The year started with the imposition of a lockdown in early January as the number of Covid-19 cases spiked. In March, the number of new infections began to moderate, resulting in the relaxation of travel restrictions – hence also a sharp increase in the number of guests carried. However, the reprieve was short-lived. From the second quarter onwards, rocketing infection rates resulted in another crackdown on movement – this time lasting until mid-September. As the number of cases began to stabilise again, the government introduced the Langkawi Travel Bubble on 16 September 2021 to stimulate domestic tourism. The response was positive, with demand increasing 36% within the first two months of its launch. This contributed to a 149% uptick in domestic travel from September to December 2021 compared to the same period in 2020. The Malaysia-Singapore Vaccinated Travel Lane (VTL), launched on 29 November 2021, also helped to boost numbers. Reflecting pent-up demand, flights were sold out for the first 14 departure dates on the very first day bookings were opened on AirAsia’s website and the airasia Super App platform. Leveraging Thailand’s Phuket Sandbox and its Test & Go facility, AirAsia Malaysia also recommenced flight operations to Thailand to assess demand while building confidence in international travel. In order to optimise operations throughout the year, the airline continued to focus on chartered operations, organising more than 300 flights to repatriate Malaysians back home. Overall, however, AirAsia Malaysia’s domestic capacity shrank by 53% year-on-year while its international capacity, already low in 2020, reduced by a further 93%. In true AirAsia spirit, the airline did not waste the downtime; instead it used the past year to introduce new products and services that cater to changing consumer demand as well as create new revenue streams. FACES technology, which had been piloted in 2018, was rolled out more extensively across airports throughout Malaysia, and has also been incorporated into the airasia Super App to allow guests to validate and Aviation A i r A s i a A v i a t i o n G r o u p – A i r A s i a M a l a y s i a For most of 2021, AirAsia Malaysia was in survival mode, closely monitoring its key markets and adapting its capacity to meet demand. As international travel continued to be dormant, the focus was on chartered flights and local connectivity - during the intermittent phases when local travel was permitted. However, the year ended on a positive note when domestic borders began to reopen more fully and bubbles of regional travel emerged. Financially, our airline group has continued to undertake robust due diligence to review every opportunity to reduce costs in order to compensate for the loss in flight revenue due to limited flying in the pandemic. This includes our fleet and network optimisation strategy, reviewing all partnership agreements and future fleet orders as well as furloughing Allstars while cutting salaries across the board. Those on furlough, however, have been encouraged to reskill and/or upskill at the airasia academy, and to take on temporary roles across the Group’s non-airline businesses. Meanwhile, to enhance revenue, AirAsia has ventured into the provision of consultancy services targeting AAAGL and third parties interested in setting up low-cost carriers (LCCs) in other regions. LCCs are likely to recover faster than others as more people are expected to opt for short-haul leisure travel while the world recovers from two years of being ravaged by the pandemic. pay for online purchases on the platform using their facial biometrics. Inflight, guests can use FACES to order food as well as make duty free purchases. On the ground, FACES, together with other newly-introduced innovations such as electronic data capture machines (including tap2phone), are further expanding the range of contactless solutions provided to enable guests to enjoy safer, more hygienic and seamless journeys. Meanwhile, the airline’s pilots who have been on furlough have also put their time to good use. Pitching their knowledge and skills, a group of AirAsia pilots based in Malaysia helped to set up a Drone Academy (under airasia academy) which in January 2022 became the first of its kind to be certified by the Civil Aviation Authority of Malaysia (CAAM) as a remote pilot training organisation. The academy will support the Group’s vision to launch urban drone delivery for our e-commerce platforms, while also enabling third parties to acquire the skills necessary to use drones in their operations. This will also provide significant new job opportunities for existing and aspiring new pilots. 0 7 6 C A P I T A L A B E R H A D Business Review (cont’d.)
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