Published: 30/03/2011 at 12:00 AM
SINGAPORE : The budget airline group AirAsia yesterday announced a joint venture with the online travel giant Expedia Inc to tap the emerging online travel booking market in Asia-Pacific.
AirAsia group chief executive Tony Fernandes (centre) and Expedia chairman Barry Diller (right) seal their partnership yesterday in Singapore.
The deal, initially capitalised at US$20 million, aims to build on the two firms' strengths as Asia's largest low-cost carrier (LCC) and the world's largest online travel agent (OTA) to cash in on demand in the region where OTA use is relatively low.
The 50:50 partnership, the first of its kind globally between an LCC and an OTA, was created even though only 20% of the tickets in the $200-billion-a-year travel market in Asia-Pacific are bought online, compared with about 50% in the US.
A new company, Expedia Asia-Pacific, will operate Expedia's businesses in Japan, India, Southeast Asia and other East Asian markets, as well as AirAsia's own travel portal AirAsiaGo and another for hotels, GoRooms.
The new venture will have exclusive online third-party distribution rights in the region for AirAsia and AirAsiaX flights and travel packages, meaning that with a few exceptions in the region, the only place for customers to find and book AirAsia flights online will be AirAsia.com, AirAsiaGo.com and Expedia.AirAsia's airline group, consisting of AirAsia Malaysia, AirAsia Indonesia, Thai AirAsia, AirAsia X and other joint venture airlines, and Expedia are partnering outside the new venture to make Expedia the exclusive third-party travel provider for AirAsia inventory.
AirAsia group chief executive Tony Fernandes described the joint venture, first initiated in August last year, as coming at a time when online travel bookings are "exploding" in Asia, and its booming economy offers a huge opportunity to develop a set of favoured consumer brands.
"There is a lot of focus on travel in Asia today and this collaboration allows our customers to connect to a great network here via AirAsia," said Barry Diller, the chairman of Seattle-based Expedia.
Expedia has 70 million visits to its website each month and has a worldwide hotel room inventory of 130,000, together with an extensive range of travel products including tour packages and car rentals, said Expedia Worldwide president Scott Durchslag.
Expedia claims it offers superior travel booking services and destination information, delivering value to travel suppliers and other companies that want to reach this segment.
Mr Fernandes and Mr Durchslag noted the Thai travel market will also benefit from the partnership because it will draw more tourists to the kingdom.
The joint venture operates AirAsia's branded websites http://www.airasiago.com and http://www.gorooms.com, and Expedia's businesses in Japan (http://www.expedia.co.jp), India (http://www.expedia.co.in) and Singapore (http://www.expedia.com.sg) along with new online markets in Malaysia (http://www.expedia.com.my) and Thailand (http://www.expedia.co.th).
The AirAsia group operates 140 routes covering 75 destinations in Asia, Australia and Europe. In eight years of operation, AirAsia has carried more than 100 million flyers and enlarged its fleet from just two aircraft to 104.
Credit: Bangkok Post (www.bangkokpost.com)
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