A trusted source of Asia-Pacific commercial aviation news and analysis
Cover Story
AirAsia group airlines focusing on ASEAN for growth
AirAsia Aviation Ltd carriers are rebuilding their networks and fleets as most governments ease travel restrictions. Group CEO, Bo Lingam, explains his post-crisis strategy to associate editor and chief correspondent, Tom Ballantyne.
Back in late 2000, music industry executive, Bo Lingam, had decided to quit the business. Read More » “I wanted to back pack around the world. I said if I don’t do it now, I will never do it,” he told Orient Aviation last month. Then fate intervened. He bumped into AirAsia co-founder, Tony Fernandes, with whom he had worked in the music industry, in Kuala Lumpur. “Tony said ‘come (to AirAsia) for six months and then you can leave’,” Lingam said.
He accepted the offer, a chance encounter that more than two decades later has Malaysian-born Lingam (57) overseeing the recovery of Malaysia AirAsia, Thai AirAsia, Indonesia AirAsia and Philippines Air-Asia to full strength and heading up their parent, AirAsia Aviation Ltd (AAAL).
'There is still so much of ASEAN we have not connected as yet. There is an opportunity to connect a lot of ASEAN. All these places we were planning before COVID. I am accelerating the pace of connecting those dots' |
Bo Lingam Group CEO of AirAsia Aviation Ltd |
“We have about 200 aircraft across the group. We are flying 57 planes today. With the lifting of restrictions in most ASEAN (Association of South East Asian Nations) countries since April 1, we are looking at capacity moving to 50% minimum of our previous fleet and operating at least 75% of our fleet by year-end,” Lingam said. He forecasts the group’s airlines will be at 2019 levels by mid-2023.
“China is the only place we can’t service. It is closed. A sizeable chunk of our business was China,” he said. However, Lingam believes the lost China market can be recovered within ASEAN. “A lot of people in ASEAN are not going to fly long-haul. They want to be within a four-hour range [from their home cities].
“This is where we are putting more capacity, creating routes and places for people to holiday and so forth. It is being worked on.”
Lingam, who shortened his name from Tharumalingam Kanagalingam because people in the music business had difficulty pronouncing it, said aircraft orders – the group had 362 A321neo on order - have been restructured.
“Airbus was very good to us. We had a very good discussion. We agreed on a restructure. In 2023, we will be taking maybe two or three planes. In 2024, another 10 and so forth until 2035. This could change if business is bad,” he said.
Lingam became Group CEO last October when the LCC company announced it was reorganizing its corporate structure to separate its airlines from its digital initiatives. The holding company for the airline group was renamed AirAsia Aviation Limited (AAAL). Until the corporate restructuring, Lingam was president (airlines) for AirAsia Group.
AirAsia Group Berhad (AAGB) is the investment holding company for eight digital portfolio companies. They are AirAsia Aviation Ltd, airasia Super App, cargo and logistics venture Teleport, BigPay financial services, edutech arm AirAsia Academy, engineering company Asia Digital Engineering, ground services division GTR and restaurant chain and food group Santan. The structural change facilitates strong projected growth in the airline and non-airline portfolio businesses, the announcement last October said.
In 2020, Teleport, the logistics venture of AirAsia digital, ramped up its delivery and digital cargo capabilities to meet significant e-commerce growth accelerated by the COVID-19 outbreak. The pandemic encouraged consumers to trust and rely on the convenience of e-commerce, boosting growth of the industry.
But at AAAL times remained tough. In its latest reported quarter, to September 30, 2021, available to Orient Aviation, revenue declined 70% year-on-year and 37% quarter-on-quarter, largely as a result of the lockdown in Malaysia from January 2021. At the same time, the aviation group reduced costs by 15% over the previous quarter and reported travel was returning, with increased bookings for the fourth quarter of 2022.
Lingam believes airlines will experience a V-shaped recovery within ASEAN - in other words a rapid return to normalcy. He premises his forecast on the easing of restrictions in several countries in the region.
Malaysia reopened its international borders to fully vaccinated travellers on April 1, as did the Philippines. Indonesia is welcoming vaccinated travellers, although they must take a COVID-19 PCR test on arrival and self-isolate until reporting a negative result. In March, Vietnam scrapped quarantine and other travel restrictions for foreign visitors.
Singapore has re-opened to all vaccinated travellers without quarantine on arrival and has abolished its Vaccinated Travel Lanes policy. Thailand is lagging behind some of its neighbours with its decision to fully re-open international borders in October. Oddly, tourist hot spots such as Phuket are operating a relaxed regime with only one night of quarantine required in a designated hotel after travellers arrive on the island.
Lingam sees signs of industry recovery. For example, he said, one AirAsia flight to Indonesia, with a 180-seat Airbus, had 152 bookings. “Even if they had to do a PCR here (in Malaysia) pre-departure people still went. It is very encouraging. In the Philippines, where there is no quarantine and no PCR test requirements, bookings went up week on week by 167%. Also, take into account Easter is coming. People are booking for Easter holidays. And beyond Easter people are starting to book,” he said.
Lingam said: “The pandemic came as a shock to all of us. We thought it might be over in weeks or months. As it progressed, we had to make some drastic decisions.”
One was furloughing hundreds of AirAsia group pilots, although they retained benefits such as medical entitlements and their rights to fly with the airline. Elsewhere in the group, only essential employees were kept on. Senior management took drastic pay cuts to ensure salaries could be paid to lower ranked staff.
As the pandemic crisis wore on, an AirAsia Consulting division was established to take purview of new airline partnerships and franchise opportunities. In the same 12 months, AirAsia Japan went bankrupt, closing down, and AirAsia India came under full control of Indian conglomerate and former joint venture partner, Tata Sons.
In 2022, there are plans to have another one or two AirAsia brands in ASEAN, Lingam said.
'I am very lucky because 95% of my pilots are with us. They are gradually returning for their recurrent training. I have close to a thousand pilots and 500 of them are online and flying. Another 500 are ready. I can train 50 pilots a month. By the end of the year, I will have the bulk of them flying. My cabin crew was never let go. For engineers, again we furloughed them. About 10% have left us to pursue other interests, but most of them are still with us' |
And the consultancy business is looking further afield.
“We have a lot of interested companies and individual people, who have made lots of money over the years, harassing us to open in Africa, in Bangladesh and other destinations. We are not that keen to spread ourselves too thinly because it is not what we are good at,” he said.
“These people are very persistent. We came up with the idea we will devise a product and franchise it to them. Or we will assist them to set to up an airline, for example, in Africa. We will help you with what you do and so forth,” Lingam said.
“The establishment of the consulting arm does not mean we will see an AirAsia Nigeria or an AirAsia Kenya. Not at all.
“The moment you say AirAsia Nigeria people associate it with us. Then I have to ensure safety. I have to ensure best practices. I have to ensure transparency to all that worries me. Then I would have to go to another continent. Even Tony [Fernandes] says no.”
The pandemic has forced the group to accelerate digitalizing the business, even at AirAsia, generally recognized as a digital leader.
“It was the first thing I did when COVID happened. Our first thoughts were ‘you don’t want to go to the check-in counter’. You register with your face. You check in with your face. If you have a bag you use self-service. If you don’t have a bag, you walk straight to the gate and off you go,” he said.
“I am planning to create even more automation. If you go on board now there is no menu card. You go onto Wi-Fi, check the menu on your phone and you order. The only challenge I have is many airports are still finding their way around this. They have to help airlines, help people to digitalize the airport experience as well.”
Shocking as it was, the pandemic was timely, Lingam said, enabling AirAsia, even if everyone was working from home, to focus on plans to split the business and create an ASEAN Super App, a travel and lifestyle mobile app that does everything for customers. It includes AirAsia Health, a one-stop healthcare travel platform aimed at facilitating the healthcare of travellers’ journeys.
Lingam said the industry has learned from the crisis. “When we had SARS (the Severe Acute Respiratory Syndrome outbreak in 2003) people were a bit complacent. When SARS came along they should have found a vaccine. The world has taken note of this during COVID,” he said.
“As an airline, we must continue to push innovation in health education. On the AirAsia Health app we are including lots of health products. This is because of COVID.”
As for the future, Lingam predicts fuel costs may be a primary challenge. “After battling the pandemic, sensible people need to get to the table and resolve whatever differences they have (a reference to events in Ukraine). I hope the fuel price will slowly come down. Of course, there is always the possibility of a new (COVID) variant.”
As for AAAL, Lingam said it will continue to be a low-cost operator. “What will be different is we will have to bring a lot of innovation into the business. We will stay ahead of the curve, keep our costs low and continue to connect.”
Like AirAsia co-founder, Tony Fernandes, Bo Lingam was working in the music industry before he switched – and then immersed himself - in the airline business. He had worked at various production houses, including roles as Production Controller at EMI Music Malaysia and Operations Manager and Promotions Manager at Warner Music Malaysia. He joined AirAsia in 2001 as a Ground Operations Manager, responsible for the implementation of the low-cost concept in operations and procurement. Lingam told Orient Aviation the two industries – music and airlines – are like “chalk and cheese’. “ People said ‘what do you know about running an airline’? That was my challenge. To prove them all wrong.” So he “sat down with very senior aviation and engineering people, also consultants Tony (Fernandes) had hired at the time, and I used Yahoo and Google to learn everything I could about the airline business’’. In the following two decades, Lingam has held several key positions at the company, including purchasing and supplies senior manager and regional guest services director. When he was promoted to president and group chief operations officer, he supervised AirAsia operations in Malaysia, Thailand, Indonesia and the Philippines. He also drove process improvement and set up airlines in the region for the Group. As Group CEO of AirAsia Aviation Limited, he leads AirAsia Berhad Malaysia, Indonesia PT Air Asia, Philippines AirAsia and Thai Air Asia. |
Response(s). Share your ideas.
Donald Barry says:
September 28th 2024 09:31pm
Ronald Macknin says:
September 24th 2024 12:13am
peter rowland says:
September 22nd 2024 10:31pm
Christian WILHELM KAST says:
September 16th 2024 08:40am
Christian WILHELM KAST says:
September 16th 2024 08:37am
Christian WILHELM KAST says:
September 16th 2024 08:36am
Christian WILHELM KAST says:
September 16th 2024 08:35am
GROUP RODRIGUEZ says:
September 14th 2024 12:52pm
Joy Williams says:
September 8th 2024 08:35pm
Halil Ibrahim says:
September 6th 2024 05:41pm
Peter Gonzalez says:
September 5th 2024 02:48pm
james rodriguez says:
September 2nd 2024 01:54pm
Eric Candy says:
August 27th 2024 02:12pm
Eric Candy says:
August 27th 2024 02:12pm
Eric Candy says:
August 27th 2024 02:12pm
Bancy Randy says:
August 27th 2024 02:11pm
Eric Candy says:
August 27th 2024 02:08pm
Eric Candy says:
August 27th 2024 02:08pm
Eric Candy says:
August 27th 2024 02:08pm
Eric Candy says:
August 27th 2024 09:21am
Eric Candy says:
August 27th 2024 09:21am
Eric Candy says:
August 27th 2024 09:20am
Bancyrandy says:
August 25th 2024 07:55pm
Nelson Mark says:
August 22nd 2024 09:18pm
Nelson Mark says:
August 22nd 2024 09:17pm
Regi says:
August 19th 2024 07:40pm
Regi says:
August 18th 2024 03:47pm
Rob Aigeldinger says:
August 16th 2024 01:28pm
Westlake Loans says:
August 2nd 2024 12:03pm
Johnson Edward says:
July 28th 2024 02:01am
Johnson Edward says:
July 28th 2024 02:01am
Jackson says:
July 26th 2024 11:12pm
johnson says:
July 21st 2024 10:34am
Anthony Jack says:
July 19th 2024 02:10am
Banan Alsalti says:
July 18th 2024 01:06pm
Jake Manny says:
July 2nd 2024 07:44pm
DOMINGO says:
June 10th 2024 03:34pm
Westlake Loan says:
May 21st 2024 08:08pm
Westlake Loan says:
May 21st 2024 08:06pm
makram says:
May 7th 2024 08:03am
LOAN OFFER APPLY NOW $$$ says:
April 18th 2024 12:40pm
Ivan says:
March 13th 2024 12:41pm
Lisa says:
March 13th 2024 12:40pm
loan Offer says:
March 5th 2024 07:27pm
Matt Freeman says:
February 19th 2024 01:35pm
Mariana Dustler says:
February 19th 2024 01:33pm
Laura says:
February 19th 2024 11:31am
Laura says:
February 19th 2024 11:30am
KIMBERLEY LEWINSKY JONES says:
February 9th 2024 11:27pm
KIMBERLEY LEWINSKY JONES says:
February 9th 2024 11:27pm
KIMBERLEY LEWINSKY JONES says:
February 9th 2024 11:26pm
KIMBERLEY LEWINSKY JONES says:
February 9th 2024 11:26pm
KIMBERLEY LEWINSKY JONES says:
February 9th 2024 11:24pm
KIMBERLEY LEWINSKY JONES says:
February 9th 2024 11:22pm
KIMBERLEY LEWINSKY JONES says:
February 9th 2024 11:19pm
KIMBERLEY LEWINSKY JONES says:
February 9th 2024 11:19pm
KIMBERLEY LEWINSKY JONES says:
February 9th 2024 11:18pm
KIMBERLEY LEWINSKY JONES says:
February 9th 2024 11:17pm
KIMBERLEY LEWINSKY JONES says:
February 9th 2024 11:16pm
KIMBERLEY LEWINSKY JONES says:
February 9th 2024 11:16pm
KIMBERLEY LEWINSKY JONES says:
February 9th 2024 11:15pm
KIMBERLEY LEWINSKY JONES says:
February 9th 2024 11:15pm
Sadiamusa says:
February 6th 2024 07:50pm
Ximena Bustillo says:
February 6th 2024 12:09pm
Dan Mahelt says:
February 5th 2024 04:01pm
Tim Gerart says:
January 31st 2024 09:49pm
Hilary says:
January 26th 2024 03:00pm
rosieboon says:
January 19th 2024 06:42pm
rosieboon says:
January 19th 2024 06:41pm
Brandon Torre says:
January 19th 2024 01:16am
Nguyen says:
January 17th 2024 08:18am
Nguyen says:
January 17th 2024 08:18am
SIR DAVIDSON ALBERT. says:
January 14th 2024 03:34pm
dr james eric says:
January 10th 2024 08:40am
Jennifer Greenland says:
January 3rd 2024 09:17am
Mark Lucas says:
November 30th 2023 12:00pm
Sandra Rowan says:
November 26th 2023 01:45pm
Bills Sarah says:
November 21st 2023 11:27am
Shovel says:
November 20th 2023 06:58pm
Faith Tyler says:
November 19th 2023 11:59pm
Bobs Ernest says:
November 18th 2023 06:02pm
loan Offer says:
November 18th 2023 08:09am
Amelia Claudien says:
November 17th 2023 03:34pm
Joe Miles says:
November 8th 2023 12:41am
Sheila Hagan says:
November 7th 2023 08:36am
raimo ojatalo says:
October 25th 2023 12:31pm
Lattimore says:
September 29th 2023 06:59pm
Rebecca Storm says:
September 7th 2023 11:42am
Winfred Hale says:
August 21st 2023 08:35pm
Grace Katsiaris says:
August 10th 2023 07:24pm
Serge Mulphy says:
July 30th 2023 12:23am
Tiffany Kennan says:
July 24th 2023 10:22pm
Marcia Johnson says:
July 24th 2023 09:01pm
Andrew Legrand says:
July 12th 2023 07:19pm
Bradley Nicholas says:
July 2nd 2023 08:59pm
John lucas says:
June 28th 2023 07:29pm
Madeline Gilbertor says:
June 22nd 2023 11:51pm
JASON WOOD GRAY says:
June 22nd 2023 09:30am
JASON WOOD GRAY says:
June 22nd 2023 09:30am
JASON WOOD GRAY says:
June 22nd 2023 09:29am
JASON WOOD GRAY says:
June 22nd 2023 09:29am
JASON WOOD GRAY says:
June 22nd 2023 09:29am
JASON WOOD GRAY says:
June 22nd 2023 09:28am
Kathleen Gary Keen says:
June 4th 2023 10:08pm
Eric Reuben says:
May 24th 2023 02:08am
Maxwell Leroy's Smith says:
May 20th 2023 11:14pm
MEGAN BROWN says:
May 12th 2023 08:23pm
MEGAN BROWN says:
May 12th 2023 08:22pm
MEGAN BROWN says:
May 12th 2023 08:21pm
MEGAN BROWN says:
May 12th 2023 08:21pm
MEGAN BROWN says:
May 12th 2023 08:21pm
MEGAN BROWN says:
May 12th 2023 08:20pm
MEGAN BROWN says:
May 12th 2023 08:20pm
MEGAN BROWN says:
May 12th 2023 08:20pm
CONRAD DONAD says:
May 8th 2023 07:21pm
Linda Dunham says:
April 22nd 2023 02:12am
Helen Bates says:
April 10th 2023 04:58am
CHARLOTTE SUMMERS says:
April 2nd 2023 01:41am
CHARLOTTE SUMMERS says:
April 2nd 2023 01:40am
CHARLOTTE SUMMERS says:
April 2nd 2023 01:40am
CHARLOTTE SUMMERS says:
April 2nd 2023 01:39am
CHARLOTTE SUMMERS says:
April 2nd 2023 01:39am
CHARLOTTE SUMMERS says:
April 2nd 2023 01:39am
CHARLOTTE SUMMERS says:
April 2nd 2023 01:38am
CHARLOTTE SUMMERS says:
April 2nd 2023 01:37am
CHARLOTTE SUMMERS says:
April 2nd 2023 01:36am
CHARLOTTE SUMMERS says:
April 2nd 2023 01:36am
CHARLOTTE SUMMERS says:
April 2nd 2023 01:36am
Perry Ice says:
March 22nd 2023 10:55am
Richard Chadwick says:
March 16th 2023 07:33am
Richard Chadwick says:
March 16th 2023 07:32am
Mary George says:
March 14th 2023 08:13am
Mary George says:
March 14th 2023 08:12am
Leroy Schultz says:
March 12th 2023 10:46pm
Mona Lisa says:
March 11th 2023 08:46pm
Mona Lisa says:
March 11th 2023 08:46pm
Carey says:
March 5th 2023 08:57pm
Carey says:
March 5th 2023 08:57pm
GRICELDA FLORENTINO says:
March 3rd 2023 08:25pm
Raya Mac says:
March 2nd 2023 09:05pm
Glimonra Edwardsen says:
March 2nd 2023 08:53pm
Hank Tamas says:
February 26th 2023 11:53am
ROSE MYSTICAL says:
February 25th 2023 08:13pm
ROSE MYSTICAL says:
February 25th 2023 08:11pm
ROSE MYSTICAL says:
February 25th 2023 08:11pm
ROSE MYSTICAL says:
February 25th 2023 08:10pm
ROSE MYSTICAL says:
February 25th 2023 08:07pm
ROSE MYSTICAL says:
February 25th 2023 08:07pm
ROSE MYSTICAL says:
February 25th 2023 08:06pm
ROSE MYSTICAL says:
February 25th 2023 08:06pm
ROSE MYSTICAL says:
February 25th 2023 08:04pm
ROSE MYSTICAL says:
February 25th 2023 08:02pm
ROSE MYSTICAL says:
February 25th 2023 08:02pm
ROSE MYSTICAL says:
February 25th 2023 08:01pm
ROSE MYSTICAL says:
February 25th 2023 07:59pm
ROSE MYSTICAL says:
February 25th 2023 07:57pm
ROSE MYSTICAL says:
February 25th 2023 07:57pm
ROSE MYSTICAL says:
February 25th 2023 07:56pm
Mike Morgan says:
February 24th 2023 02:34pm
GATLIN AURORA says:
February 22nd 2023 07:06am
gomesse says:
February 13th 2023 01:14pm
gomesse says:
February 13th 2023 01:11pm
Fang Zhao says:
February 9th 2023 04:35pm
Fang Zhao says:
February 9th 2023 04:34pm
Peter Morgan says:
February 8th 2023 11:32pm
Marilyn Hathaway says:
February 7th 2023 11:24am
Angela says:
February 5th 2023 09:11pm
Mitchelle says:
February 5th 2023 09:10pm
jota says:
February 5th 2023 09:09pm
Pēteris Marija says:
January 30th 2023 03:38pm
Kingsley Henry says:
January 28th 2023 01:01am
Bertha Polanski says:
January 27th 2023 03:07pm
jason leslie says:
January 17th 2023 10:28am
Gilberto LIMA says:
January 9th 2023 09:21pm
Gilberto LIMA says:
January 9th 2023 09:21pm
Gilberto LIMA says:
January 9th 2023 09:21pm
Gilberto LIMA says:
January 9th 2023 09:19pm
Gilberto LIMA says:
January 9th 2023 09:19pm
Gilberto LIMA says:
January 9th 2023 09:19pm
Gilberto LIMA says:
January 9th 2023 09:19pm
Gilberto LIMA says:
January 9th 2023 09:19pm
Gilberto LIMA says:
January 9th 2023 09:19pm
Gilberto LIMA says:
January 3rd 2023 02:15pm
Gilberto LIMA says:
January 3rd 2023 02:14pm
wogeova says:
January 2nd 2023 06:44am
Arab Sawda says:
December 12th 2022 06:55pm
Alex Wolf says:
December 8th 2022 05:16am
Alex Wolf says:
December 8th 2022 05:16am
Petr Buzek says:
October 19th 2022 12:43pm
Petr Buzek says:
October 19th 2022 12:41pm
Sonia Walcott says:
October 15th 2022 10:24am
Dr james eric says:
September 6th 2022 04:33pm
Mike Morgan says:
September 6th 2022 11:48am
Dr james eric says:
August 31st 2022 03:13pm
Robert Mitchell says:
August 19th 2022 02:39am
Robert Mitchell says:
August 18th 2022 04:57pm
Miguel Rodriguez says:
August 15th 2022 10:55am
emily keeton says:
August 9th 2022 09:56am
Financing Available says:
August 8th 2022 11:05pm
Business Loan says:
July 31st 2022 01:54pm
Johnny Smit says:
July 26th 2022 02:09pm
Mark Thomas says:
July 8th 2022 04:59am
Leonard Adam says:
June 25th 2022 04:50am
Dr James Eric says:
June 23rd 2022 08:37pm
homelend sumiti says:
June 22nd 2022 01:46pm
homelend sumiti says:
June 22nd 2022 01:46pm
BENJAMIN PERKINS says:
June 11th 2022 07:14pm
Heather Walter says:
June 7th 2022 10:21am
Heather Walter says:
June 7th 2022 10:20am
Sandra Mason says:
May 29th 2022 05:30am
Abdullah says:
May 27th 2022 07:06pm
suh deh says:
May 18th 2022 10:59am
JENKINS COOPER says:
May 8th 2022 10:54pm
Layla Cole says:
April 26th 2022 02:35pm
Milanda Seger - CREDIT FIX says:
April 15th 2022 03:23pm
SPEAK YOUR MIND
Your email address will not be published. All fields are required.
© Orient Aviation Media Group. All Rights Reserved.
Henry says:
October 11th 2024 03:44pm