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AirAsia Opts for Oracle ERP Cloud to Streamline Financial Operations

When one thinks of disruption in the aviation industry, only a few names strike us. And perhaps the most dominant one of them is Air Asia. From a fleet of just 2 aircrafts and millions of dollars’ worth of debt, to over 250 aircrafts, covering 165 destinations in over 25 countries targeting a load factor of 85% in FY 2019 and flying over 100 million passengers yearly, AirAsia seems to be on course to be profitable across ASEAN this year.

With a time-bound mission to automate a lot of critical processes, and build a lean organisation fuelled by digital technologies, AirAsia recently announced a strategic partnership with Oracle to deploy its ERP Cloud. This deployment is targeted at streamlining the company’s finance operations.

Supported by a strong analytics-based forecast on passenger traffic and load factor in Q1 2019 and targeting a growth in revenue from ancillaries like RedCargo and Ourshop, the airline aims to centralise its financial functions and seek help from the data to further augment growth.

“For us, data and digital means precisely three things: One, it should give us insights so that we can take informed decisions. Two, We should be able to sell better, and give customers what they want. Three, basis data, we should be able to disrupt the disruptors, use our own platforms to build new businesses,” said Tony Fernandes, Group CEO of AirAsia during his media interaction at the recently concluded Oracle Open World Singapore.

We were the first airline to use Internet for business. We were the first one to make use of social media. However, in this age of disruption, I feel we are a bit behind the disruptors. To arrest the next phase of growth we have to shift gears. Be it agility, speed and innovation, we have to change the mindset to transform,” said Fernandes.

When asked, why Oracle over other application and cloud vendors, Fernandes gave a straightforward but convincing reply. “In the competitive landscape that we are in today, cost is the king. This system will allow us to monitor cost better. The benefits of saved money are transferred to consumers and delight them,” he explained. “When I met Loïc Le Guisquet and the leadership team of Oracle, I was totally convinced that this cloud-based solution will help us tackle our unique challenges. The leadership delivered on everything that was promised to us,” he said.

While this solution has helped AirAsia remove bureaucracy to enable faster decision, and keep hidden costs out of the system, Oracle ERP Cloud delivers the following key benefits:

Chart of Accounts and Enterprise Structure Modelling: Connects AirAsia’s distinct lines of business to enable smoother operations and improve decision making. The cloud solution also helps standardise the business processes across finance and procurement functions.

Revenue Accounting and Operational Systems Integration: Integrates with AirAsia’s existing business systems and to help provide the company with a single source of truth across financial and procurement functions.

Direct Operating Cost Controls: Enterprise Performance Management (EPM) Cloud helps it manage and improve global account reconciliation to define, author, review, and publish financial, management, and regulatory reports.

Robust Data Models to Compute and Analyse Route Contribution and Profitability: It facilitate core business analysis and reporting to help improve decision making and drive growth.

The deal also caught the attention of Oracle CEO Mark Hurd. “AirAsia has become a leading example of how technology can be used to optimise costs while enhancing the customer experience. Our ERP Cloud provides a foundation for AirAsia’s digital transformation momentum and will help strengthen their leadership in the ASEAN,” he said.

With over 6,000 customers globally, Oracle’s ERP cloud was declared the Leader in Gartner’s 2018 Magic Quadrant for Cloud Core Financial Management Suites for midsize, large, and global enterprises.

 

 

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