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AirAsia to resume all domestic routes; launches agriculture e-commerce platform

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Malaysian budget carrier AirAsia Group will restart all domestic routes from July, chief executive officer Tony Fernandes said on Monday, after the government eased movement curbs for containing the coronavirus.

[KUALA LUMPUR] Malaysian budget carrier AirAsia Group will restart all domestic routes from July, chief executive officer Tony Fernandes said on Monday, after the government eased movement curbs for containing the coronavirus.

Malaysia allowed interstate travel to resume last week as part of the government's plan to revive an economy hit hard by the pandemic after declaring that the coronavirus was successfully brought under control.

Mr Fernandes said the airline will run flights over its entire domestic network and at full seat capacity, according to government guidelines, though frequency would depend on demand.

"We're seeing very strong demand. Very, very strong. People want to fly, people want to go home, they want to resume business," Mr Fernandes told reporters at a company event to launch the airline's new agriculture e-commerce platform.

Mr Fernandes said the platform, called OurFarm, aims to connect local farmers directly to businesses, besides serving as the main source of fresh produce for AirAsia's in-flight food outfit, Santan.

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Ourfarm has a network of 7,000 trucks for pickups and deliveries in the Kuala Lumpur area, and is readying planes to quickly transport fresh produce including fruit, vegetables, meat and fish, into Singapore and Malaysia’s Sabah and Sarawak in the next three to four months.

AirAsia is mulling flying thorny, pungent durians around the region as part of the plan, Bloomberg reported. "It’s the durian season now and we’re working very hard to get them on board," Ourfarm chief executive officer Lalitha Sivanaser said in a phone interview. "The Singaporeans, the Thais, as well Indonesians have reached out for durian exports using our platform."

Ourfarm will cut fresh produce procurement costs by as much as 25 per cent, the company said, as small businesses can source directly from farmers, breeders and fishermen.

The airline group also intends to expand its cargo business transporting produce from the farmers on the platform in the next three to four months.

Mr Fernandes said the group will "use our planes to get farmers to extend their market beyond the local area that they operate in" such as flying fish directly to North Asian markets or Singapore.

The coronavirus pandemic triggered disruptions in food supply chains around the world, snarling logistical operations and choking transport of fresh produce as multiple government lockdowns shut borders, closed ports and curbed trade.

The crisis has also roiled the airline industry. AirAsia is among many global airlines facing financial difficulties because of widespread flight cancellations. It plans to reduce costs by at least 30 per cent this year by deferring aircraft deliveries, cutting salaries and reworking fuel hedging, and is in talks for possible joint ventures for additional investment.

The carrier, which has posted losses for three of the past five quarters and is due to report first-quarter results later this month.

"From an AirAsia perspective, the crisis has created an opportunity for us, by looking at a way for us to utilise our airlines facilities to build traffic for us," Ourfarm's Ms Sivanaser said. The agriculture industry is a business that’s "forever green", but could get easily disrupted by connectivity issues and even the weather. "We want to come in and help connect those dots," she said.

REUTERS, BLOOMBERG

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