AirAsia Group—controlled by Malaysian tycoons Tony Fernandes and Kamarudin Meranun—plans to launch an air taxi ride-sharing service across Southeast by 2025 as the loss-making airline continues to diversify its operations.
The budget carrier said on Wednesday that it has signed a non-binding memorandum of understanding to lease a minimum of 100 VX4 electric vertical take-off and landing (eVTOL) aircraft from Avolon, the world’s second-largest aircraft leasing company with a fleet of more than 800 aircraft as of December 2021. Financial details were not disclosed.
AirAsia has been expanding into new businesses including fintech, ride-hailing as well as food and parcel deliveries in support of its efforts 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. Earlier this month, the airline’s Kuala Lumpur-listed holding company changed its name to Capital A to reflect its diversified business units.
“We are now much more than just an airline with over 20 products and services on our superapp leveraging off each other including flights, hotels, food, retail, delivery, ride hailing and more,” Fernandes said in a statement. “I am truly excited about this partnership between Avolon and AirAsia and the potential for zero-emissions ultra-short-haul air travel in Southeast Asia.” The VX4 can carry four passengers and a pilot across 100 miles at speeds of up to 200 miles per hour, according to Dublin-based Avolon.
In addition to their eVTOL partnership, Avolon and AirAsia will also work together to pursue local certification, conduct research on potential market opportunities and infrastructure requirements of unmanned air mobility services across the region, the partners said. AirAsia will also leverage its travel and lifestyle superapp to help support and build an eVTOL ride sharing platform with Avolon.
AirAsia is pivoting into digital businesses amid mounting losses as Covid-19 travel restrictions dragged passenger and cargo traffic lower. It has been in the red for past three years, posting a record net loss of 5.9 billion ringgit ($1.4 billion) in 2020.
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 last year’s ranking of Malaysia’s 50 Richest people.