AirAsia, from an airline to a super app

In 2019, AirAsia stopped calling itself an airline. Its founder, Tony Fernandes, told investors the future was a travel and lifestyle app: flights, hotels, food delivery, rides and payments, all in one place. Five years later, the airline still makes almost all the money, and the super app has been quietly folded back into a booking site with extras.

It would be easy to call this a failure and move on. It's more useful to ask what AirAsia got right, because one part of the plan worked very well, and it worked for a reason most companies miss.

The pitch: you already have the customer

An airline knows where you are going, when you land and how much you just spent. Every one of those facts is worth something to a hotel, a taxi company or a restaurant. The theory was simple: sell the rest of the trip to people who already trust you with the hard part.

On paper the numbers were huge. AirAsia carried more than 50 million passengers a year before the pandemic. If even a tenth of them bought one extra thing, the new business would be bigger than most startups in the region.

People don't want a super app. They want the next thing they need, right when they need it.

What actually happened

Food delivery and rides fought Grab and Foodpanda, companies with deeper pockets and a head start of several years. Payments needed a license in every country and a reason to switch from cash and bank apps people already used. Each new service had to win customers who were not in the middle of a trip, which is exactly the moment AirAsia had no advantage.

The hotel offer on the booking confirmation page was different. It sold well from the first month, because it arrived at the exact moment a traveler needed it. Nobody had to be convinced to open a new app. The decision was already half made.

Why the timing mattered more than the product

The hotel product wasn't better than Booking.com or Agoda. It was often a little worse. What it had was position: it sat on the one screen where the customer was already thinking about the next step of the same trip. Everything that sold well later, from baggage insurance to airport transfers, shared that trait.

Everything that struggled asked customers to come back on a normal Tuesday, with no trip in mind, and choose AirAsia over an app they used every day. That's not a cross-sell. That's a brand new business with a famous logo on it.

What you can borrow

Sell the next step, not every step. Look at the moments where your customer has just said yes. What do they need in the next ten minutes? Build that first.

Trust doesn't transfer by default. A cheap seat earns trust for cheap seats. It doesn't make you the obvious choice for dinner.

Count what the core business pays for. Every new service borrowed money, engineers and attention from the airline. Before you add a line of business, write down what it will take from the one that pays the bills.

Next Thursday: the pricing page that confused everyone, and the one change that doubled trials.