell you more but I think premium is not something we are particularly good at," he explained.

When asked if brands that align themselves with premium offerings have an easier time in gaining affinity with consumers, Fernandes reiterated that brand marketing is a massive premium. Hermès and Ferrari, for example, do not need to tell consumers about their products so much but there are still interested buyers. "I don't think it's easier, but I think once they get there, it is easier because people know what [the brands] stand for. But that's no different from a low-cost brand such as Southwest Airlines or UNIQLO. Everyone knows what they stand for," he added. According to him, this is what AirAsia is all about. It is not just about data but in fact, it is selling a dream, a vision for accessibility.

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COVID-19 a silver lining for AirAsia

Last October, Fernandes said the company "has not wasted the crisis". In fact, it used the lockdown period in Malaysia to finetune the platform, unify the user experience and simplify its payment. That was also the period when it officially unveiled its super app with pillars such as travel, eCommerce and fintech. Since then, it has expanded into the food delivery industry, grown its eCommerce offerings in Singapore and entered the ride hailing scene.

"If we are to succeed, COVID-19 would have been a silver lining that gave us the opportunity to sit down, pivot and put the foot on the accelerator," Fernandes said. While the company has gone through a few iterations of its plans the last 18 months, Fernandes said it is "almost 100%" there on what its strategy is going to be, especially with the super app, BigPay, Teleport and Redbeat Academy in place. "You know, 20 years ago, no one gave me the time of day when I started AirAsia, which has now become the fourth-largest airline in Asia. So we'll quietly sit behind and just chug along and see where we get to," Fernandes said.

AirAsia even received a nod from Cathay Pacific in June when the latter announced plans to rebrand into a new business model that offers a wide range of products in addition to selling plane tickets. According to South China Morning Post previously senior management of Hong Kong's flag carrier likened the plan to that of AirAsia. "You've got to remember where I came from - nothing. We were competing against Singapore Airlines and Malaysia Airlines, which were funded by the government. And in the same way, some of these unicorns are funded by venture capital firms," he said, adding:

We come from the school of hard knocks and no one knows mobility better than AirAsia. Everything we have gone into is mobility.

From airline to ride hailing to food delivery and logistics, at the end of the day, these still fall under mobility and are a natural extension for the company, Fernandes said. Nonetheless, while the evolution of AirAsia is exciting, it can also be challenging to convince employees who might be averse to change. While AirAsia employees are used to the speed of change, it still took a bit of time to convince everyone. "It's a massive ship; we are not a small company. To change that ship, it took a little bit of time to get everyone on our side. People don't like change but we were helped by the fact that we couldn't fly," he said.

This was a big advantage for Fernandes because it allowed him to rally employees to focus and explain that if AirAsia does not change, "[it is] finished". "Change and transform or die," he said. While many tend to focus on external branding and marketing, Fernandes said for him, branding is internal branding. "You've got to sell it to your staff and if they believe in the vision, then it's a lot easier," he added.

To take AirAsia to greater heights, Fernandes spent the last year selling the dream to his employees and they are now believers, he said. Take ride hailing, for example, while it might seem impossible to break into the space six months ago given Grab's dominance, Fernandes said it hit 150,000 rides in Malaysia last month.

There is always talent out there

The rise of digital has led to an increase in the need for relevant skills and businesses, in general, have been concerned about the lack of digital talent in the market. Fernandes, however, said this has never been a worry for him because there will always be talent out there. "I hate people who say there is no talent, there always is if you give people a chance," he said, adding:

Everyone's got a brain. It's just about giving them the chance, nurturing them, and giving them some attention.

"I think some find us, people who were overlooked for a promotion or those who are looking to be more self-starters. We find a lot of raw diamonds that many of these companies treat as another number. But we also develop our own," he said. For example, AirAsia went from two to 245 planes because it invested in its own academy to train its own pilots instead of hiring those with prior experience.

Overall, Fernandes has no regrets when it comes to AirAsia's digital journey. "You learn on the job. You can always do things better on hindsight but we pretty much have to go through those mistakes to be better. It's like a baby; when you learn to walk, you fall down a few times. You've got to go through that process," he said.

"It's an exciting time to be alive. We survived the pandemic, that's a victory already. We survived in our company so there's a new dawn. We should be excited about the future," Fernandes said.