AirAsia MOVE, the digital arm of Malaysia-based Capital A, has reported lower revenue during the third quarter ended September 30, 2024, mainly due to reduced sale of AirAsia flight tickets.

Capital A said in a statement on Thursday that AirAsia Move reported revenue of MYR 128 million ($28.82 million), a 25 percent year on year decline.

It is noted that as the aviation group is recovering from the financial impact due to the pandemic, they resorted to doing preferential deals, that include selling inventories to other online travel agents, which will end by this December.

Despite this, other key segments of AirAsia Move are demonstrating robust growth.

Its hotels revenue increased by 6 percent year on year, driven by a 35 percent surge in bookings, supported by improved deals and personalized offers that are relevant to our user demographics.

Additionally, its rewards segment achieved a 29 percent year on year revenue growth, fueled by higher gross billing, greater points issuance, and improved redemption rates.

On a positive note, AirAsia MOVE’s earnings before interest, taxes, depreciation, and amortization (EBITDA) strengthened significantly, rising by 65 percent year on year to MYR 19 million ($4.28 million), underpinned by effective cost optimization initiatives, alongside other core businesses demonstrating improvement in returns.

“As the cornerstone of AirAsia’s sales channel, we are doubling down on our popular regional campaigns to drive demand,

“Right now, we only contribute 40 percent of the total share of AirAsia’s bookings and we aim to improve this to 60 percent by mid-2025 through multiple strategic initiatives already underway,” said Nadia Omer, Chief Executive Officer of AirAsia Move.

Meanwhile, she said AirAsia Move will continue to boost non-AirAsia bookings volume through strategic partnership and destination marketing with airline partners and tourism board partnerships.

She noted they will also improve their conversion rate of 0.75 percent further by refining pricing strategies and leveraging artificial intelligence (AI)-driven personalization to enhance the user experience and streamline the booking process.

According to her, the firm’s hotels and SNAP segments have seen good traction of conversion at 4.2 percent, on the back of strong content, pricing and personalization.

“From here on we plan to grow bookings by increasing investments on awareness and driving more traffic,” she said.

For rides, she said their focus is on strengthening their position as the go-to airport ride provider, with a target of reaching an 80 percent completion rate by the fourth quarter.

“Finally, our Rewards program will continue to expand its partner network, offering our loyal customers a wider range of exclusive benefits and incentives,” she added.

According to the statement, AirAsia Move’s payment platform BigPay’s revenue reached MYR 8.7 million ($1.96 million), with an EBITDA loss narrowed by 2 percent year on year to MYR 21.7 million ($4.89 million).

This improvement was largely driven by cost-cutting initiatives, including a 26 percent year on year decline in staff cost.

It is noted that this quarter, a fraud incident was identified, but provisions were made to manage the impact.

The firm has engaged legal counsel, and are confident that a substantial portion of the funds will be recovered through the legal process.

In addition, BigPay’s annualized average revenue per user (ARPU) continues to grow 8 percent year on year, while its revenue per headcount in the third quarter has also increased 5 percent year on year.

To fuel growth, BigPay will continue to deepen integration with AirAsia MOVE and drive spending within the AirAsia ecosystem.

According to the statement, the recent launch of BigPay Lite saw 44 percent of new users in the third quarter of 2024 onboarded via this channel.

For remittance, BigPay will target foreign workers beginning with Indonesians working in Malaysia.

BigPay is also finalizing a credit line from a bank, which will bolster its lending services and accelerate its journey toward sustained profitability.

“AirAsia MOVE will remain our primary platform for flight sales while expanding its offerings to include non-AirAsia flights through strategic partnerships and leveraging cross-selling opportunities,” said Tony Fernandes, Capital A Chief Executive Officer.

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