AirAsia is the best low-cost airline in the world and CEO Tony Fernandes wants to shift the airline’s business towards e-commerce launching a payments platform called BigPay. Fernandes also believes the first class cabin is going away within five years. Sixteen years ago, Tony Fernandes, with a small group of intrepid entrepreneurs, took over a failing Malaysian Government-owned airline for $US0.25 and the promise to assume its $US11 million in debt.
Since then, AirAsia has helped bring affordable flying to the masses in South East Asia. In the process, the Kuala Lumpur, Malaysia-based company has become one of the most disruptive forces in commercial aviation history while making the always affable Fernandes a rockstar in the business world.
What started as a two-plane operation has now expanded to a fleet of more than 150 Airbus A320 jets with another 200 aircraft on order. And for the past nine years, AirAsia has been named the best low-cost airline in the world by Skytrax and its reviewers.
Recently, Fernandes spent a morning with the Business Insider at our headquarters in New York. Our conversation touched upon several topics including the company’s future endeavours in e-commerce, AirAsia’s move towards fintech, where the airline industry is going, and advice from his mentor Sir Richard Branson.
AirAsia is betting big on e-commerce For the airline’s next great adventure, Fernandes wants to move AirAsia’s revenue model beyond simply selling tickets and into the world of e-commerce. With an ample supply of customer data, AirAsia wants to anchor its new e-commerce operation around the sale of duty-free goods.
“So when you book your ticket (online), we’ll offer you the chance to buy duty-free and you can pick it up on the plane or at the airport,” Fernandes told us. “It gives our customers much more time to browse and potentially we can create a marketplace for shops to put content on our website.”
According to Fernandes, the average passenger has an hour to an hour and a half to shop at the airport. With the online shops, AirAsia passengers can shop 365 days a year with personalised recommendations.
Further, Fernandes wants to use the airline’s fleet to transport goods purchased to destinations throughout Asia, thereby creating a logistics business.
“If you take Amazon, they started with a website and great distribution, now they are buying planes,” Fernandes said. “We’ve got the planes and we’re working backward.”
Of course, AirAsia’s e-commerce revolution won’t get off the ground without retrofitting its fleet with high-speed Wifi, a process that’s currently underway. It’s an element of the passenger experience Fernandes admits had been lacking onboard his flights.
The airline is focused on getting rid of cash These days, cabin crew on board AirAsia flights wear several hats, among them salesperson. But due to the nature of AirAsia’s network that spans the entirety of Southeast Asia, cash poses a major problem. Which is why Fernandes is excited to jump into the financial technology (fintech) business.
“We’re so excited about the fintech revolution,” Fernandes said. “We hate cash. It’s a pain for our cabin crew. FX is a super pain. It leads to fraud. It tempts my crew to do things they shouldn’t do.”
As a result, AirAsia launched a new payment platform called BigPay that will allow the airline’s customers to buy products through their smartphones. According to Fernandes, the platform is built with group travel in mind. Which means it will allow people to share bills and transfer money to one another.
Initially, BigPay will also be available with a pre-paid card, but Fernandes and his team are working to make it more app-focused using QR codes and near-field-communications.
There will be a currency exchange feature as well.
“We think our customers are being ripped off by banks,” Fernandes said. “If you were travelling to Bali, [Indonesia] from Da Nang, Vietnam and wanted to exchange your Vietnamese Dong to Rupiah, we would facilitate that for you at a much lower rate.”
BigPay currently works with 10 currencies, but Fernandes expects to up that figure to 14.
Ultimately, the AirAsia boss believes BigPay will be able to expand beyond the airline ecosystem and into mainstream retail.
Where AirAsia and the airline industry are headed Even though AirAsia is thriving, the airline won’t be expanding beyond its bread and butter low-cost economy model. When asked if AirAsia is looking to offer a low-cost, long-haul business-class-only product like La Compagnie, Fernandes quickly shot down the idea.
“No, not while I’m at AirAsia,” he told us. “I think focus is key and we’re good at what we do and [long-haul business-class-only] is a different model.”
With that said, Fernandes understands the reasoning behind a dedicated business-class airline and is baffled by why airlines would offer so many different cabins on board a single aircraft.
“Airlines were crazy to have first class, business class, premium economy, and economy on one friggin plane,” Fernandes said. “That’s four business models on one plane.”
“You don’t have Four Seasons hotels with budget rooms and super suites, they basically have one standard, but with bigger rooms,” he added.
Instead, the AirAsia boss believes market segmentation in the future will see airlines specialize in one or two particular products.
“I’ve always said airlines will eventually become low-cost carriers and business class,” he proclaimed.
According to Fernandes, we will see the end of the first class cabin within the next five years. In addition, the economy cabin on full-service airlines could disappear altogether with dedicated low-cost carriers taking over that segment of the market. This means traditional, full-service airlines could be left operating flights with only business and premium-economy cabins.
The best advice Sir Richard Branson told him during the early days of AirAsia During the mid-1980s, Fernandes spent several years as the financial controller for Virgin Communications. Through the years, he’s become known for his close friendship with Virgin Group founder Sir Richard Branson.
But Fernandes makes it clear that he has no ambitions to become Asia’s Branson.
“Everyone thinks I want to be Richard, but I can confirm to Business Insider that I don’t,” he said. “I have no preconception of going on a balloon at 36,000 feet nor do I have any intention of going to the moon.”
While at Virgin Group during the early days of Virgin Atlantic Airways, Fernandes told Branson that his decision to go into the airline industry was crazy and advised him to sell Virgin Records. It’s something Branson remembered during the early days of AirAsia.
“One of the first people to call me up when I started AirAsia was Richard who said, ‘I thought it was really stupid to start an airline’,” Fernandes said jokingly.
As far as advice goes, it was pretty simple, yet profound.
“He just said have fun and make it a fun place which we’ve tried to do,” the AirAsia Group CEO added. “But we would have done that anyway.”
“Virgin was very informative in my whole cultural experience in that it was a fun place, it was a place where there were no suits, it was informal and ideas and innovation are encouraged,” Fernandes said.”That rubbed off on me.”
According to Fernandes, this open and innovative culture has defined the company’s success. For example, AirAsia encourages its employees to design their own uniform choices and to show off their personality as individuals.
“If they’re comfortable coming to work, they will be happier and more themselves,” he said.
LINCOLN, Neb., Nov. 16, 2017 - Sandhills Publishing announces the launch of CraneTrader, a website and print publication connecting buyers and sellers specifically in the market for cranes and other rigging and lift equipment and parts. CraneTrader leverages Sandhills' presence and longevity in the construction and heavy machinery industry to establish a niche resource for buyers and sellers more specifically interested in cranes, lifts, and other high-value material handling assets.
CraneTrader.com features listings for various types of cranes including tower, crawler, truck mounted, articulated, boom truck and rough terrain cranes, as well as boom, bucket, and scissor lifts. Listings are organized categorically and include specs, photos, videos, machine location, seller information, and contact tools that make it easy for buyers to inquire about listed assets. CraneTrader.com also ties listings cross-posted for lease/rent to RentalYard.com, the leading resource for rental and lease equipment.
The CraneTrader print publication will launch in special editions ahead of the Spring 2018 crane and lift industry trade show circuit, providing focused exposure at the industry's largest events. Regular monthly editions of the CraneTrader magazine will enter circulation in early 2018, reaching active buyers (including contractors and dealers) through direct mail distribution.
The CraneTrader brand is an extension of Machinery Trader, which has been serving buyers and sellers of construction equipment and heavy machinery since the 1970s. "Our products and services benefit both buyers and sellers by providing easy access to an efficient, global marketplace for specific assets, and CraneTrader is no exception," explains Sandhills' Director of New Products Evan Welch. "CraneTrader strategically segments the construction equipment market for targeted, high-value exposure. At the same time, it provides buyers an easy and convenient way to source the specific equipment they need."
CraneTrader joins the ranks of a global product portfolio that includes a number of brands specifically serving construction, plant, and heavy equipment markets. In addition to Machinery Trader and RentalYard, these brands include: Machinery Trader Auction Results, AuctionTime.com, FleetEvaluator, Fast Track, Fast Track Iron, MarketBook, tp-Business.fr, Plant Locator, Resale Weekly, Maquinaria OP, and Cantierissimo Carrellistica. In total, the Sandhills group distributes over five million publications every month to audiences all over the globe, and its websites receive more than 16 million monthly visits. In addition to providing customers direct access to buyers in retail, auction, and wholesale markets, Sandhills also delivers practical tools that simplify sales transactions and internal business operations through the Sandhills Cloud.
For the latest updates on CraneTrader, follow us on Facebook, Twitter, LinkedIn, Instagram, and Google Plus.
About Sandhills Publishing Sandhills Publishing is an information processing company headquartered in Lincoln, Nebraska. Our broad range of products and services gather, process, and distribute information in the form of trade publications and corresponding websites that connect buyers and sellers across the trucking, agriculture, construction, heavy equipment, aviation, and technology industries. Our integrated, industry-specific approach to hosted technologies and services offers solutions that help businesses large and small operate efficiently and grow securely, cost-effectively, and successfully. Sandhills Publishing—we are the cloud.
| a Sandhills Publishing release || November 17, 2017 |||
16 Nov 2017 - The launch of Virgin Australia’s daily Melbourne-Hong Kong services on 12 November was designed to meet growing demand for cargo capacity on the route, according to Virgin Atlantic Cargo, which provides long-haul international cargo sales and management for Virgin Australia.
Volumes have been increasing steadily in both directions since Virgin Australia commenced five Airbus A330-200 flights a week in July. The extra capacity provided by the new daily service will support the peak perishables season ex Australia as well as thriving e-commerce and courier business from Hong Kong.
Virgin Atlantic Cargo has generated over 1,200 tonnes of freight and courier traffic since the route began. Regular shipments have included garments, shoes, electronics goods, vitamins, milk powder and meat. The appointment in August of Jarrod Paterson as account manager in Melbourne has also helped the airline develop other lines of business, such as shipments of fresh lobster, Abalone and chilled salmon from Tasmania to Hong Kong.
Continued inward business investment in Melbourne is also expected to help sustain long-term cargo demand. Amazon is one of the latest global brands to announce fresh investment in the state of Victoria with its plans for a 24,000 square metre e-commerce distribution centre in Melbourne.
Pip Palmer, Virgin Atlantic’s Regional Sales Manager, Australia and New Zealand, said: “Cargo volumes to and from Melbourne have exceeded our expectations so far. There are a series of positive business indicators that show not only a consistent level of demand from our current customers but also opportunities for new traffic like we have started to generate from Tasmania.”
Virgin Atlantic, which has provided long-haul international sales for Virgin Australia since 2009, also sells capacity on Virgin Australia’s operations from Sydney, Brisbane and Melbourne to Los Angeles. Shipments to and from Australia can also connect with its global network over both Los Angeles and Hong Kong.
Freight volumes have been increasing steadily in both directions since Virgin Australia commenced five Airbus A330-200 flights a week in July.
16 Nov 2017 - The International Energy Agency’s new forecast that demand for natural gas will increase 45% by 2040 is a major opportunity for New Zealand, says the Petroleum Exploration and Production Association of New Zealand (PEPANZ). “Global demand for natural gas is only going to grow because it has half the greenhouse emissions of coal. This means that producing and exporting it from New Zealand has the potential to be a win-win outcome for global emissions and for our economy,” says PEPANZ CEO Cameron Madgwick.
“The report clearly highlights the role natural gas can play in reducing emissions by replacing coal in industrial processes and power generation. This reinforces the need for new exploration and development of our natural resources, benefiting New Zealand and the world.
“Liquefied natural gas (LNG) is going to be a major growth industry and this is great news for New Zealand given our potential deposits.
“Much of the demand is likely to come from China, India and other Asian countries. Other nations are eager to meet this demand and by the mid-2020s the United States is projected to become the world’s largest LNG exporter.
“This is an export industry New Zealand can and should be a part of. It could mean more jobs, exports and earnings for the Government through royalties and taxes.
“Taranaki is the only region currently producing but we know other areas have great promise. The recent report by New Zealand Oil and Gas looked at the Barque prospect off the coast of Oamaru and predicted it could generate $32 billion in taxes and royalties for the Government over the life of the field.”
The International Energy Agency also forecasts that global oil demand will continue to grow to 2040. While fuel efficiency and electric vehicles will reduce use by passenger cars, other sectors such as trucks, planes and shipping will continue to drive demand.
16 Nov 2017 - Most engineers didn’t go to school aiming to become economists, but that’s often what it feels like once you take on a managerial role. High-performance equipment is expensive, and downtime is costlier than ever. Lubrication is a fact of life, as is maintenance, whether it’s an airliner on the ramp or a conveyor on an assembly line, and the overall cost of preventative maintenance is always in play. High temperature applications make the problem even worse. At 400° F and higher, conventional hydrocarbon lubricant formulations aren’t enough.
For the difficult environments found in aerospace and aviation applications, for example, high-performance perfluoropolyether (PFPE) lubricants can perform under extreme temperatures, pressures and exposure to harsh chemicals. Often, advanced PFPE lubes are the only solution, but what about cases where hydrocarbon formulations can survive? In this case, there are still strong cost and performance advantages to going with higher performance products.
Consider the true cost of lubrication in manufacturing.
Maintaining Lubrication in Extreme Environments Machines can fail for any number of reasons, but improper lubrication is often a leading culprit. This is commonly due to environmental factors such as temperature, pressure or exposure to harsh chemicals, or due to a lack of scheduled maintenance and relubrication. Extreme environments pose a significant challenge for keeping machines properly lubricated. Steam turbine controls, for example, will see wear on cam shafts, valve lift bar anti-friction bushings and gears if they’re using conventional lubricants, leading to
| Continue toread the full article here || November 16, 2017 |||
15 Nov 2017 - Ara computing senior lecturer Amit Sarkar interviewed the top decision makers at 30 organisations that survived the Christchurch earthquakes, and found that Information Systems (IS) resilience was a major factor in their continued operation and successful recovery. This held true for large organisations and small organisations, both public and private sector.
Amit’s work impressed participants and jury at the European, Mediterranean and Middle Eastern Conference on Information Systems (EMCIS), where it was awarded best research paper this year. The paper Governing Information Systems Resilience: A Case Study is co-authored by Stephen Wingreen from UC and John Ascroft from Jade Software. Another paper in this series, CEO Decision Making under Crisis: An Agency Theory Perspective, is co-authored by Stephen Wingreen and Paul Cragg from the University of Canterbury, and was published in the Pacific Asia Journal of the Association for Information Systems (June 2017).
“Information Systems (IS) resilience is fundamental to an organisation’s survival,” Amit says. “In every organisation, if there is downtime in an organisation’s IS then there is a very slim chance that they will survive. Snail mail and paper-based accounting is almost obsolete. So the IS is quite central to the business. If the IS is down, if they can’t receive or send data and they can’t do any transactions, then what are consequences?”
Resilience is widely recognised in related disciplines such as Computer Science, Crisis Management and Safety Engineering, but there had been very little attention paid by Information Systems scholars to IS resilience. Business leaders who Amit interviewed told him that IS resilience was very important, but simply had not been documented.
Canterbury’s computing experts and business leaders have a lot of wisdom to share about business preparedness for disaster and Amit collated this using Q spot methodology to identify not only the most important factors in IS resilience, but also how decision makers prioritise these factors for resourcing.
Successful organisations, he found, had an IS resilience plan and, most crucially, they had practised it, challenged it and embedded it into the organisation.
“Good process means you are taking it seriously and practising it, trying to find the loopholes and debating, learning from the drills what went wrong and how to improve, so that when the real thing comes you are super ready. That cannot happen from reading the plan on the day. The plan goes out the window when the disaster strikes, so this is significant.”
Often basic preparation included migrating data to the cloud – something the city council fortuitously completed just four hours before the first, September 2010, earthquake struck. When there is no physical access to servers, then the cloud becomes essential for retrieving stored data.
Diversity and complementarity within the company was important to testing resilience plans for many eventualities and for practising problem solving. When a range of thinking styles was employed, IS resilience plans were more thoroughly tested. IS resilience is as much about people as it is about technology, Amit says.
“All the companies that survived put people in the centre. There is a huge emotional toll that happens and every single organisation in the study, including Ara, took care of the people, by making sure salaries are paid, checking on employees and so on. It’s a symbiotic relationship. If you look after your employees, they will look after your technology and processes.”
Not only did organisations need to be resilient themselves, but they had to choose partners carefully to ensure they were also resilient. Having robust systems would be pointless if the supply chain collapsed because other organisations were not prepared. This also applied to overseas partners.
An in-depth case study on Jade Software in Christchurch has now evolved into a proposal to develop an app to periodically check organisations’ resilience status. This could create a valuable tool that can be used in different countries and cultures, Amit says.
15 Nov 2017 - IrrigationNZ says that the petition presented by Greenpeace at Parliament yesterday misrepresents how irrigation has been funded and used and ignores the wide range of benefits to New Zealand from irrigation, as well as the efforts being made to address environmental issues.
“Greenpeace has presented a petition seeking to stop government funding of irrigation schemes. The petition is misleading as the majority of money provided to irrigation schemes by Crown Irrigation Investments has been in the form of loans which have to be paid back with interest,” says Andrew Curtis IrrigationNZ Chief Executive.
“The loan funding supports new irrigation schemes but also supports work to modernise existing irrigation schemes so they can use water more efficiently, something many people would support if they knew about it.”
Mr Curtis says the petition’s focus on irrigation being used by dairy farms does not fairly represent how irrigation is used in New Zealand. Over half of New Zealand’s irrigated land is not used for dairy farming but to grow crops, for sheep and pasture grazing, and for fruit, vegetable and wine production. Most dairy farms in New Zealand do not use irrigation.
“Modern irrigation schemes can also have a range of environmental benefits,” says Mr Curtis.
Trials by the Foundation for Arable Research have found that arable farms with irrigation leached less nitrogen than the equivalent dryland farms. On irrigated farms nutrients can be targeted to provide reliable plant growth which is not limited by soil moisture. Enhanced plant growth allows more nutrients to be used by plants, reducing the risk of leaching. Irrigation also promotes consistent ground cover (either crops or pasture) through the summer growing season, which reduces the risk of wind erosion of soil and surface sediment runoff. Sediment is a significant contaminant in waterways.
Irrigation schemes can be designed to protect river health – for example water from the Opuha Dam is used to supplement river flows to keep the river flowing during drought years and is released to mimic ‘natural freshes’ that flush-out algal growth in the Opuha River.
“The recent report on domestic vegetable production by HortNZ highlights that New Zealand needs to focus on ensuring there is a secure food supply for the future. Irrigation helps us feed our growing population, keeps food more affordable and allows a wider variety of local food to be grown throughout the year,” Mr Curtis adds.
“Irrigation will become even more important in the future to help reduce food shortages or price spikes due to droughts occurring more often as a result of climate change.”
Many irrigation schemes supply multi-purpose infrastructure with Oamaru, Timaru and Kerikeri all sourcing their town drinking water supply from irrigation infrastructure.
“Irrigation is vitally important to New Zealand’s economy and it contributed an estimated $5.4 billion to NZ’s GDP in 2016-17. For every 1,000 hectares of irrigation added, several New Zealand studies have found at least 50 new jobs are created. For high value horticulture, this increases to over 500 new jobs,” Mr Curtis says.
“New Zealand is a world leader in efficient, safe food production and irrigation plays an important role in this as well as in creating prosperous communities. Farmers and growers are now taking a wide range of actions on farms like fencing off waterways, riparian planting and developing farm environment plans which are already resulting in improvements to rivers,” says Mr Curtis.
Notes on sources:
(1) For information on trials by the Foundation for Arable Research see Irrigation is good for the environment
(2) Information on the Opuha Dam is online
(3) For HortNZ’s report see New Zealand vegetable production: the growing story
(4) For details of the economic contribution of irrigation to GDP, how irrigated land in New Zealand is used refer to IrrigationNZ’s website
(5) For studies on the link between irrigation and job creation see the Socio-Economic Value of Irrigation
(6) For Canterbury rainfall data see Land, Air and Water NZ
14 Nov 2017 - Portland’s year-long effort to attract regular liner services back to Oregon’s only container port took an important step forward Monday with the announcement that Swire Shipping will initiate a monthly service that will carry truck exports to Australia-New Zealand and containerized imports from Asia.
“It’s a first step, but a critical first step,” said Keith Leavitt, Portland’s chief commercial officer.” He added, “This is important to us because we have to demonstrate to the trans-Pacific that Portland is back to work.
In addition to its thriving breakbulk and bulk services, Portland for years was an important gateway for containerized exports from Oregon and western Idaho and imports of consumer merchandise, primarily from Asia. At its peak, Portland handled about 340,000 TEU a year.
Portland in 2012 began to experience labor problems when the International Longshore and Warehouse Union became engaged in a jurisdictional dispute with another union. That event escalated into a bitter, three-year confrontation between the ILWU and ICTSI, operator of Terminal 6 at the time. Productivity plunged as the ILWU engaged in work slowdowns that caused Hanjin Shipping, Hapag-Lloyd, and Westwood Shipping to end their liner services.
ILWU officials in Portland accused ICTSI, an international terminal operator based in the Philippines, of running Terminal 6 as a “third-world” operation. Bill Wyatt, the port’s executive director at the time, said the union was upset because when ICTSI took over operation of Terminal 6 in 2010, it began to pull back on wasteful and inefficient work practices that had been common for the many years that Portland managed the terminal as an operating port.
Leavitt said port managers the past year have had a number of meetings with the ILWU locals and they are confident that a return of shipping services will be greeted with improved productivity. “I feel like we’re in a good spot,” he said.
Swire Shipping, which is based in Singapore, will be in charge of handling containers at Terminal 6 when the service begins operating in January. Leavitt said Swire has no presence in Portland and may contract with a stevedore to discharge and load containers. The port will continue to contract with Harbor Industrial Services for the breakbulk stevedoring work. Port authority staff have been working with the ILWU to get the cranes and other cargo-handling equipment back into good working order, he said.
As a river port with draft limitations, Portland is unable to accommodate the mega-ships of 10,000-TEU capacity and greater that are common today at West Coast ports. Nevertheless, Portland is a good gateway for north-south services and niche carriers that do not operate mega-ships, Leavitt said. The base cargo for the new service will be trucks manufactured in Oregon by Daimler Trucks North America. Portland was once a profitable port for importers of containerized merchandise destined for importers in the region. Importers and exporters have been shipping most of their cargo the past two years through Seattle-Tacoma.
The new service will be triangular, carrying mostly non-containerized cargo and trucks from Portland to Australia and New Zealand. The vessels will steam to China and South Korea and will load containerized imports for Portland.
14 Nov 2017 - Freightways Limited (NZSE:FRE), a air freight and logistics company based in New Zealand, saw its share price hover around a small range of NZ$7.43 to NZ$7.93 over the last few weeks. But is this actually reflective of the share value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy?
Let’s take a look at FRE’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.