AirAsia flies high with Oracle Cloud innovations

Southeast Asia’s budget airline king uses Oracle ERP Cloud applications to unearth new insights about operating costs and predict the profitability of competitive decisions.

We believe we can build great digital businesses with not a lot of cash that stand on their own, provide great services to consumers, and are cash-flow positive.

Tony FernandesCEO, AirAsia

Business challenges

AirAsia India, an affiliate of AirAsia Berhard, is one of the most successful airlines in Southeast Asia, was acquired by high-profile entrepreneur Tony Fernandes in 2001, when it was a struggling government-owned carrier.

Along with AirAsia X, its long-haul arm, AirAsia now flies more than 380 routes to more than 140 destinations. The Southeast Asia-based company leverages a range of digital technologies to compete on price and service.

AirAsia reported sales of 10.6 billion ringgit (US$2.6 billion) in 2018 and aims to carry 100 million passengers in 2019, up from 81 million in 2018.

Why AirAsia chose Oracle

Asia’s expanding, on-the-go middle class has led to a boom in low-price air carriers in the region during the past decade.

Amid that competition, AirAsia is turning to a range of digital platforms to help it keep a lid on costs and boost revenue. AirAsia has started using Oracle Cloud ERP financial management and procurement software to drill down into its operating costs and predict how changing fares and opening new routes will affect its profitability.

Results

Moving from paper-based purchasing and spreadsheet analysis to modern enterprise software gives AirAsia a better handle on inventory for sales of in-flight food and beverages as well as duty-free goods.

AirAsia’s instance of Oracle Cloud ERP includes airline-specific features such as fuel-cost accounting, route forecasting, airplane catering, and mileage program management.

The airline uses Oracle Cloud EPM to produce performance results in a timely manner and enable network planners to react more quickly to changing market conditions. The organization can report profitability monthly by route level, tail number, and carrier and reduce the time spent to manually prepare spreadsheets and determine key drivers of profitability.

AirAsia implemented Oracle Cloud ERP and EPM across all group companies, which include the core airline network operations, a travel and lifestyle commerce platform, financial and insurance services, logistics services, as well as entertainment affiliates. The airline quickly increased efficiencies by centralizing finance and establishing standardized accounting practices.

Partners

Air Asia and Deloitte teamed to deliver a solution that is built to help the enterprise evolve and stay ready to navigate disruption. Learn how Deloitte can help your organization make impact that matters.

Published:November 22, 2021