Providing low cost air services spanning Asia and beyond is only one of the AirAsia Group (AirAsia) value propositions. The airline also aims to deliver innovative, personalised products and services that meet the needs of each of its passengers. Technology is key to the airline’s business model.
The airline’s success in leveraging technology is evident in the scale and reach of its business. Today, AirAsia and its affiliates operate flights on routes spanning Asia and beyond. The group’s primary business is AirAsia Berhad, founded in 2001 as a pioneer of low cost air travel in ASEAN. Since then, AirAsia has grown to serve more than 222 routes and 110 destinations from hubs in Malaysia, Thailand, Indonesia, Philippines, and India.
AirAsia also runs Asia Aviation Public Company Ltd, the investment holding company of Thai AirAsia Co. Ltd, an airline that flies to 20 domestic and 29 international cities. AirAsia X Berhad, a low-cost affiliate of the AirAsia Group, flies to destinations across Asia, Australia, New Zealand, the Middle East, and Africa.
With a history spanning 15 years, AirAsia became increasingly conscious of the need to execute a digital transformation program to deliver better customer experiences while operating more efficiently.
When Nikunj Shanti joined as Chief Data and Digital Officer in 2016—with strong support from Group Chief Executive Officer Tony Fernandes—AirAsia started a program to become a “data-first” business and is executing a five-year plan to become a “digital airline”.
“I wanted to better ensure we were using data correctly to become more agile, efficient, and customer-oriented,” says Nikunj Shanti, Chief Data and Digital Officer, AirAsia. Capturing data about the 500 million passengers who will have flown on its services in 2018 would enable AirAsia to provide a more relevant, personalised service.
AirAsia has traditionally run its information technology applications and services in an on-premises infrastructure. However, this infrastructure required extensive maintenance that diverted technology team members away from projects that would add value to the business. In addition, the infrastructure could not scale quickly and cost effectively to support AirAsia’s data-first transformation to a digital airline.
AirAsia conducted a review and determined it needed a platform incorporating products that could capture, process, analyse, and report on data, while delivering value for money and meeting its speed and availability requirements. The airline also wanted to minimise infrastructure management and system administration demands on its technology team members.
AirAsia decided a cloud service operated by an external provider could best meet these needs and started evaluating the market. It then conducted a proof of concept and found Google Cloud Platform—including the Google BigQuery analytics data warehouse—was the best fit. “We knew data was a big part of making decisions in the future,” says Shanti. “So we needed a platform that could scale to meet our growing appetite for it. “Google Cloud Platform—in particular Google BigQuery—was ideal for this task.”
The business had already experienced the benefits of Google Cloud technologies, having deployed G Suite across its workforce in all countries except China. According to Shanti, the widespread adoption of products such as Google Forms, Docs, Sheets, and Gmail delivered a considerable improvement in collaboration between various departments, as well as streamlining and automating a range of processes.
AirAsia was impressed by the ease and flexibility with which it could extract, transform, and load customer data from its systems, websites, and mobile applications into Google BigQuery for analysis. Reporting and dashboards were quickly and effectively delivered through Google Data Studio.
Google BigQuery also provided the scalability to support rapid growth in data volumes. “Because Google BigQuery provided a platform that scaled with our input, our developers were free to create solutions without focusing on platform operations,” says Shanti.
“In addition, we were able to process queries and requests much faster than previously and tackle more complex problems.
“As a result, we could be more innovative about realizing opportunities,” he adds, citing the benefits of being able to view and understand historical measures of booking curves—a measure of how long it took customers to book before a flight. This improves the airline’s ability to manage revenues.
Google BigQuery and Google Data Studio are just two components of a broad ecosystem—powered largely by Google Cloud Platform products—deployed by AirAsia. Google Cloud Pub/Sub provides a scalable message queue that enables AirAsia developers to integrate systems hosted on Google Cloud Platform or externally. Apache Airflow enables the business to create, schedule, and monitor workflows, while Composer manages the dependencies of PHP and related libraries. Google App Engine allows AirAsia personnel to develop and host web applications. “Thanks to Google App Engine, we’ve easily been able to create new applications, services, and APIs powered by the data we have been collecting,”
AirAsia is also running the middleware for its APIs in a managed Google Kubernetes Engine environment for increased scalability, resource optimization, and reliability, while Google Cloud Storage provides storage for data from a range of systems and sources. Google Cloud Dataflow enables the business to transform data in stream and batch modes from its website search page as customers look for flights.
Deploying Google Cloud Platform has minimized involvement from AirAsia’s technology operations function, which Shanti says allows developers to deploy and test more quickly. “If we have consistent reliability from our core systems—and Google Cloud Platform incorporates monitoring tools such as Google Stackdriver that enables us to identify issues quickly—developers and product engineers can focus on turning ideas into technology.”
Shanti singles out speed as the biggest advantage that Google Cloud Platform products and services have provided to AirAsia to date. “With a minimal number of people involved, we can very quickly transform an idea or thought process into a deliverable,” he says. “Prior to Google Cloud Platform, bringing those ideas to fruition would have been impossible.”
In March 2018, AirAsia established the groundwork to use machine learning to optimize pricing for a range of services. The business used Google Cloud Machine Learning Engine to sort and predict demand for ancillary services such as baggage, seats, and meals. “By using Google Cloud Machine Learning Engine, we can sort based on data about history to predict the future,” says Shanti. “A good stream of revenue comes from our ancillary services, so we’re doing a basic sorting exercise at the moment—once we’ve mastered that, we’ll apply more complex algorithms.
“We’ll probably look in future at areas like pricing and bundling,” he adds. “Our end goal is to have the system work out the optimal price we can charge customers, which is very important for a price-conscious and price-focused business.”
The cost side of the airline’s business model is also seeing the benefits of Google Cloud Platform. The platform is making a considerable contribution to the 5% to 10% forecast reduction in operating costs—attributed to the digital airline program—AirAsia Group in 2018.
AirAsia is poised to reap further benefits from Google Cloud Platform as its deployment matures. “On the data side we’re more advanced, while on the application and programming side we have a long way to go,” says Shanti. “We’re on a trajectory upwards—we’re looking at a lot of new ideas and how to embrace and deploy them so we can further our data first and digital airline agendas.”