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AirAsia Group—controlled by Malaysian tycoons Tony Fernandes and Kamarudin Meranun—has changed its name to Capital A, reflecting the loss-making budget carrier’s diversification into digital businesses.
“The strategy behind the change of name is to introduce a new corporate identity that better reflects the group’s core businesses today and its future undertakings, in tandem with our rapid transformation from an airline into a one-stop digital travel and lifestyle services group,” Fernandes, CEO of Capital A, said in a statement on Friday. “We believe that the new company name will also further enhance the marketability of our products and boost the success of our group for the long haul.”
While the airline will continue be branded as AirAsia, Capital A will be the investment holding company for the group’s new businesses such food and parcel deliveries, ride-hailing and digital payments. As the Covid-19 pandemic dragged the airline deeper into to red, it has been pivoting into digital businesses to build a superapp that will compete with Southeast Asia’s tech titans such as Indonesia’s GoTo and Singapore’s Grab and Sea Group.
Passengers carried by AirAsia’s operating joint ventures across Indonesia, Malaysia, the Philippines and Thailand dropped 64% to 4.8 million in 2021 from the previous year, as governments around the world enforced fresh lockdowns amid a renewed spike in Covid-19 infections, data released by the company on Thursday showed. Traffic picked up in the final quarter of the year, with passengers carried doubling to 2.7 million.
“We have pivoted, we have transformed and we have a five year plan in place which will see non airline revenues contributing around 50% of overall group revenue by 2026,” Fernandes said. “Once the airlines return to pre-Covid levels in the near future all of our other lines of business will benefit significantly and will all soar to new heights in tandem with one another.”
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Airlines were among the hardest hit by the pandemic as governments around the world imposed lockdowns and restricted cross-border travel to curb the spread of the virus in the past two years. Global airlines will lose about $52 billion this year after incurring about $138 billion in losses last year, according to estimates by the International Air Transport Association.
“Even though the last two years have been the most difficult and disrupted years in the history of commercial aviation, I welcome the year ahead with much greater confidence,” Fernandes said. “Domestic air travel has already started to rebound in our key markets.”
While international flights have yet to return to pre-Covid levels due to the ongoing spread of the Omicron coronavirus variant, Fernandes said he hopes international borders will gradually reopen later this this year.
Fernandes and Kamarudin took over AirAsia in 2001 to build a low-cost carrier that would make air travel affordable. The partners dropped out of this year’s ranking of Malaysia’s 50 Richest people.