Online travel giants Expedia and Booking.com are warning that budget airline pioneer, AirAsia Group, risks being destabilized by ambitious plans to become the "Amazon of travel".
Booking.com's head of China, Marsha Ma, suggested the online travel giants would rally their vast networks of flights, hotels and services in the fight against any attempts by AirAsia to take market share. "The online travel agency business, especially accommodation, is a pretty heavy business model in terms of its supply chain management," said Ma. "It takes years... We have offices at 190 locations and [they] have built up our supply chain capability, with width and depth."
Expedia, once a partner of AirAsia's existing travel platform, indicated the carrier might not have the necessary skills to succeed. "What makes you great to run an airline" is not the same as being a great online travel agency, said Greg Schulze, head of commercial strategy & services at Expedia. Worse, the carrier risked being distracted from selling its own flights, which could exacerbate its current troubles, he suggested. "I am happy to see [AirAsia] negotiating with other airlines."
However, Aireen Omar, AirAsia's deputy CEO for technology, was confident AirAsia could manage the risks. It was "ambitious, but I think it's very doable," Omar said.
The aviation business model was changing, Omar said. "The key essence for us is no longer the aircraft but data." AirAsia transported close to 100 million passengers this year alone in Southeast Asia, and was seeing six to eight million visitors come to its website every month.
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