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AirAsia, the budget airline for Southeast Asia that’s headquartered in Malaysia, isn’t commonly associated with startup investments, but today the company announced that it has bought a 50 percent share in trip planning service Touristly in a deal worth MYR 11.5 million, or $2.6 million.
The deal will see AirAsia CEO Tony Fernandes join the startup’s board. Fernandes isn’t a stranger to Touristly since Tune Labs, an incubator program he is involved with, was one investor in its Series A round last May.
Touristly, which is also a Malaysia-based company, is taking the investment — a convertible loan — for “working capital and development,” the company said. AirAsia said it plans to let Touristly tap into its customer base of 60 million travelers through promotions on its website, in-flight magazine, in-flight advertising spots — yep, AirAsia has ads inside its cabins — and social media presence.
The startup was founded in 2015 and it is aimed at helping travelers plan and customize their holidays. It allows you to pick (and book) activities in cities across Asia Pacific, with a particular focus on China, India and Southeast Asia.
That mix, AirAsia hopes, will enable the airline to increase its revenue from ancillary services, which cover any costs beyond the price paid to book a flight. Already, low-cost carriers like AirAsia have unbundled flight prices to make them cheaper and more competitive, but they also bring in significant revenue through sales of additional items like preferential seats, in-flight meals and other services that are covered in the cost of traditional airfares but are broken out into separate options under low-cost carriers. A close alliance with Touristly could help AirAsia expand into an entirely new field of ancillary revenue related to trip activities and services that occur between a traveler’s outbound and inbound flights.
Touristly isn’t the only young company that wants to simplify holiday activity bookings. Back in March, Klook, a pan-Asia travel activities platform with a particular focus on China, closed a $30 million Series B round led by Sequoia China. In total, Klook has raised $36.5 million from investors and it has helped with five million bookings from users to date. Its focus is broader than Touristly, and co-founder and COO Eric Gnock Fah told TechCrunch it plans to expand into verticals like restaurants, wellness, shopping and look to expand its reach beyond Asia Pacific in the near future, too.