Thailand should simplify its cumbersome regulations on airline ownership to promote the growth of the industry in ASEAN, while the country has led pre-travel visa-free programmes since the pandemic, according to the CEO of Capital A and AirAsia, Tony Fernandes.
As companies migrate their supply chains to Southeast Asia, Fernandes warned that Thailand’s complicated regulations could daunt potential investors, despite the country’s efforts to create a business-friendly environment.
To achieve his vision of transforming his company into a truly ASEAN airline, the CEO suggested that the Thai government should revise the 49% equity ownership limit in a Thai company, adding that Thailand could lead the growth of the aviation industry by following the Philippines’ ownership example.
“It is inefficient for me to have 49% of ownership everywhere in ASEAN. My goal is to create a truly ASEAN airline, where 100% is owned by ASEAN shareholders. Thailand’s regulators have been very supportive, but (more) flexible rules could boost the growth in the industry and the tourism sector,” Fernandes said.
Thailand worth the investment
With strategies to diversify revenue streams across sectors, Fernandes has established logistics and e-commerce entities, adding that Thailand’s strategic location is conducive to establishing an engineering company for expanding servicing capacity for both his airline and others.
The CEO emphasised that major engine manufacturers, such as GE and Rolls-Royce, excel in engine production, but they need partners for maintenance and repair. He added that Thailand has the potential to become a service hub in Southeast Asia.
As Thailand is a food hub in the region, the airline is now selling its food outside of planes in Thailand through its own platform, according to the CEO, underscoring that the food business is another key focus area.
With the airline’s product consistency, the CEO noted that his company has remained competitive for decades, by providing great services and marketing strategies, despite fierce competition in the Southeast Asian market.
Fernandes also stressed that their transparency has earned trust from customers and passengers alike, while he admitted that there is criticism on social media. The CEO emphasised that there are no hidden agenda, adding that “I fly with another airline, if the flight of my airline is full. I don’t need to hide the truth.”
More opportunities for wholesale funding needed
Aaron Tan, the CEO of Carro, a Singapore-based AI-driven online car marketplace, underscored the challenges of obtaining financial support from Thai banks. While the platform has garnered wholesale funding in other Southeast Asian nations, such as Singapore and Malaysia, Tan noted that this remains a significant hurdle in Thailand.
“If I need financial support, I need to get funding from Japan or anywhere except Thailand, because the opportunity to get wholesale funding is pretty limited. We are not able to implement strategies of multi-financing in Thailand,” Aaron said.
To attract more start-ups to Thailand, the CEO suggested that restrictions on wholesale funding need to be lifted, arguing that the financial support for tech companies and start-ups can attract more entrepreneurs to the country.
Thailand is a special market
Despite implementation of similar strategies in other ASEAN markets, Tan highlighted that his company needs a tailored strategy in Thailand, since the engagement with customers is essentially different, adding that a social media-savvy population needs more than traditional approaches.
Different marketing tactics, particularly on platforms like Facebook and TikTok, targeting younger demographics, are necessary in the market, while traditional strategies in Singapore suffice, according to the CEO.
To ensure effective marketing, Tan said that hiring local talent is the best way, noting that the pool of talented labour in Thailand is full of experienced individuals with excellent education backgrounds at western universities.
With more than 60% of customers borrowing to buy a car on the platform, Tan opined that it is difficult for Thai people to acquire car loans due to stringent policies. He also noted the untapped potential of the unbanked population, stressing that integrating these groups into the formal credit system is key to unlocking further growth in the market.
Full interview with Tony Fernandes, CEO of Capital A and AirAsia
Full interview with Aaron Tan, CEO of Carro
