AirAsia’s cargo and logistics arm Teleport - previously known as RedCargo - and leading venture capital firm Gobi Partners have invested US$10.6 million in EasyParcel, a regional e-commerce and parcel delivery player, which has close to half a million users. It will use the Series B funding to expand its offering for small and medium enterprises (SME) customers.
The investment was announced by AirAsia Group CEO Tony Fernandes, Teleport CEO Pete Chareonwongsak, Gobi Partners Managing Director Malaysia Jamaludin Bujang and EasyParcel founder and CEO
Clarence Leong in Kuala Lumpur earlier this week.
Fernandes said the airline has about 50% to 60% belly space for cargo in an airplane, while 40% to 50% are for passengers’ bags. Of the 60% available belly space for cargo, AirAsia currently utilises only 15%.
Teleport CEO Chareonwongsak said the company is expected to increase cargo space utilisation by 5% within a year. Teleport currently contributes about 4% revenue or MYR 400 million (US$ 97 million) to the AirAsia Group and Chareonwongsak said he aims to double this number to MYR 800 million in the next twelve months.
Fernandes noted that he had always believed that AirAsia’s logistics business "has a huge opportunity to be part of the social and e-commerce ecosystem. Today, we are unlocking that potential with the help of EasyParcel, making parcel delivery across Asean more accessible and inclusive for everyone."
Interesting new business model
Founded in 2014, EasyParcel is an online booking platform for parcel deliveries that allows users, mostly SMEs, to arrange for delivery from multiple established courier companies at an affordable rate. The firm has a presence in Malaysia, Singapore, Indonesia, and Thailand, and it has an average shipping volume of one million parcels per month.
EasyParcel said that the funds would be used to leverage Teleport’s logistics assets and infrastructure capacities which include more than 10,000 AirAsia flights per week to over 100 cities. AirAsia’s passenger fleet has more than one million tonnes of cargo capacity.
Enlarging the client base
EasyParcel wants to strengthen its presence in its existing markets and aims to reach a new customer segment, traditional SMEs, in addition to its online business customers.
Teleport's investment is funded from retained earnings, whilst Gobi Partners makes its investment through the Meranti Asean Growth Fund, a fund which seeks to invest in Asean innovation such as cloud services, e-commerce and financial technology.
Joint effort for taking over Malaysia Airlines…
In another development involving Air Asia, Malaysian media reported that AirAsia co-founder and former chairman Datuk Pahamin Ab Rajab is leading a group gathered under the umbrella of Najah Air Sdn Bhd that is seeking to raise RM1 billion believed to be for their attempt to take over ailing Malaysia Airlines.
The Edge reported that the group is seeking a loan for the sum from a Japanese lender. The paper also reported that Tan Sri Syed Azman Syed Ibrahim of Weststar Group, who is also eyeing Malaysia Airlines, had contacted Najah Air to discuss possibly pooling their resources for a joint takeover.
… but the revitalization plan is met with skepticism
Interest in a possible takeover of Malaysia Airlines erupted after Prime Minister Tun Dr Mahathir Mohamad indicated that the carrier may be sold as the government could no longer continue bailing it out.
However, Dr Mahathir also said that the suitors so far have not convinced him of their ability to revive the struggling airline.
After continued chronic losses, Malaysia Airlines endured two major incidents in 2014 when it lost Flight MH370 and Flight MH17. The two disasters effectively doomed the previous revival of the airline and forced government-owned investment arm Khazanah Nasional into its latest rescue plan that included delisting Malaysia Airlines from the local stock exchange.
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