Navigating business operations post COVID-19 pandemic, six diversity lessons from Air Asia

In November 2019 the novel corona virus (COVID-19) pandemic emerged in Wuhan, Hubei Province in the People’s Republic of China.

Navigating business operations post COVID-19 pandemic, six diversity lessons from Air Asia

In November 2019 the novel corona virus (COVID-19) pandemic emerged in Wuhan, Hubei Province in the People’s Republic of China. The virus spread rapidly in Wuhan before crossing international borders to every corner of the world today. Upon declaring the virus as a formidable disease in March 2020, the government of Kenya, like other countries in Africa and the globe, enforced a myriad of mandatory protocols, restrictions, policies and laws incidental but not limited to public health and the general social status.

In light of COVID-19, restrictions have not only threatened the existence of several business entities but greatly impacted the business landscape for micro, small, and medium enterprises’ operations. Some businesses have effected massive job cuts while several have shut down completely. And others are undergoing insolvency.

Source: Getty Images
A sample fleet of AirAsia’s nearly 250 airplanes.

To stay aloft, the Malaysian government projected three years for Malaysian airlines to recover

Today, we focus on the practical approach to stay afloat by the leading Southeast Asian airline-AirAsia that pioneered into the sky by its leader and founder Tony Fernandes at the beginning of the 21st Century. The airline is listed on the Kuala Lumpur Stock Exchange, and has a market capitalization of $624 million. Being the preferred regional budget carrier, boasting over 160 destinations before the advent of the COVID-19 pandemic, the airline is among the worst hit. In his recent press appearances, Fernandes confirmed that the pandemic represents the toughest challenge so far in their airline industry. To stay aloft, the Malaysian government projected three years for Malaysian airlines to recover. In a diversity themed recovery plan, we outline five key strategies deployed by Fernandes and his team to mitigate the adverse effects of the virus below. Namely: employee lay-offs, loans; medical charter flight, agriculture e-commerce platform Ourfarm; “ASEAN’s super app” and Freightchain.

With inevitable employee lay-offs, grounded fleet and diversification the airline has been forced to shore up liquidity through bank loans and notably a massive investment in “ASEAN’s super app” to mitigate COVID-19 losses.               

According to business media reports, AirAsia’s share price tumbled to nearly 18% and a recorded $187 million quarterly loss in mid last year. According to Reuters, AirAsia Group charted a fourth quarterly loss between April and June last year in a net loss of $238.3 million compared to a net profit of $ 4,207,711.19. With inevitable employee lay-offs, grounded fleet and diversification the airline has been forced to shore up liquidity through bank loans and notably a massive investment in “ASEAN’s super app” to mitigate COVID-19 losses.              

Amid the domination by ride-hailing giants such as Gojek and Singapore-based Grab in the e-commerce landscape and ever expanding its digital profile, AirAsia launched the ASEAN Super app to provide a wide range of services that transcend their primary travel business all in one platform. AirAsia is an airline of many firsts. It launched the first website in the airline industry nearly 20 years ago in South East Asia. The airline has never stopped to enrich its immense digital database comprising of over 60 million users since then. AirAsia’s approach combines travel, e-commerce and fintech enterprises that spuns across flights and hotel booking. In the endeavor, the airline has signed up over 500 hotel chains within ASEAN. Some commentators contend quite correctly “the app brings more style and more adventure leaving their customers satisfied and sanitized”.

In a bid to enhance healthcare and save more lives, the airline launched AirAsia Health in November 2020, which provides medical charter flight services for patients and medical tourism. In June 2020, AirAsia Group also spread its wings into the agriculture industry with the launch of agriculture business-to-business (B2B) e-commerce platform Ourfarm.   

Now the increasingly uneven supply and demand amidst a rapidly evolving environment, the airline’s logistic arm-Teleport enables customers to order shopping and duty free products all delivered straight to their door. On 16 April 2020 Teleport introduced Freightchain, the world’s first digital air cargo network run on blockchain. By November 2020, Teleport extended its services in 70 cities across Malaysia, Singapore, Thailand, Indonesia and the Philippines. In March 2021, Teleport announced its partnership with Golden Arches Development Corporation (McDonald’s Philippines), to support and ensure a fast-moving delivery of orders within the National Capital Region.

Most importantly, business leaders and entrepreneurs ought to keep dreaming given that AirAsia’s great success is anchored on passion, innovation and dreams as revealed by Fernandes in his 2017 memoir. Businesses can reorganize their operations, embrace technology and commit their resources to reach the desired profitability.    

This News alert is provided for general information purposes only; the opinions expressed and arguments employed herein are of the author and does not necessarily reflect the official views of Kubwa & Co Advocates. Be sure to seek specific legal advice on the subject matter. If you have any query regarding the same, please do not hesitate to contact kubwa@kubwaadvocates.com; info@kubwaadvocates.com

Website | + posts

Yuvenalis Kubwa is an advocate of the High Court of Kenya.

Leave a Reply

Need Help? Chat with us