Budget carrier AirAsia expects to start air taxi business in 2022, CEO says

The company also plans to launch its e-hailing business in April as it pivots amid pandemic-driven challenges

AirAsia Group chief executive Tony Fernandes expects air travel to bounce back as nations around the world conduct mass vaccination programmes. Reuters

AirAsia Group, parent company of one of Asia’s biggest budget airlines, plans to launch a flying taxi service as soon as next year as it looks to diversify its business amid the coronavirus pandemic.

"We are doing drones today and AirAsia is not far away from the air-taxi [business]," said chief executive Tony Fernandes during an online discussion at Malaysia's Youth Economic Forum 2021.

“We are working on that.”

The Kuala Lumpur-based company is about a year and a half away from starting air-taxi operations, which will likely be a quadcopter with four seats, he said.

“We have pilots, we understand propulsion, we understand navigating the skies, so we have a team working on that right now,” he said.

Air taxis have captured the interest of both investors and airlines, but the industry is at a nascent stage and it has yet to be seen if they can be mass produced to help reduce aviation industry emissions and ease congestion.

Technology start-ups and major companies such as Boeing, Hyundai, Airbus, Toyota and Uber are in a race to develop commercially viable air taxis.

Last month, California-based electric aircraft developer Archer Aviation signed a $1 billion deal with United Airlines to supply it with 200 of its yet-to-be developed electric aircraft.

United estimates that Archer’s aircraft could help cut carbon dioxide emissions per passenger by 47 on a trip between Hollywood and Los Angeles International Airport – the route where Archer plans to launch an air taxi service by 2024.

AirAsia, which sold its India unit amid pandemic-driven challenges, is diversifying its business. It is set to launch its e-hailing services in April and expects its drone delivery business to take off in 2021.

AirAsia, which sold its India unit amid pandemic-driven challenges, is diversifying its business. It is set to launch e-hailing services in April and expects its drone delivery business to take off this year.

“You will be able to soon have a [drone] delivery to your home. I am hoping by the end of this year,” said Mr Fernandes.

Electric aircraft such as drones could account for 30 per cent of same-day package deliveries by 2040 as network scale dramatically brings down costs, according to LEK Consulting. Mr Fernandes expects air travel to bounce back as nations across the globe conduct mass vaccination programmes.

“I hope interstate travel [within Malaysia] will start in the next two to three weeks,” he said. “We are hearing people who have been vaccinated will [be] allowed to fly.”

He said international borders will probably begin to reopen in July or August this year.