AirAsia airline considering ICO
AirAsia’s CEO, Tony Fernandez, is a businessman known for taking risks, and he’s about to take another one as he’s considering an initial coin offering (ICO) for his low-cost airline.
Launching the ICO is part of an agenda to push the airline — a $3 billion company that’s publicly listed in Malaysia — into financial services.
Fernadez, speaking to TechCrunch at Money2020, said he’s analyzing the potential of offering an ICO.
“We have two things that are very interesting which will have relevance to ICO’s, one is our loyalty card where we have [loyalty program] BigPoints, and I think those BigPoints can be easily transferred to the blockchain,” Fernadez told Techcrunch.
“We have a product that can be a currency in Big Loyalty, [and] we’re building a payment platform so the two can marry quite nicely,” Fernandez said.
If Fernandez — with an estimated worth of $745 million and one of Malaysia’s 50 richest people this year — pulls the trigger and is successful in launching the ICO, it would make AirAsia the first airline to create its cryptocurrency.
That AirAsia is trying to be the first airline to launch a cryptocurrency falls in line with its cutting-edge past. Earlier this year, AirAsia introduced facial recognition to the check-in desk at Malaysia’s Senai International Airport in Johor Bahru.
Fernandes is not only interested in cryptocurrency but in the technology behind it as well.
Fernandez is toying with the idea of adding a small loan service and notes that blockchain could aid in that development as the technology makes it easy to shift currency and data between countries.
This is a response to South Asia having a large number of workers who send money across borders.
Blockchain takes to the sky
While AirAsia would become the first airline with its own digital currency, it’s not the first airline to make news in the cryptocurrency community.
Lufthansa, a German airline and of Europe’s biggest, announced a partnership in Oct. 2017 with Switzerland start-up Winding Tree. The start-up aims to use blockchain technology to make travel booking more affordable for travelers while making it more profitable for suppliers.
Winding Tree’s own ICO in February passed its original funding goal of $10 million in just six days.
How can blockchain technology help lower costs for travelers?
According to Fritz Joussen — CEO of TUI Group, one of the largest leisure, travel, and tourism companies in the world — blockchain will allow smaller online travel agencies the ability to compete with some of the big boys, like Priceline and Expedia, by leveling the playing field.
“It will be very difficult for intermediaries to have sustainable businesses cases. These platforms [travel intermediairies] build reach by spending billions on advertising, and they create monopolistic margins on top of what they have as sales and marketing,” Joussen said in an interview with Skift.
“They do offer great sales and marketing. Booking.com is a great brand, but they create superior margins because they have monopolistic structures. Blockchain destroys this,” Joussen said.
Before Lufthansa joint venture with Winding Tree, a Russian airline, S7, started using Ethereum blockchain in July 2017 to sell tickets. The move was made in part to facilitate payments and decrease waiting times between airlines and agents.
Cryptocurrency and blockchain technology show no sign of slowing down and it seems other industries are trying to make use of them.