March 29, 2011
Expedia-AirAsia union gives birth to Asian web booking business
Gracia Chiang, Singapore
THE REGION'S booming online travel market has pushed Expedia, Inc. and AirAsia to join forces and establish a 50:50 joint venture company, said to be the first of its kind between a low-cost carrier and an online travel agent.
Under the agreement announced today, a new company will be formed to operate Expedia-branded businesses in Japan, India, South-east Asia and other East Asian markets, as well as AirAsia's packaging and hotel booking websites, AirAsiaGo and GoRooms.
The joint venture will have the exclusive online third-party distribution rights in the region for AirAsia and AirAsiaX flights and travel packages. In addition, Expedia will also be the exclusive third-party travel provider for AirAsia inventory on its sites worldwide.
At the helm of the Singapore-based company is vice president and managing director of Expedia Asia Pacific, Dan Lynn, who will be relocating from Sydney.
Said the new CEO: "Expedia brings global strength in our supplier relationships, a very strong technology background and an understanding of online marketing. AirAsia complements that with its unique understanding of the Asian markets, its very compelling and unique inventory that is low-price but high-quality and its very deep understanding of social media."
AirAsia Group CEO, Tony Fernandes, said: "We think we have a 'Rolls-Royce partner' here. (Expedia is) going to take our content around the world, which will help AirAsia and AirAsiaX promote our flights in markets that we haven't reached before. Plus, we'll be able to get new ancillary income."
When asked if the partnership would cannibalise sales on AirAsia's own website, he said: "Who cares? AirAsia.com is a site that's always trying to cope. Everytime we have a sale, our system falls over even though we double, triple, quadruple the capacity. We can't cope with the demand. That's why I said there's no problem sharing some of that."
Fernandes explained that the Expedia and AirAsia sites would be branded differently and target separate market segments. For example, Expedia may be more dominant in certain countries like Japan, where it is already established, while AirAsiaGo would be bigger in China.
Calling this new venture Expedia's "Asia organisation", president of Expedia Worldwide, Scott Durchslag, said: "This is going to offer a much more efficient and effective alternative for consumers to travel, so I think it will have a significant impact on traditional, offline travel agents. This is a big leap forward in terms of what's possible."
Expedia, which rolled out its Singapore website last month, launched its Malaysia and Thailand products today. It will continue to run a full-service business, offering other airline content.
Copyright TTG Asia Media Pte Ltd © 2010
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