Strong rebound ahead for short-haul, leisure travel soon: AirAsia chief

Kuala Lumpur

AS countries around the world carry out their Covid-19 vaccination programmes, this will help revive the battered global tourism industry and demand could see a strong pick-up from June or July this year, said AirAsia Group chief executive Tony Fernandes.

"There will be strong rebound for short-haul travel and leisure travel because people want to get out, but the only way to get travel back are vaccines and vaccine passports," the 55-year-old said at a tech conference on Thursday evening.

Citing Malaysia and Singapore as an example, Mr Fernandes foresees that the vaccines and blockchains from both countries will be inculcated into the travel apps used by their respective citizens.

Earlier this week, the governments of Singapore and Malaysia agreed to work towards recognising each other's vaccine certificates to facilitate cross-border travel in the future. The two neighbours also agreed to allow cross-border travel on compassionate grounds in the coming months.

Mr Fernandes, speaking at a session during the Geo Connect Asia conference, said: "By early next year, travel orders will start opening up for those who are vaccinated, with no quarantine needed, and we will be headed towards a new normal."

However, the budget carrier chief does not see the same level of revival happening for business travel on the cards.

"From an airline perspective, I think first-class is dead and business-class will be the new front-end of the cabin, although it's going to take longer for business travel to come back," he said.

"Many companies will question the need of flying halfway round the world for a meeting when you have technology such as Zoom. (Business travel) will come back in due course but it would take time to get back to its peak."

With the eventual reopening of borders between Malaysia and Singapore, AirAsia is looking to start flights from Johor Bahru to Singapore using air taxis. These are small commercial aircraft that are able to make short flights.

This is an area AirAsia plans to eventually commercialise, with the plan being to launch a similar service from Kuala Lumpur International Airport to Singapore.

Currently, the company is also looking into going into the drone delivery business, which Mr Fernandes says he is very bullish about.

"Drone delivery is all about speed and the Malaysian Civil Aviation authorities are very supportive of the idea," he said.

"However, they are looking at pilots and line-of-sight for the drones, which would cost three times more than a bike delivery, but that cost is going to come down very rapidly. It might take time but I think people will be prepared to pay more for the quick service."

Mr Fernandes expects the first products handled by the drones to be e-commerce items, and there are plans to extend the delivery service to companies that need emergency supplies.

Last October, AirAsia underwent a rebranding to include other products and services under a single application, which they termed as a "super app".

Besides air travel, the company's website now also includes e-commerce, fintech and media services. Recently, AirAsia also launched a food delivery service in Singapore.