Sustainability

Statement
Introduction
About This Report
Capital A Berhad is pleased to present our annual Sustainability Statement, which provides an overview of our economic,
environmental and social (EES) approach, performance and achievements for the year 2021. This follows from our previous
Sustainability Statement for the year ended 31 December 2020.

Over the past three years, sustainability reporting has become a fundamental component for us to demonstrate our
ability to manage sustainability risks and opportunities, and create value for our stakeholders.

This year, we strengthened our commitment through an in-depth materiality exercise and by addressing identified gaps
of our sustainability performance with relevant sustainability indices.

Reporting Framework & Guidelines

This report has been prepared based on Bursa Malaysia Securities Berhad (Bursa Malaysia)’s Main Market Listing Requirements
with guidance from its Sustainability Reporting Guide (2nd Edition). We have also prepared this report in accordance with the
Global Reporting Initiative (GRI) Standards: Core Option. By incorporating GRI Standards, this report meets the GRI principles
of stakeholder inclusiveness, sustainability context, materiality and completeness.

Other frameworks and guidelines taken into consideration include:

• FTSE4Good Bursa Malaysia (F4GBM) Index
• Dow Jones Sustainability Index (DJSI)
• Task Force on Climate-related Financial Disclosures (TCFD)
• United Nations’ Sustainable Development Goals (UN SDGs)

Reporting Scope and Boundaries

This report covers the sustainability performance of Capital A and its subsidiary companies from 1 January 2021 to 31 December
2021, unless stated otherwise. Throughout the report, ‘the Group’ refers to Capital A while each subsidiary is referred to by
its own name, and the airlines collectively are referred to as ‘AirAsia’.

Disclosures in this report cover AirAsia Malaysia (MAA), AirAsia Indonesia (IAA), AirAsia Philippines (PAA), airasia Super App,
Teleport and BigPay, unless stated otherwise.

All monetary values reported in this report are expressed in Ringgit Malaysia (RM), consistent with the Malaysian Financial
Reporting Standards.

Forward-Looking Statements

This report contains forward-looking statements which reflect the Group’s expectation of future value creation as well as
financial and non-financial performance. Such forward-looking statements involve known and unknown risks, and are therefore
uncertain in nature. This could result in actual results differing from those stated in the forward-looking statements.

Assurance

To ensure the accuracy and integrity of our disclosures, this report has been reviewed by the Sustainability Working Group
(SWG) across Capital A, and validated by the Board of Directors and Risk Management and Sustainability Committee. Moving
forward, we aim to obtain external assurance of our sustainability statement.

Contact Us

Feedback from our stakeholders is valuable to us to continually improve our reporting. We therefore welcome any feedback
or comments and request that stakeholders direct these to the following email: sustainability@airasia.com
Tackling Climate Change: Path towards Net-Zero

We are committed
to ensuring not only
that we build a
sustainable airline
but that we apply the
same principles to all
businesses under the
Capital A umbrella.

This year, we made great progress towards

a net zero future through the following new
initiatives:

• Expanded the emissions-tracking scope

of the Carbon Offsetting and Reduction
Scheme for International Aviation (CORSIA)
to include all domestic flights
The 26th annual summit of the United Nations Climate Change • Developed financial models to analyse
Conference of the Parties (COP26) held in November 2021 the impact of introducing carbon offsetting
concluded with all parties agreeing to keep the 1.5 degree and sustainable aviation fuel utilisation
temperature rise cap alive and to scaling up action on dealing to air fares
with climate impacts. Responding to the urgency for global climate • Developed a blueprint for achieving net
action, our sustainability priorities now include strengthening our zero emissions
climate strategy while continuing to ensure the health and safety • A c c e l e r a t e d t h e G r o u p ’ s d i g i t a l
of guests and employees for as long as Covid-19 remains pandemic. transformation to enhance efficiencies
and safety processes while reducing our
We are fully aware of the heavy scrutiny on the aviation industry’s carbon footprint across our network
carbon emissions. In the last two years, along with pandemic- • Identified our climate-related risks and
induced travel restrictions across the world, our carbon emissions opportunities to begin our alignment with
dropped by more than 90% while waste generation was reduced the Task Force for Climate-related
to a minimum. However, the situation will reverse once the travel Financial Disclosures (TCFD) framework
industry recovers, hence we reviewed our climate strategy to put
in place mechanisms and processes that will help deliver the Moving forward, we will continue to increase
aviation industry’s target of net zero by 2050. Given that Capital awareness of sustainability and the
A is now a diversified group, we also began the process of importance of climate change across our
identifying key ESG issues relevant to our new lines of business. business operations. At the same time, we
We are committed to ensuring not only that we build a sustainable will strive to adopt more practices that can
airline but that we apply the same principles to all businesses further minimise our carbon footprint. Details
under the Capital A umbrella. of our initiatives are available in the
Environment section of this report (pages
120-136).
Sustainability Governance
At Capital A, the Board of Directors has overall responsibility for sustainability and Throughout the reporting year, the
setting the Group’s strategic direction, including matters involving climate strategy. To SWG and the Board convened to
further strengthen our sustainability governance, the remit of the Board’s Risk discuss the following matters:
Management Committee was expanded to include oversight of sustainability matters
and renamed the Risk Management and Sustainability Committee.
Review of key stakeholders,
The Board is supported by the Sustainability Working Group (SWG), which comprises material matters and
heads of departments and lines of business (LOBs) across the Group. The SWG is materiality matrix
chaired by the Head of Group Sustainability, who takes the lead in managing
sustainability targets by collaborating closely with various departments and internal
functions within Capital A. Sustainability strategy,
targets and initiatives
The SWG was also revamped and slimmed down for greater effectiveness. Since our
focus in 2021 was to strengthen our climate strategy, the SWG includes heads of
departments/LOBs with direct deliverables on reducing emissions, cutting waste and Sustainability reporting
greening our operations. Henceforth, membership of the SWG will be reviewed annually performance and updates
by the Head of Group Sustainability to reflect our targeted priorities for the year.

Capital A Berhad Board of Directors

Risk Management and Sustainability Committee

Sustainability Working Group (SWG)

(Chaired by Head of Group Sustainability)

Operations Procurement Information Security Strategy & Growth

People
Risk Management Finance Legal
& Culture

AirAsia airasia
BigPay Teleport
Foundation Super App

Governance Level Responsibilities

• Provides oversight of the Group’s overall sustainability strategy and direction

Board of Directors • Has overriding authority as the ultimate decision-making body to endorse activities on
sustainability matters for the Group and its stakeholders

• Oversees the entire Group’s sustainability performance

Risk Management and
• Integrates sustainability into strategic decisions by taking into account EES impacts arising
Sustainability Committee
from business operations

• Identifies, assesses, evaluates, manages and reports on current and emerging sustainability
Sustainability Working risks and opportunities relevant to the Group
Group (SWG) • Implements approved sustainability initiatives across the Group
• Monitors the Group’s sustainability performance
Stakeholder Engagement
We define our stakeholders as those we impact through our operations as well as those with a vested interest in our
operations. Our stakeholders are grouped into 10 categories with which we maintain open and ongoing dialogue through
various engagement channels.

Stakeholder Group Engagement Channels Areas of Interest How We Respond

• Board meetings • Financial performance • Focus on enhancing our

• Annual General Meetings • Corporate governance (CG) branding and expanding
• Corporate events & strategies lines of business
Board of Directors • Business development & • Sustainability practices
partnerships
• Human capital
management
• Environmental practices

• Social media • Diversity, inclusion & equal • Foster inclusivity and

• Employee appraisal opportunity positive relationships
• Community engagement • Corporate Governance (CG) through employee
Employees (Allstars) • Online surveys practices engagement programmes
• Townhalls • Training & career • Provide frequent updates
• Cultural, sports, well-being development on the Group’s
& appreciation events • Work-life balance performance and changes
• Open office layout • Fair remuneration & in policies and procedures
compensation • Provide various training
• Security, safety & welfare and skills enhancement
opportunities
• Ensure fair compensation
• Provide safe and healthy
working environment
• Daycare centre/creche

• Regular meetings • Agreeable contracts and • Strengthen partnerships

• Financial institutions & terms with agreeable contracts
aircraft investor credit • Service delivery and cost and terms
Business Partners roadshows • Risk management
• Workshops & seminars • Regulatory compliance
• Global aviation finance
conferences
• Technical support based in
RedQ
• Commercial support with
GE based in KL & Airbus
based in Singapore

• Continuous customer • Customer experience • Provide fast and prompt

satisfaction surveys • Process efficiency attention to customer
• Online submissions • Competitive pricing & needs
Customers (Guests) • Customer support live chat experience throughout • Continue to increase
channels physical/digital journey customer satisfaction
• Social media channels • Data privacy & security through process efficiency
• Messenger channels • Safety & well-being • Protect customers’ data as
• AirAsia sales offices, travel • Loyalty rewards well as their health and
& service centres safety
 Stakeholder Group Engagement Channels Areas of Interest How We Respond

• Investor meetings & • Financial performance • Actively communicate with

conference calls • CG practices investors
• Annual General Meetings & • Strategies • Provide timely updates on
Investors Extraordinary General • Brand management business performance &
Meetings • Operational performance strategies
• Investor Relations website • Health & safety • Focus on enhancing our
• Investor briefings by Senior • Customer relationship branding and expanding
Management management lines of business
• Innovative initiatives • Ensure safe & healthy
• Environmental management working environment
• Sustainability practices

• Analyst briefings • Financial performance • Continued engagement

• Analyst meetings & • CG practices with analysts
conference calls • Strategies • Timely updates on business
Market Analysts • Media interviews & • Brand management performance & strategies
releases • Operational performance • Focus on enhancing our
• Investor Relations website • Guest experience branding and expanding
• Data privacy & security lines of business

• Regular dialogue through • CG practices • Engage closely with

face-to-face meetings & • Policy & regulatory regulators and
official correspondence compliance governmental bodies
Regulators/ • Parliamentary sessions • Risk & crisis management • Announce or report
Government Bodies • Formal meetings with • Data privacy & security relevant information in a
government officials • Environmental management timely manner
initiated by Capital A • Maintain standards and
• Tours and familiarisation certifications
visits to Capital A

• Corporate community • Ethics & integrity • Create support system for

programmes • Innovation social enterprises
• Funding of social • Job creation • Actively communicate with
enterprises through AirAsia • Economic development social entrepreneurs
Social Enterprises
• Increase employability and
Foundation
job creation
• Regular dialogue and • Provide a platform for
engagements social enterprises to market
their products

• Regular dialogue and • Agreeable contracts & • Ensure consistent

reviews terms communication with
• One-to-one meetings • Service efficiency, value, suppliers on contracts and
Suppliers delivery & cost supplier code of conduct
• Health & safety • Compliance with required
policies
• Provide safe and healthy
workplace

• Community development • Community engagement • Undertake empowerment

programmes • Rural development & programmes, volunteerism
• Corporate social empowerment and donations
Local Communities responsibility initiatives • Environmental impact • Provide humanitarian
• Partnerships and employee assistance and post-
volunteerism disaster relief
• Websites and social media
platforms
Association
Since 2020, the Group has been a member of CEO Action Network (CAN), a peer-to-peer informal network of CEOs that
focuses on sustainability advocacy, capacity building, action and performance. Through this working group, peers across
various sectors are able to forge partnerships and share their knowledge and best ESG practices.

Our Material Sustainability Matters

In FY2021, we refreshed our material matters to better align our strategies and improve our performance and reporting
disclosures. We conducted a comprehensive materiality survey which included engagement with 472 internal and external
stakeholders in order to better understand their ESG expectations.

Identification
1 Prioritisation
2 Validation
3
We conducted an internal review We engaged our internal and The materiality matrix was
of our 10 material matters from external stakeholder groups and presented to the Board for its
FY2020 and analysed sustainability distributed an online materiality review and validation.
issues based on current and assessment survey for them to rank
emerging risks & opportunities, the nine material matters based
publications associated with on the importance to our
airlines/digital industries and stakeholders as well as our
against relevant sustainability business operations. Results of the
indices. A total of nine material assessment were plotted on a
su s t a i na b i lit y m a tte r s w e r e materiality matrix graded from
identified. medium to high importance.

2021 Materiality Assessment Updates

High

Corporate Governance • Renaming several material matters for better

Group strategy (eg renamed Customer
Influence on Stakeholder Assessments and Decisions

Supply Chain Management Health & Safety

Relationship Management to Guest Experience;
Technology, Innovation Human Capital Development to Talent
Waste Management
& Information Security
Attraction & Retention; and Corporate
Community Investment Citizenship & Philanthropy to Community
Investment).
Guest Experience
• Technology & Innovation and Information
Climate Strategy Security Privacy are now combined and named
Technology, Innovation and Information Security
Talent Attraction & Retention
as they are interdependent in nature.
• Climate-related Risk Management is replaced
by Climate Strategy to cover aspects of our
fleet management, operational eco-efficiency,
carbon offsetting and sustainable aviation fuel
strategy.
• Addition of Waste Management as a separate
material matter.
• Health & Safety remains one of our top-three
priorities amidst the Covid-19 pandemic.
• Increasing prioritisation on Corporate Governance,
Technology, Innovation & Information Security,
Medium

Talent Attraction & Retention, Community

Investment and Climate Strategy.

Medium Significance of Capital A’s EES Impacts High Moving forward, we aim to develop a key performance
indicator for our material matters to better measure
Economic Environmental Social our progress, impact and value creation.
Our Contribution to the SDGs
The Group has maintained our commitment to the UN SDGs since the launch of the global
agenda in 2015. While supporting all 17 SDGs we are particularly focused on six goals. In the
table below, we align the six SDGs to initiatives conducted in 2021.

SDG SDG Targets Our Progress in 2021

5.2 Eliminate all forms of violence against women & girls, • Launched women mentorship programme
including trafficking & other types of exploitation • Conducted first ever Diversity, Inclusion
5.5 Women’s full and effective participation & equal and Belonging survey in five languages
opportunities for leadership at all levels • Updated anti-trafficking training module
• Conducted gender pay gap analysis

8.2 Achieve higher levels of economic productivity through • Conducted a series of mental health
diversification, technological upgrading & innovation webinars
8.3 Encourage the growth of micro-, small- and medium- • Conducted neurodiversity awareness/
sized enterprises webinar
8.4 Improve global resource efficiency in consumption & • Successfully opened a PPV station for
production, and endeavour to decouple economic Allstars and family members at RedQ, with
growth from environmental degradation a total number of 920 vaccinated
8.5 Achieve full & productive employment and decent • At RedHouse, 1,689 of Allstars successfully
work for all received their vaccination shots
8.7 Take effective measures to eradicate forced labour, • Employment for young people: 31%
end modern slavery & human trafficking employees below 30
8.8 Protect labour rights & promote safe and secure • Decent work environment for employees
working environments for all • Social entrepreneurship support via AirAsia
8.9 Devise and implement policies to promote sustainable Foundation
tourism that creates jobs and promotes local culture
& products

9.1 Develop quality, reliable, sustainable & resilient • Officially launched FACES at klia2 for
infrastructure to support economic development and guests to enjoy contactless journey on
human well-being, with a focus on affordable & AirAsia flights
equitable access for all • FACES on the Super App; registration for
9.3 Increase the access of small-scale industrial & other Allstars to ensure a fully digital travel
enterprises to financial services, including their experience
integration into value chains & markets • BigPay applied for BNM’s digital banking
9.4 Upgrade infrastructure & retrofit to make them licence
sustainable, with increased resource-use efficiency • Paperless aviation
and greater adoption of clean & environmentally • Partnerships with Google, GE and Oracle
sound technologies
9.5 Enhance scientific research, upgrade the technological
capabilities of industrial sectors by encouraging
innovation
SDG SDG Targets Our Progress in 2021

11.2 Provide access to safe, affordable, accessible & • AAF collected over RM500,000 for its
sustainable transport systems to all Malaysia Flood Relief Campaign
11.4 Strengthen efforts to protect & safeguard the world’s • #AllstarsDoGood programmes
cultural and natural heritage • Post disaster relief campaigns/programmes
11.5 Reduce the number of deaths & the number of people by AAF
affected, and decrease the direct economic losses • Low-cost carrier offering affordable access
relative to global gross domestic product caused by to air transport - “Now everyone can fly”
natural disasters • Sustainable travel

12.2 Achieve sustainable management & efficient use of • Monitored waste management processes
natural resources including recycling options available
12.3 Halve per capita global food waste at the retail & • Sourcing of biodegradable packaging
consumer levels, and reduce food losses along • Continuous monitoring of resource
production & supply chains consumption
12.5 Reduce waste generation through prevention, reduction, • Low-water use toilets and washroom
recycling & reuse facilities in offices
12.6 Encourage companies to adopt sustainable practices • Efforts to reduce single-use plastic in
& integrate sustainability information into their offices
reporting cycle • Waste separation at RedQ
12.7 Promote public procurement practices that are • Reduce inflight food wastage
sustainable, in accordance with national policies & • Carpool programme
priorities • Suppliers Code of Conduct and qualification
procedure promote responsible
environmental practices across the value
chain

13.2 Integrate climate change measures into strategies & • Actively engaged with relevant partners
planning for sustainable aviation fuel and carbon
13.3 Improve education & awareness-raising on climate offsetting options
change mitigation, adaptation, impact reduction & • Sustainable fleet management by ordering
early warning the latest aircraft type (A321neo) and
actively engaging with vendors to develop
zero-emissions aircraft
• Monitoring, Reporting and Verification
(MRV) of carbon emissions
• All AOCs participated in CORSIA
• Identified climate-related risks and
opportunities
• Enhanced the Carbon Dashboard to track
Capital A’s carbon emissions
• Adjustments to lights-on times according
to working hours, through an automatic
shutdown system
 Economic
CORPORATE GOVERNANCE

We maintain a strong culture of integrity and transparency, supported by a robust corporate governance framework. This
framework comprises various policies that guide everyone in Capital A towards ethical behaviour when dealing with our
stakeholders, reflecting our values and upholding our reputation.

Policies that guide the way we conduct our operations Group-wide

Policy What It Is Introduced/Last Updated

Code of Conduct Guidelines that clearly outline the standards of ethics expected 2020

Anti-Bribery and Guidelines to prevent bribery and conflicts of interest, addressing: 2020
Anti-Corruption Policy gifts & hospitality; dealings with partners, suppliers & public officials;
political contributions; sponsorships & charitable donations; facilitation
payments

Whistleblowing Policy Platform for Allstars and third parties to report any instance of 2018
unethical behaviour, while protecting whistle-blowers from reprisals

Conflict of Interest Guidelines and procedures on situations such as receiving or offering 2016
Policy gifts, with the objective of enabling accountability and transparency

Non-disclosure and Guidelines to protect the Group’s confidential and proprietary 2018
Confidentiality Policy information

Disciplinary Policy Procedures to handle any breach of established norms/Code of 2021

Conduct

Workplace Search Gives the company the right to conduct searches on Allstars to 2008
Policy prevent misconduct

Remuneration Policy Provides clarity on remuneration structures and practices for Board 2020
of Directors and Allstars

Board Diversity Policy Guidance to achieve sufficiently broad representation on the Board 2018
for balanced and fair decision-making

Anti-Harassment Policy Provides guidelines on the establishment of in-house mechanisms to 2021

prevent and eliminate any forms of harassment involving the Allstars

[For more information on our Corporate Governance, please refer to the Corporate Governance Overview Statement on
pages 163 to 173]
Ethics & Integrity
All directors and employees at Capital A are expected to comply with the Group’s Code of Conduct and Ethics (the Code).
The Code addresses aspects such as confidentiality of information, conflicts of interest, money-laundering and/or insider
trading/dealing, environment, health and safety and whistleblowing.

Developed by the Group’s People Department, in November 2021 the Risk Management Department (RMD) was assigned to
look at Group-wide compliance. Through a compliance exercise and matrix, RMD will develop a central compliance repository
(internal & external) for better monitoring. To ensure effective communication on policies and procedures, all new hires are
introduced to the Code during their onboarding sessions and are required to acknowledge the Code online. Moving forward,
we aim to conduct refresher training on the Code and develop an e-learning module to reinforce a culture of integrity.

To ensure adherence to these policies, we encourage Allstars throughout the Group to speak up and report any incidents that go
against the grain of the standards we seek to achieve. There are two main channels through which they can do this:
• askPAC System: a chatbot where they can raise concerns on unfair or discriminatory treatment, and every query will
generate a serial number for easy tracking. All reports are directed to the Employee Relations team.
• Whistleblower channel: where Allstars and any other stakeholder can send emails in confidence via whistleblower@airasia.com,
which is managed by our Internal Audit team. Concerns related to employment matters will be redirected to Employee Relations.
For more information on our Whistleblowing channel, please refer to https://capitala.airasia.com/whistleblowing_channel.html.

Types & incidence of breach in ethical behaviour

Types of Breach Total Actions Taken

Harassment 2 Termination of Employment

Fraud 9 Warning, Final Warning, Termination of Employment

Misappropriation of company assets/funds 1 Warning

Abuse of company benefits/property 0 –

Others (eg breach of internal SOPs, attendance, late to work) 117 Warning, Final Warning, Termination of Employment

Whistleblowing Channel
In 2021, we received a total of 19 reports via our whistleblowing channel concerning abuse of authority/benefits (three
reports); misappropriation of company assets/funds (one); and others (15). These cases were investigated and dealt appropriately
with follow-up actions.

Anti-Bribery & Anti-Corruption (ABAC)

Capital A does not tolerate any form of bribery or corruption. When we revised our ABAC Policy in 2020, in response to
Section 17A of the Malaysian Anti-Corruption Commision (MACC) Act 2009, we ensured all Allstars were aware of the Policy
and the seriousness of a breach. Our ABAC Policy is available to all employees via the Group’s intranet, RedDocs, and our
official website.

Corruption has the potential to severely undermine our business, therefore RMD continuously monitors the Group for any
potential corruption risk. In the last four years, two cases of bribery/corruption were proven. These were managed as per
outlined procedures, with warning letters and dismissal, if warranted.

Risk Management
Over the last year, RMD has worked to transform what used to be a very theoretical approach to risk and business continuity
management to one that is more practical and people-friendly. This has been achieved through updating and automating
our risk and business continuity management using RedRadar, our risk management system. More interactive, the system now
sends reminders to accountable personnel of due dates for risk assessments, complete with an escalation process that creates
accountability should the risk assessment not be completed on time. To ensure the relevant people are able to use RedRadar
optimally, training was provided to heads of department and stations as well as designated risk personnel. In addition, risk
awareness training was provided to educate Allstars on what constitutes risk and how to assess risks. Our ultimate objective
is to create a risk-aware culture that permeates our daily activities and functions.
Risk awareness training for employees

Training Description Number of Attendees

Risk To educate personnel on how to

identify and assess risk
650
Awareness

RedRadar On how to use the risk

management system
650
System

Four main risk categories are assessed on a quarterly basis: Financial, Operational, Strategic and Compliance Risks. Within
these broad risk categories, emerging and long-term risks are identified and tracked.

Long-term risks identified

Category Emerging Risks Description Impact Mitigation Actions

Strategy Regulatory Risk Change in regulatory Regulatory changes that Continuous monitoring of
structure could change the regulatory changes
business strategy

Operational Human Capital Risk Succession planning and Business continuity Identification of
succession management successors

Financial Financial Risk Financial sustainability Business continuity Financial analysis on any
business decisions

Business Continuity Management

Business Continuity Management, which entails having a Business Continuity Plan (BCP), is a crucial component of our risk
assessment as it involves the assessment of key functions – ie our people, processes and systems – utilising the Business Impact
Analysis (BIA) framework. Through BIA, we are able to ascertain the severity, urgency and impact of any failure in the Group’s
function(s). Heads of all key function areas proactively review the BCP on a half-yearly basis.

In 2021, in response to extreme climate events in Thailand and the Philippines, we undertook BCP exercises at Bangkok’s Don
Mueang Airport and the Cebu, Puerto Princesa and Tacloban airports in the Philippines.

AirAsia Thailand Flood Scenario Readiness Simulation at Don Mueang (DMK) Airport, Bangkok

Test
No. Test Activity Departments Test Date Test Findings
Location

1 Planned flood Don All Operations 12 October 2021 • All departments confident of the level of
scenario Mueang departments handling of the floods
readiness (DMK) • Reactive approach is in line with the available
simulation response plan for diversion and mobilisation of
aircraft/fleet

2 Unplanned Virtual Flight 21 December 2021 • Partial assets were unserviceable due to water
Flight meet Operations damage
Operations (Google) • Ability to carry out operations as per business-
mobilisation as-usual with remaining equipment
(recurrent from • No adverse impact on operations as rostering
2019 exercise) covered work from home during the event
AirAsia Philippines Business Continuity Activation during
Typhoon Rai (Odette)
On 18 December 2021, the BCP was activated for Cebu (CEB),
Puerto Princesa (PPS) and Tacloban (TAC) stations in response
to Typhoon Rai. The cities of Cebu and Tacloban were severely
impacted, experiencing loss of telecommunications infrastructure
and disruption of electricity and water supply in many areas.
However, the airports were still accessible and powered by
generators, enabling the teams to access internet and
communications infrastructure to operate flight-related systems.
No AirAsia aircraft was stranded or based in these stations
at the time of the incident, and no major equipment damage
was reported.

While we continued situational monitoring, our teams in Manila

loaded essential supplies such as food and sanitation items Distribution of essential items to Allstars as flights resume
for affected Allstars on our first flight into Cebu after the at PPS airport
typhoon.

Impacted
Test Activity Departments Date Outcome/Results
Locations

BCP activation Cebu (CEB), Ground 18 December 2021 BCP was activated in tandem with transportation of
– Natural Puerto Operations essential supplies to Cebu
Disaster: Princesa Flight
27 December 2021 All staff accounted for and reported safe
Typhoon (PPS), Operations
Business-as-usual restored in Cebu for arrival and
Tacloban Cargo
departure flights including mobilisation of reservists
(TAC) Communications
Airports 11 January 2022 Stand down of PAA Red Code

Following a review of the BCP activation, it was determined that satellite phones and generator sets should be provided to
all Philippines stations that are susceptible to prolonged power cuts and telecommunications disruptions due to natural or
climate-related disasters.

GUEST EXPERIENCE

Despite severe disruption to air travel during the year, we continued to be guest-obsessed and ensured that all guests who
flew AirAsia had the best possible experience from the time they booked their flights until they left the aircraft at their destination.

The happiness of our guests is the sole function of our Customer Happiness (CH) Team. The team, which has been ISO
1002:2018 (Customer Satisfaction, guidelines for complaints handling)-certified, has access to an Empowerment Matrix that
helps them resolve issues and complaints as these are reported.

In 2021, we transitioned 95% of our CH Allstars to working from home. For our team’s own happiness and well-being, daily
huddle calls were organised while team leaders actively monitored work and rest hours to ensure a healthy work-life balance.
In addition, starting 2020, all Allstars, including CH team members have access to our internal peer support team for assistance.
Allstars requiring support may reach out anonymously via our EkoChilli platform and a peer supporter will respond via their
preferred communications channel within 24 hours.
Communication with Guests
The CH team oversees all inbound customer support through multiple online channels: website, airasia Super App, social
media (Twitter, Facebook and Instagram) and messaging (WeChat, WhatsApp and Messenger) platforms.

During the year, two new services were added to further enhance our communication efficacy:

Flight disruption automation Instagram messaging

Guests are now notified instantly of any flight Our chatbot AVA was introduced to Instagram Direct
cancellation or schedule changes via SMS and Message to reply instantly to guests. Previously, the
emails. process was managed manually by our agents.

Moving forward, we will enhance My Bookings to present a simplified self-service platform enabling guests to amend details
of their flights. We also plan to introduce more inbound customer contact channels such as AirAsia Chat and voicebot for
greater customer choice.

Enhanced Guest Services

For a better contactless customer experience, the following initiatives have been implemented:

FACES: This first-of-its-kind in the commercial airline world facial recognition technology provides a contactless and seamless
experience to guests at all touchpoints in their journey.

Galaxy Suite: This new platform hosts multiple systems that are required for Ground Operations functions such as check-in
and FACES identification verification. AirAsia Guest Services staff at all 16 Malaysian airports are now able to assist guests
to check-in and verify their documents using the app on their mobile devices without requiring guests to be physically present
at a check-in counter. This enables us to deploy additional staff to quickly address long queues
and check-in bottlenecks without having to open additional counters.

Contactless Payment: We introduced electronic data capture (EDC) machines including

tap2phone to enable guests to pay securely via eWallets, payWave, etc. COMING SOON!
Soon, our guests will be able
Health Travel Pass (HTP): To facilitate travel during Covid-19, HTP verifies health to scan their required visa for
documents such as vaccination certificates and RT PCR results during self check- international sectors and
in (both mobile and web). complete their check-in in the
comfort of their home. They will
airasia Super App: For a faster and smoother check-in experience, we added also be able to use FACES at more
a quick search function for passenger name record (PNR), online health declaration touchpoints, such as at the
and new boarding passes. A download and share option was also included. check-in counter and
self-baggage drop.
Net Promoter Score (NPS)
We have been monitoring our NPS since 2017. Emails are
sent to guests before and after their trips for feedback on
both their booking and flying experience with AirAsia. Their 99% Covid-19
feedback informs us of how happy they are with our service
refund resolved
and how likely they are to recommend AirAsia to others. The
index ranges from -100 to +100, minus scores indicating that
customers would not recommend the company.
88% credit
Our NPS has risen significantly from 2017 to 2021, indicating accounts utilised
positive and effective outcomes of efforts to ensure our guests
are happy throughout their journey with AirAsia. As we have
*as of Q1 2022
exceeded our target NPS scores for two years in a row, we
are raising our target from 2022 onwards to 60 and above.

Year NPS Score Target

2017 17 NA

2018 31 NA

2019 38 NA

2020 52 50

2021 60 50

Awards
Awards validate our efforts to give the best value and experience to our guests all the time. In 2021, we continued to receive
local and global recognition from well-known industry monitors. Awards during the year included:

World’s Leading World’s Best Low-Cost Business Innovation

Low-Cost Airline at Airline at Skytrax Award at the Airline
World Travel Awards World Airline Awards Strategy Awards

Silver Award Gold for Best

in Transportation, Innovation and
Travel and Tourism Technology at the
category at the Putra Contact Centre Asia
Brand Awards Pacific Awards
On-Time Performance (OTP)
Key to keeping our guests happy as repeat customers is to ensure that our flights take off on time. Our OTP performance
is closely monitored using digital tools and management walkabouts. Among the technologies implemented are an analytical
toolset that provides greater visibility of OTP factors and other supplementary metrics that affect performance. Our team
also applies a delay prediction algorithm to map out potential delays up to four hours in advance.

This early notification adds a buffer allowing our Operations teams to apply solutions that help mitigate and minimise the
impact of delays. It also enables our Customer Happiness team to notify guests in advance so they are able to adjust their
travelling plans, while our Guest Services team adjusts manpower allocations to ensure check-in counters are adequately
staffed.

To monitor performance, weekly and monthly OTP reviews are held by all our AOCs. To continuously improve our service, we
set the Group’s OTP target at 85%. Our OTP for the period between 2019 to 2021 is shown in the table below.

AirAsia Load Factor and On-Time Performance, 2019-2021

Measure
Indicators
2019 2020 2021

Load factor for short-haul (<6 hours) (%) 85% 75% 74%

Percentage of short-haul flights (<6 hours) with more than 15 minutes delay 22% 15% 20%

On-time performance (%) 78% 85% 80%

Between 2020 and 2021, we recorded a five percentage point increase in the number of delayed flights. This was mainly
due to additional Covid-19 Customs, Immigration and Quarantine (CIQ) procedures that have been introduced by airports
and health authorities. For example, Covid-19 regulations require that, after passengers disembark from an aircraft, the airline
has to await the results of their Covid-19 tests before allowing new passengers to board. Should any passenger be symptomatic,
the aircraft has to be thoroughly sanitised before on-boarding new passengers.

Another factor contributing to delays was the added complexity of managing a regularly changing set of Covid-19 regulatory
rules which differ by country, and sometimes, states. These not only impacted check-in processes but also boarding times as
Allstars have been requested to undertake additional documentation checks. While we do our utmost to communicate these
new rules to Allstars and guests, the short notice given for implementation of new requirements resulted in lengthy delays in
some cases.

However, we believe that there remains no immediate need to review our standard departure times as the changes are
gradually being factored into our embarkation and disembarkation processes. In Indonesia, the streamlining of new policies
and procedures has allowed us to recover our OTP performance by 40% compared to earlier in the year. Furthermore, many
airports are easing requirements as Covid-19 enters into an endemic phase. We will continue to monitor our OTP and review
our flight schedules on an ongoing basis.
TECHNOLOGY, INNOVATION & INFORMATION SECURITY

Technology & Innovation

From the start, Capital A has been technology driven, leveraging technology to
reduce costs and pass on the savings to guests. From an early adopter of online
flight bookings to the present day, we have developed a sophisticated and robust
digital infrastructure. This, together with the huge amount of data that we have gathered
over the years, has enabled us to pivot to what we are today, namely a digital
travel and lifestyle company.

Other than the Airlines, our core businesses comprise airasia Super App, Asia
Digital Engineering, Teleport, BigPay and Ventures – all of which are either tech
companies or tech-reliant companies. We continue to leverage our digital
infrastructure and data to create and incubate more startups while expanding
the products and services currently offered to meet customers’ evolving expectations
and needs.

Innovation Description Plans for 2022

Health Travel Pass Standardised and secure mechanism to store and Rollout in Thailand, Philippines, Korea, Macau,
verify guests’ health data, eg vaccination certificates Taiwan, Cambodia and Vietnam
and Covid-19 test results, to authenticate guests’
health status before boarding them onto the plane.
The pass was launched in Malaysia in September
2021, followed by Indonesia in October 2021.

FACES Biometric airport clearance solution that guests Continue to extend the use of FACES at more
can use via airasia Super App to check in, conduct touchpoints in klia2 (eg from counters to transit
baggage drop, validate their identity and clear and aerobridge) and roll out boarding and pre-
security – remotely. Guests can enrol for FACES security touchpoints at other Malaysian airports
on the Super App with registration open for all once the vendor transitions the solution to the
our AOCs using passports or national IDs. The cloud. Currently it is an on-premise solution (at
pre-security clearance was piloted in klia2. klia2) and not scalable to other airports without
incurring significant cost.

Network Virtualisation is achieved using Software-Defined Rollout in all Malaysian domestic airports.
modernisation Wide Area Network (SDWan), which enables more
through efficient management of long-distance networks.
virtualisation SDWan makes it easier to utilise multiple
connections to achieve higher network performance
at lower cost. Overall benefits include network
resilience, optimisation of equipment use and
bandwidth as well as better fault tolerance.

The network upgrade started in 2021 with our

Sydney data centre.

Digital Trip Files Digitalisation of documents that need to be filed The system will be updated with technical
by Ground Operations after a flight is completed optimisation, monitoring and tracking enhancement,
in order to reduce paperwork and manual workflow dashboard, trip records module in Galaxy Suite,
on the ground. and CAAM approval.
As we transition towards becoming a data-driven organisation, the following innovations will be introduced in 2022:

Data
Intelligent
democratisation
Command Centre
efforts such as
which will unlock
data mart and Digital Trip Files,
ability to deliver
data catalogue Electronic Flight
Digital Twin
preparation, Bag
reducing the
citizen analytics,
Business process need for physical
corporate data
re-engineering, presence Infra as a code,
literacy, etc
enterprise ie patching via
superapp, and code to reduce e-attestation
key projects time to manage and e-signatures
such as Total loads
Operations (reducing energy
Network consumption)
Intelligence

Information Security
The confidentiality and integrity of data and information are important to us. To further strengthen our governance practices,
the Group Information Security has obtained its ISO 27001:2013 - Information Security Management certification in November
2021. By complying with ISO 27001, we are able to assure our stakeholders that their security assets such as financial
information and personal details are safe.

To support our expansion in digital lines of business, we recognise that it is imperative to secure the information and data
that are fundamental to our growth. The information security architecture of Capital A is built on four pillars covering
governance, risk management and compliance (GLC), information security operations, testing as well as data security, and
privacy protection.
The table below summarises the areas covered under these pillars.

Governance, Risk Management & Compliance Information Security Operations (SecOps)

• Payment Card Industry Data Security Standard • Security Monitoring
(PCI DSS) & ISO 27001 Certification • Incidence Response
• Policies and Procedures • Threat Intelligence
• Security Awareness Programme • Infrastructure Management
• Compliance Reporting • Support & Reporting
• Third-Party Risk Management

InfoSec
Capabilities
Highlights

Testing Data Security & Privacy Protection

• Vulnerability Assessment • Data Governance
• Penetration Testing • Awareness Education
• Technical Spec Review • Data Disclosure Control
• Bug Bounty • Fulfilment of Data Subject’s Rights
• Security Advisory • Sensitive Data Monitoring

As we are taking a new approach to information security disclosures, we will be covering this materiality area in more depth,
discussing both existing frameworks and mechanisms, as well as new enhancements added in 2021.

(i) Governance, Risk Management & Compliance

Governance, Risk and Compliance (GRC) is the first pillar of the Group’s information security capabilities. It refers to the
alignment of policies and procedures with established standards, identification and mitigation of the Group’s information
security risks and compliance with relevant legal, regulatory and industry requirements.

Our information security governance structure is underpinned by the following policies which are reviewed annually in
accordance with the requirements of ISO27001 certification:

Policy Description Changes in 2021

Information • Creates an environment that helps protect information • Updated Password and Anti-Virus
Security resources and users from threats that could compromise Policies
Policy privacy, productivity, reputation and intellectual property • Established Clean Desk and Clear
rights Screen Policy to ensure sensitive/
confidential information are secured at
all workspaces

Data • Outlines how business activity monitoring should be carried • R e a l i g n e d w i t h n e w C a p i t a l A

Governance out to ensure organisational data is accurate, consistent and organisation structure
Policy protected • Updated structure of data security &
• Defines the roles and responsibilities for information privacy workgroup
management
• Specifies procedures to be used in managing different types
of data
 Policy Description Changes in 2021

Access • Outlines access controls across the Group’s networks, No major changes
Control information systems and services to provide authorised,
Policy granular, auditable and appropriate user access, and to
ensure appropriate preservation of data confidentiality,
integrity and availability
• Protects the interests of all authorised users of the Group’s
information systems, as well as data provided by third parties,
by creating a safe, secure and accessible environment in
which to work

Server, • Establish rules and procedures for hardening servers, database Increased frequency of re-hardening
Database and network equipment to: process
and Network a) create a security baseline for all servers, database and
Hardening network equipment across the Group
SOPs b) minimise server and IT-related risks
c) comply with regulatory requirements

Information • Ensures operations recover quickly from information security Updated Information Security Incident
Security incidents, minimising loss of information and disruption of Response and Antivirus
Incident services
Response • Protects the Group’s reputation and minimises loss of credibility
among customers
• Provides technical guidelines on responding to incidents
effectively and efficiently

In 2021, the above policies were also updated and aligned with Capital A’s new objectives and goals. Periodic reviews were
performed in critical policy areas such as access controls and re-hardening of critical servers.

To ensure that information security culture is practised at all levels, we developed an information security awareness programme
for Allstars. The first mandatory training was launched in February 2020. In March 2021, an updated annual awareness
training was made mandatory for all Allstars and training completion status was tracked with our HR systems with progress
updated to management. The programme consists of an introduction to information security, management of information
security as well as data management and handling. Allstars are also made aware of current information security threats,
ways to avoid potential threats and steps that they should take in the event that external perpetrators succeed in penetrating
the company’s cyber security defences. Other than the initial training, reminder notices are regularly published on the company’s
internal communications channels.

Capital A also practises a Report on Compliance (ROC) process to instil an information security culture within project management
teams. The ROC’s main objective is to ensure that information security aspects are taken into account in the commencement
phase of a project’s lifecycle. The ROC covers authentication and authorisation; management of data security and privacy;
documentation of the technical specifications and implementation specifications; logs management and secure coding.

To meet industry standards, the GRC unit is further responsible for the annual renewal of the Group’s Attestation of Compliance
(AoC) certificate by our appointed Payment Card Industry Data Security Standard (PCI DSS) Qualified Security Assessor. For
PCI DSS compliance, we are required to review and implement relevant policies and procedures, and conduct vulnerability
assessments and penetration test lifecycles. On 26 November 2021, we obtained ISO 27001: Information Security Management
System certification affirming our compliance with international standards on the management of information security. The
certification is valid for three years with annual surveillance audits in between.

As Capital A’s digital lines of business expand, we source a higher variety of technology-related services from third-party
vendors. To manage our exposure to external risks, a third-party risk management process was developed to identify vendors
that have access to the company’s sensitive data or networks and perform due diligence on them to ascertain their resilience
against threats. In 2021, we requested several vendors to provide additional audit requests for information (RFI) to demonstrate
their compliance with our controls. These were adequately complied with.
(ii) Information Security Operations
The primary duty of Information Security Operations (SecOps) is to protect organisations against cyberattacks. To be effective,
our cybersecurity architecture is organised in accordance with the US National Institute of Standards and Technology (NIST)
Cybersecurity Framework which lays out five core functions of SecOps as illustrated in the diagram below. Each of these
functions is performed concurrently and continuously to create an operational culture that addresses dynamic information
security risk.

SECURITY OPERATION FRAMEWORK

Identify Recover

Develop an Protect Respond Maintain plans

understanding Detect for resilience
of all systems, and to restore
assets, data any capabilities
and their or services that
Implement Undertake
capabilities were impaired
appropriate appropriate
Conduct due to
safeguards to action in
appropriate information
ensure the response to
activities to security events
delivery of detection of
identify the
critical information
occurrence of
information security events
information
services and
security events
deployment of
best technology

• Investigate potential incidents

Our SecOps division is tasked • Triage and prioritise detected incidents
with continuously monitoring
• Coordinate an incident response
and improving the Group’s
cybersecurity and information • Monitor new and trending threats
security position. The team
• Identify and deploy solutions to new threats
holds a number of
responsibilities including: • Address employee enquiries
• Report to management
With effective controls, our SecOps division has been able to prevent major cybersecurity attacks on our systems. No incidents
were recorded in 2021.

Cybersecurity breaches and incidents

Indicators 2020 2021

Total number of information security breaches or other cybersecurity incidents 1 0

Total number of data breaches 1 0

Total number of customers and employees affected by company's data breach 1 0

Total value of fines/penalties paid in relation to information security breaches or other

cybersecurity incidents (RM) 0 0

(iii) Information Security Testing

​​
The main focus of Information Security Testing is to give assurance of the adequacy of security controls by coordinating
security reviews through vulnerability assessment and penetration testing (VAPT) of the Group’s IT infrastructure, network and
web applications.

The VAPT approach allows us to have a more detailed view of the threats facing our applications. Below are some of the
tools used by our team to find exploitable flaws and measure the severity of each finding.

Tool Description

Ad hoc VAPT VAPT represents two types of security testing which have different strengths and are often
combined to achieve a more complete vulnerability analysis

Annual Vulnerability Annual assessments to identify vulnerabilities in the Group’s IT infrastructure, network and web
Assessment applications

Source Code Review Review of the software source code or API to find bugs and vulnerabilities

Technical Specification Review of documentation to ensure that technical specifications meet information security
Document (TSD) Review requirements, including the architecture, process flow, information security design and technologies
used

Bug Bounty Programme A platform for external security researchers to report vulnerabilities

Security Advisory Notification to relevant teams for zero-day vulnerabilities, updates and software patches from
software vendors

Our penetration testers are responsible for identifying vulnerabilities within the organisation’s computing environment and for
writing consumable VAPT reports. These reports are sent to the respective system or application owner for remediation. The
team is also responsible for tracking the remediation progress and providing security consultation on the use of technology
in meeting information security requirements.
(iv) Data Security and Privacy Protection
Capital A is committed to respecting and protecting the privacy of our customers, employees and third parties. We are equally
committed to ensuring the confidentiality of information essential to our business.

Group Data Governance Committee

President of AirAsia Chief Information Security

Chief Data Scientist
Digital Officer

Data Security & Privacy Workgroup

InfoSec Data Security

Data Science Legal Finance
& Privacy

Investor Corporate Customer

Relations Communications Happiness

Security of our internal data is assured through our Group Data Governance Policy. To govern the implementation of the
policy, we established a Data Governance Committee, which is supported by the Data Security & Privacy Workgroup who
meets regularly to provide advisory on data governance and review External Data Disclosure requests.

To meet the objectives of this division, we established a data classification framework to identify sensitivity levels of data
and types of data indicating their origin and usage. All Allstars are made aware of our data governance processes through
annual training coordinated by the Information Security division.

As Capital A now operates in a cloud environment, we raised the level of controls for sharing sensitive data in company
emails and in document storage. In 2021, we added a data classification requirement on all cloud documents. Default sharing
preferences were also changed to the least permissive option and a confirmation prompter added for extraneous sharing.
We also scan all emails and documents for unmasked credit card numbers. If detected, the owners are notified of non-
compliance for corrective action to be undertaken immediately.

Further, to control access to data, a Data Access Approval System was created and integrated with our IT Service Desk
platform so as to automate the process to review and approve requests to access data belonging to the Group. This ensures
that the applicant secures all levels of approvals before requested data is released.

Other than protecting our internal data, it is equally important for us to protect the privacy of our guests. In 2019, we issued
our Personal Data Protection Standards Operating Procedures to ensure compliance with the Personal Data Protection Act
2010 of Malaysia. The SOP was updated in April 2021 to cover requirements under the electronic Information Law No. 19 of
2016 of Indonesia, Data Privacy Act 2012 of the Philippines and Personal Data Protection Act 2019 of Thailand.

At the same time, we empower our guests to manage their own data. In collaboration with the Customer Happiness and
Communications departments, we enhanced FAQ articles available to our guests so that they are able to make corrections and
updates. Our Customer Happiness agents were also trained to guide customers on channels to access their editable data.
SUPPLY CHAIN MANAGEMENT

We rely on a wide range of suppliers to help fulfil the needs of our diverse businesses. Recognising our ability to influence
our suppliers, we seek to encourage sound ESG practices across our supplier chain. At the same time, we uphold the highest
level of integrity and transparency in our dealings with suppliers as we build strong relationships based on trust.

To support the local economy, our preference is to source locally as far as possible. However, we also take into consideration
user specifications, quality and compliance requirements, supply chain dynamics and other commercial issues in our vendor
selection process.

Potential suppliers are invited to participate in a Request for Quotation or Proposal, following which their submissions are
evaluated based on their ability to meet our specifications, target price, the quantity and quality of products to be supplied,
delivery location and other operational/commercial requirements. Under certain circumstances we also assess the suppliers’
financial health.

The recommended supplier is then presented to the relevant procurement approvers and stakeholders for review and approval.
Thereafter, a contract may be put in place for clarity of responsibilities and accountabilities for both Capital A and the
supplier, with the support of our Legal Team. Critical suppliers, as determined by Group Procurement, undergo an annual
assessment to ensure they continuously improve the quality of the goods and services provided while keeping costs low. It
is also an annual check-and-balance to ensure that suppliers understand and meet our risk and compliance policies.

Types of suppliers we engage with:

Facilities,
Transportation, General Items,
Food & Beverage Commercial & Professional &
ICT Logistics, Ground Apparel &
(Inflight Food) Marketing Facilities Services
Service Merchandise
Equipment (GSE)

Critical suppliers Critical suppliers Choice of Event suppliers Professional Common pool of
(specialised and which are difficult suppliers can be are wide but services suppliers suppliers
difficult to to substitute due quite wide, choice of media are mostly
substitute) to stringent subject to user agency is very specialised,
requirements of requirements selective based however facilities
regulatory bodies. on commercial services are
Certain suppliers, needs mostly from local
eg for water can suppliers which
be substituted come from a
wider pool

Indicators 2019 2020 2021

No. of local suppliers excluding fuel, aircraft purchase & lessors 3,860 1,779 895

% spend on local suppliers 35 38 38

Total spend on local suppliers (RM) RM622,002,369 RM572,184,262 RM575,651

We have a Supplier Code of Conduct (SCOC) which is communicated and mandated through our Terms & Conditions in our
purchase orders (POs) and/or contracts. The SCOC covers:

• Business integrity and conflicts of interest • Social responsibility

• Labour practices • Competitive pricing and terms
• Confidentiality and personal data protection • Anti-bribery and anti-corruption (included in 2021)
• Environmental, health and safety management

Our contracts carry a legal language to mandate suppliers to comply with all applicable laws and regulations.
 Environmental
Capital A’s environmental initiatives are guided by the Group’s Environmental Policy, outlined in 2019, which articulates a clear
commitment to the protection of the environment and the prevention of pollution. While our environmental concerns stretch
across our Group endeavours, our reporting focus will be on the impact of our aviation business as it generates the bulk of
our emissions. In line with the policy, we will endeavour to minimise our operational impacts by reducing our carbon footprint
from fuel and energy consumption while promoting the sustainable use of natural resources, including water. By minimising
our greenhouse gas emissions, we aim to contribute to climate change mitigation. Through the practice of waste elimination,
reduction, reuse and recycling, meanwhile, we will reduce our waste-to-landfill. For more information on our environmental
commitment, please refer to https://capitala.airasia.com/misc/CapitalA_GroupEnvironmentalPolicy2022.pdf

In addition, we have established an Occupational Safety, Health & Environment (OSHE) manual that ensures we implement
sustainable environmental practices in addition to complying with safety and health principles.

In 2021, no sanctions were recorded arising from any non-compliance with environmental legal requirements.

CLIMATE STRATEGY

As climate change gains prominence as one of the most important issues on the global agenda, the aviation industry will
continue to face increasing scrutiny on actions to mitigate its environmental footprint. This is compounded by the fact that,
in 2021 alone, three out of four countries where AirAsia airlines are based suffered extreme weather events which impacted
millions of people.

We conducted a robust reassessment of our climate strategy to strengthen AirAsia’s commitment to climate responsibility and
to align ourselves with the aviation industry’s ambitious goal to reach net zero by 2050. Led by the International Civil Aviation
Organization (ICAO), the industry aspires to meet a series of progressive targets starting with ensuring carbon neutral growth
(measured against 2019 emissions) from 2021 onwards.

Based on existing technologies, there are four main approaches for AirAsia to converge towards net zero by 2050. These
are: fleet management, operational eco-efficiencies, carbon offsetting and utilisation of sustainable aviation fuel (SAF). The
year 2035 will mark a turning point for the Group’s emissions initiatives as this is when we expect zero-emission aircraft to
be available commercially. Once this happens, we will review our investment strategies to meet our climate goals. Our climate
strategy is reviewed annually to incorporate new developments.

In this year’s report, we will focus on providing updates on the four above-mentioned areas. We are also improving our
statistical disclosures so that our stakeholders can better understand the impact of our climate-related actions and compare
them with industry best practice.
 Roadmap Towards CO2 Reduction

15,000,000

Latest generation aircraft

CO2 Emissions (tonnes)

10,000,000

Operational Improvements

5,000,000
Sustainable Aviation Fuels

Offsetting
0
2020 2025 2030 2035 2040 2045 2050

Note: CO2 emissions for years 2018-2021 are based on actual data. Figures for 2022 onwards are based on AirAsia’s
projections.

Another major addition this year is alignment with recommendations of the Task Force for Climate-Related Financial Disclosures
(TCFD). We began by identifying the risks and opportunities associated with climate change to our business. This was supported
by the development of models to assess the financial impact of two key measures to manage our carbon emissions, namely
adding carbon offset costs into airfares; and switching to sustainable aviation fuels. A summary of our climate-related risks
and opportunities is presented on pages 133-136 of this report.

Unless otherwise stated, all data presented cover AirAsia Malaysia, AirAsia Indonesia and AirAsia Philippines in line with
Capital A’s financial disclosures in this annual report. Data for AirAsia Thailand are available in the listed entity’s Annual and
Sustainability Reports.
(i) Fleet Management

AirAsia’s fleet comprises three models of the Airbus A320 family, which are acknowledged to be the most efficient among
narrow-body commercial jet aircraft; and one Airbus A330 as our widebody aircraft. Our fleet remains relatively young at an
average age of 8.9 years.

Fleet size

Average age of type

Model Units Passenger Capacity
(years)

A320 121 10.02 180/186

A320neo 29 4.5 186

A321neo 2 3 236

A330 1 7 377

Fleet age (years) % of total fleet % of planes upgraded in past 2 years

< 7 years 34% 0%

7 – 13 years 44% 0%

> 13 years 21% 0%

Planning ahead for our medium and long-term needs, AirAsia has reaffirmed our commitment to upgrade our fleet to the
higher capacity and more fuel-efficient A321neo with the signing of an amendment agreement with Airbus in October 2021.
The agreement covers a total order of 362 A321neo aircraft, which includes the conversion of 13 orders for the A320 that
have yet to be delivered to Airbus’ latest iteration.

In keeping with AirAsia’s practice of maintaining a single-class seating layout, each A321neo will be fitted with 236 seats,
increasing its capacity while lowering per seat costs. As the A321neo aircraft replace the older A320 fleet, we expect to
benefit from significant sustainability gains. With 30% more seating capacity, each A321neo will result in a 20% fuel savings
per seat compared with the legacy A320ceo model. The A321neo also delivers a double-digit reduction in nitrogen oxide
emissions and reduced engine noise.

The new aircraft are scheduled for delivery through to 2035. Adjusting for post-Covid recovery, AirAsia is to take delivery of
our fifth A321neo aircraft (and the first from this order reaffirmation) in 2024.

Beyond 2035, AirAsia is monitoring developments in the zero-emission aircraft industry. We have signed a letter of support
with UK-based ZeAero%, which is developing a new hydrogen-powered aircraft that produces no polluting emissions during
flight. AirAsia will provide feedback and inputs to help ZeAero% optimise its design in the run-up to production targeted for
2030.
(ii) Operational Eco-efficiency
Fuel efficiency has long underpinned AirAsia’s drive towards cost minimisation. To complement our fleet strategy, AirAsia
maintains an industry-leading fuel efficiency programme that sees the airline emit the lowest carbon emissions per passenger
in Asia. Based on publicly available data, where disclosed, AirAsia also features among operators with the lowest carbon
emissions per available seat kilometre (ASK) in the world.

Despite prioritising the use of more efficient A320/A321neo aircraft, AirAsia’s emissions intensity increased in 2021 because
we were largely restricted to operating domestic flights, with only a limited number of international cargo flights. Domestic
flights generally have shorter stage lengths which equate to higher fuel burn rates as the cruise segments of the flights are
shorter than in longer stage lengths. Typically, aircraft burn more fuel during take off and when ascending than when in
cruise or descend mode. On shorter flight legs, the aircraft spends a higher percentage of total flight time in this phase,
resulting in higher block burn.

Nevertheless, we expect our emissions intensity to revert to pre-Covid levels as the pandemic becomes endemic and more
countries in Asean begin easing international travel restrictions. The chart below summarises AirAsia's carbon emissions trend
from 2017 (pre-Covid) to 2021.

AirAsia Carbon Emissions (tCO2e) AirAsia Carbon Intensity (gCO2 /ASK)

million 75
5 4,748,745
Carbon Intensity (gCO2/ASK)

4,431,864 69.0
70 68.1
4,038,954
Carbon Emissions (tCO2e)

4 66.6
65.7
65 63.4
3

60
2
1,260,477
55
1
391,325
0 50
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

AirAsia’s fuel efficiency improvements are driven by the Flight Operations department which is tasked with initiating innovative
fuel saving projects and tracking their outcomes using an extensive fuel monitoring system. In 2021, the department managed
over 27 efficiency projects to reduce fuel consumption and carbon emissions. Below are the highlights:

Initiative Description Result/Total CO2 avoided in 2021

SafetyLine OptiClimb Software that reduces fuel consumption during climb, Group compliance rate rose to 63% from
which is the most fuel-intensive phase of a flight. 58% in 2020.
OptiClimb leverages digital data to accurately
determine and analyse an aircraft’s aerodynamic CO2 avoided = 4,892 tonnes
characteristics.

Reduced Flaps Procedure that uses a reduced flap configuration Group compliance rate dropped slightly from
Landing during landing to cut aerodynamic drag and fuel 91% in 2020 to 88% due to operational
burn. variances.

CO2 avoided = 1,069 tonnes

One Engine Taxi on Procedure to operate one engine (instead of two) Group compliance rate dropped slightly from
Arrival during aircraft taxi-in to the arrival gate. 86% in 2020 to 83% due to operational
variances.

CO2 avoided = 1,020 tonnes

Idle Fuel Flow Factor Updates to the Flight Management System that enable Implemented on all aircraft.
optimisation of the flight’s descent and approach.
CO2 avoided = 557 tonnes
 Initiative Description Result/Total CO2 avoided in 2021

Idle Reverse Landing Procedure that uses idle thrust (instead of full reverse Group compliance rate for 2021 was 92%.
engine thrust) upon landing to reduce noise and fuel
burn. CO2 avoided = 568 tonnes

Required Navigation Procedure that uses an aircraft’s navigation functions In 2021, 14 out of 16 airports in Malaysia
Performance- instead of ground-based equipment for the shortest were approved to implement RNP-AR. A total
Authorisation Required landing approach. of 37.7% of AirAsia’s flights in Malaysia
(RNP-AR) approach landed using this procedure. AirAsia Indonesia
and AirAsia Philippines are still awaiting
regulatory approval for RNP-AR
implementation.

CO2 avoided = 517 tonnes

In total, AirAsia’s operational eco-efficiency measures avoided the emission of 11,175 tonnes of CO2 for the year. The return
on investment of these measures is immediate, as evident from the cost savings achieved (see table). Using the US EPA’s
Greenhouse Gas Equivalencies Calculation of 0.06 tonnes of CO2 per urban tree planted, the environmental benefit is comparable
to the impact of planting 186,250 trees.

New investments in 2022 will see AirAsia add at least six new fuel-saving initiatives including performance monitoring analysis
to identify aircraft that require maintenance tasks, and publishing enhanced fuel efficiency training material to improve overall
compliance with these measures.

Estimated annual CO2 savings Total annual investment required Total anticipated annual cost savings
(tonnes) (RM) (RM)

11,175 2,510,900 11,680,628

11,175 tonnes of CO2 saved equivalent to 186,250 urban trees planted

In addition, AirAsia is engaging with civil aviation authorities on joint initiatives to support ICAO’s State Action Plan (SAP) to
mitigate climate change. Launched in 2010, the initiative calls for ICAO member states to identify and track emissions reduction
measures on a tri-annual basis.

In 2021, AirAsia participated in five bilateral discussions with the Civil Aviation Authority of Malaysia (CAAM) to update
Malaysia’s SAP by Q1 2022. Among measures proposed for inclusion is enhanced air navigation. According to industry estimates,
effective air traffic management has the potential to save up to 15% of fuel consumed by airlines. Pending the maturity of
low-carbon technologies such as sustainable aviation fuel and zero-emission aircraft, improvements in air navigation will form
an important aspect of our engagement with the regulators.

​​
Concurrently, similar engagements have or are taking place between our airlines in Indonesia and the Philippines with their
respective state regulators. Indonesia’s Directorate General of Civil Aviation (DGCA) called for a first engagement in April 2021
requesting AirAsia Indonesia to provide input on initiatives to be included in the republic’s SAP. The plan was published in
December 2021 with emphasis on emissions reduction through measures such as improving airspace design and prioritising
sustainable airport development. Philippines commenced its SAP review process in December 2021 and, at the time of writing,
engagements are ongoing between the Philippines’ civil aviation authority and AirAsia Philippines.
(iii) Carbon Offsetting
The aviation industry marked CORSIA’s fifth anniversary in 2021 with the coming into force of the carbon neutral growth
commitment of participating countries. CORSIA is the first industry-wide initiative to self-regulate carbon emissions, and as
of 31 December 2021, a total 104 states have voluntarily signed on to participate including Malaysia, Thailand, Indonesia
and the Philippines. Participation imposes a mandatory requirement on all airlines registered within the state to comply with
CORSIA and its progressively ambitious targets to tackle CO2 emissions from international aviation.

AirAsia has met two key CORSIA requirements to date. In May 2021, all our airlines submitted independently verified carbon
emission reports for the year 2020 to their respective civil aviation authorities. To improve the reporting process, we enhanced
our carbon dashboards to reduce data gaps. This has enabled the airlines to cut down the number of man-hours needed
to track missing or incorrect data. It is also expected to increase the efficiency of the data verification process and enable
AirAsia to meet the new CORSIA deadline for reporting by 30 April of each year from 2022 onwards. At the time of preparing
this report, AirAsia is verifying our 2021 emissions from international flights with ICAO-accredited third-party verification body,
Verifavia.

Airlines in CORSIA participating countries are also required to cap carbon emissions from international flights so that global
CO2 emissions from international aviation do not exceed 2019 levels. According to 2021 data, carbon emissions from AirAsia’s
international flights fell by 98.8% in comparison with 2019 emissions, thereby requiring no offsetting measures. Based on
current recovery projections, our airlines are not expected to have to undertake mandatory emissions offsetting before 2024.

However, in line with industry best practice, we are in the process of putting in place a scheme to enable voluntary offsetting
by travellers by the second half of 2022. This early implementation will enable us to build internal capacity to navigate carbon
markets to procure CORSIA eligible credits. As part of our alignment with TCFD reporting requirements, we developed a model
to analyse the financial impact of adding tiered offset fees to airfares. We met with representatives of emissions unit
programmes, carbon trading platforms and carbon offset providers to gain a better understanding of the pricing and availability
of CORSIA eligible carbon offsets. This exercise enabled us to compare multiple scenarios, from CORSIA compliant offsetting
(carbon neutral growth for international flights from a 2019 baseline) to full offsetting of all carbon emissions from international
and domestic flights.

AirAsia will be closely following developments at the 41st ICAO General Assembly, scheduled to take place in September 2022,
for CORSIA updates that may impact compliance obligations. Among key issues that are expected to be discussed are the
setting of the industry’s CO2 baseline for the period between 2024-2027, new aspects to CORSIA, as well as policies to
address other pollutants such as NOx emissions and noise.

(iv) SAF Strategy

A fourth approach to addressing our carbon emissions is through the utilisation of SAF which can cut lifecycle emissions by
up to 80%. SAF is identified as the most effective medium- to long-term solution for the industry’s in-sector emissions reduction
ambitions. Although the fuel is currently not available in Asean, this is expected to change in 2022 as two major fuel producers
have announced the expansion of refinery capacities in Singapore to supply up to three million tonnes of SAF.

To pave the way for SAF introduction, we formed an SAF Committee comprising representatives from our Flight Operations,
Engineering, Sustainability and Finance departments to assess the operational and financial feasibility of SAF implementation.
The committee confirmed the absence of any technological barrier to SAF utilisation as we operate a full Airbus A320 family
of aircraft which has been certified by the aircraft and engine manufacturer as being able to fly with a blend of up to 50%
SAF. Furthermore, as the commercially available SAF at present is a drop-in fuel, or fuel that can be blended with jet fuel,
we are not required to invest in any new infrastructure or equipment for supply of the new fuel blend.

At present, the main obstacles to SAF utilisation is the low volume of fuel available globally and its high price. In assessing
our position, the committee has engaged with fuel producers to obtain a clearer timeline on SAF availability at key Asean
airports. It has also carried out a volume and cost projection for SAF utilisation in accordance with a broad industry target
of 10% of total fuel consumption by 2030. The findings of this exercise will inform the development of Capital A’s Sustainability
Blueprint which is scheduled for completion by Q3 2022.

In 2022, the SAF Committee will be expanded to include representatives from our Government Relations department to initiate
discussions with legislators on SAF policies that can help advance the use of the renewable fuel in the region. These discussions
will be guided by developments in the EU and US which present a mix of fuel mandates and tax credits for SAF utilisation.
Emissions Data
In this section, we report only Scope 1 emissions for our airline operations as they constitute the bulk of our direct emissions.
However, we cover the Capital A Group in entirety for disclosures of Scope 2 and Scope 3 emissions as these cover emissions
from all our offices and entities.

Scope Category Indicator Measured Emissions Sourced

Scope 1 Direct GHG Emissions Fuel consumption Flight operations, ground

operations

Scope 2 Indirect GHG Emissions Electricity consumption Purchased energy

(offices/buildings)

Scope 1 Emissions (from flight operations)

Scope 1 Emissions from flight

2019 (restated)1 2020 (restated)1 2021
operations

Fuel consumption (tonnes) 1,497,331 397,442 123,389

Total Scope 1 emissions (tCO2e) 4,748,745 1,260,477 391,325

Carbon intensity ratio (gCO2/RPK) 74.7 88.0 94.0

Carbon intensity ratio (gCO2/ASK) 63.4 65.7 68.1

Specific fuel consumption 3.01 3.55 3.79

(litres/100RPK)

1
Restated to include only AirAsia Malaysia, AirAsia Indonesia and AirAsia Philippines, in line with the financial disclosures, and to include the CO2 equivalents
of methane (CH4) and nitrogen oxide (N2O) emissions. AirAsia does not emit hydrofluorocarbons, perfluorocarbons or sulphur hexafluoride from flight operations.

Scope 1 Emissions (from ground operations)

To improve our environmental reporting, our disclosures this year include Scope 1 emissions from ground operations at home
base airports handled by Ground Team Red (GTR), a 50%-owned associate which provides group handling services to AirAsia
at all Malaysia and Indonesia airports. Ground handling in the Philippines operates on a hybrid model with selected stations
managed by GTR and others by third-party agents.

Initiatives to reduce carbon emissions include electronic filing of flight documents. Since 2019, the Ground Operations team
has been filing passenger manifests and crew’s general declaration forms online, as approved by the relevant regulations.
The initiative saves approximately 8.8 million sheets of A4-sized paper annually, equivalent to 750 trees. Moving forward, the
Ground Operations team will endeavour to further expand the scope of electronic filing.

Additionally, since 2020, GTR has enhanced its maintenance programme for ground vehicles and equipment as well as planning
to avoid unnecessary idling. From 2022 onwards, all new ground handling agreements will include a clause recommending
that green vehicles be used to service AirAsia flights where possible.

e-filing of flight documents saves

approximately 8.8 million sheets equivalent to 750 trees
of A4-sized paper annually

Scope 1 emissions from ground support equipment 2019 2020 2021

Fuel consumption (tonnes) 1,894 795 521

Total Scope 1 emissions (tCO2e) 5,880 2,469 1,617

Noise and Air Pollutants
As of 2021, all AirAsia aircraft are compliant with ICAO Annex 16 Chapter 4 noise standards while 85.6% of the fleet meets
with the most stringent ICAO CAEP/8 NOx emissions standards1. As we phase out older aircraft in exchange for new Airbus
A321neo models, we aim for 100% compliance with ICAO CAEP/8 NOx standards.

Indicators 2019 2020 2021

NOx emissions (tonnes)1 2,474 725 261

NOx emissions intensity (gNOx/RPK)1 0.0390 0.0508 0.0629

SOx emissions (tonnes) 2

271 79 29

Volatile Organic Compounds (VOC) emissions (kg)2 936,957 274,492 98,752

1 NOx emissions and compliance data are obtained from the ICAO Emissions Bank issue 28C dated 20 July 2021. The NOx emissions value per landing and
takeoff (LTO) cycle is based on the weighted average of AirAsia’s fleet composition as of FY2021.
2 According to the US EPA, SO2 represents the highest composition of SOx emissions, hence SO2 is considered as SOx for the purpose of calculations. SO2 and
VOC emissions data are sourced from US EPA’s Generic Aircraft Type Emission Factors table.

Scope 2 Emissions
Capital A’s Scope 2 disclosures cover emissions associated with energy consumption at all our facilities and offices.

2019 (restated)1 2020 (restated)1 2021

Location Carbon Carbon Carbon

Emissions Intensity Emissions Intensity Emissions Intensity
(tCO2e) (tCO2e/m2) (tCO2e) (tCO2e/m2) (tCO2e) (tCO2e/m2)

Malaysia2 3 (tCO2e) 2,817 0.109 2,517 0.065 2,261 0.055

Indonesia4 (tCO2e) 1,029 0.107 839 0.087 679 0.071

Philippines5 (tCO2e) 8 0.003 N/A6 N/A 40 0.012

Total (tCO2e) 3,855 0.073 3,356 0.076 2,979 0.046

1 Restated to include only AirAsia Malaysia, AirAsia Indonesia and AirAsia Philippines, in line with the financial disclosures.
2 Latest emission factor (combined margin dated 2017) for Peninsular Malaysia, where AirAsia Malaysia is based, is obtained from the 2017 CDM Electricity
Baseline for Malaysia, published by Malaysian Green Technology Corporation, for Malaysia’s Ministry of Energy, Science, Technology, Environment and Climate
Change.
3 Malaysia’s electricity consumption data includes RedQ (head office), RedChain (Engineering Warehouse, 2020 onwards) and RedStation (KL Sentral office,
2021 onwards).
4 Latest emission factor (combined margin dated 2019) for Jakarta, where AirAsia Indonesia is based, is obtained from the Joint Crediting Mechanism, Indonesia
Secretariat.
5 Latest emission factor (combined margin dated 2015-2017) for Luzon-Visayas Grid, where AirAsia Philippines is based, is obtained from the Philippines'
Department of Energy.
6 No data is available in 2020 for the Philippines as the airline moved its office to new premises and utility invoices have not been issued by the building
owner.
Energy Consumption

Energy Consumption 2019 2020 2021

Non-renewable fuels purchased and consumed (MWh)1 19,936,614 5,295,262 1,647,153

Non-renewable electricity purchased (MWh) 6,012 5,266 4,711

Total non-renewable energy consumption (MWh) 19,942,626 5,300,528 1,651,864

1 Non-renewable fuels purchased and consumed include jet fuel for flight operations and diesel for ground operations.

Electricity Use Intensity (kWh/m2)

Location 2019 2020 2021

Malaysia 186.8 115.7 100.0

Indonesia 123.0 100.2 81.1

Philippines 4.3 N/A 20.7

Various initiatives launched in 2020 to reduce our electricity consumption continued into 2021. These include:
• Staggered switching on of major equipment that are power-intense
• Scheduled light usage by zone, based on the occupancy of the area
• Establishing designated areas where Allstars can continue to work after regular working hours when lights and air-
conditioning are switched off in most parts of the building

Scope 3 Emissions
Capital A’s Scope 3 emissions are generated from three main activities: the production of fuel and energy, employee business
travel, and subsidiary businesses using third-party transportation service providers, namely Teleport, airasia xpress and airasia
ride. Capital A plans to begin tracking Scope 3 emissions from 2022 onwards from these three sources. We expect the main
source of these emissions to be from fuel and energy production. Emissions from employee business travel is negligible due
to the suspension of non-essential travel due to the pandemic. Teleport, airasia express and airasia ride are relatively new
lines of business established in the last two years and, therefore, are in the process of capacity building to begin monitoring
their respective carbon emissions. We will work closely with our vendors and business partners to track, minimise and drive
Scope 3 emissions reduction.
WASTE MANAGEMENT

Our policy is to reduce as far as possible all waste generated by our operations, and to increase our recycling rate.

Scheduled Waste
Most of the scheduled waste produced relate to the engineering aspects of our airline operations and comprise spent oils/
fluids, absorbents, containers, gloves, rags and filters. These are disposed of by licensed contractors in accordance with the
relevant environmental acts and regulations in the respective countries.

In 2021, we generated 45% less solid scheduled waste as the number of aircraft in active operation was greatly reduced.
On the other hand, more liquid scheduled waste was generated due to aircraft parking and storage maintenance activities
which involve draining of aircraft fuel/fluid.

Scheduled waste generated Group-wide

2019 2020
Type
(restated)1 (restated)1 2021

Solid Waste (tonnes) 53.6 31.8 17.5

Liquid Waste (litres) 42,004 25,792 42,746

1 Restated 2019 and 2020 data to include scheduled waste data for Indonesia and Philippines.

Non-Scheduled Waste
Non-scheduled waste includes waste produced at our office premises. We started to track waste disposal at RedQ (Malaysia)
from March 2019, RedChain (engineering warehouse in Malaysia) and RedPoint (Philippines) from 2020 and RedHouse
(Indonesia) from 2021. A decrease can be seen in the volume of waste generated in 2021 due to Allstars working from home
as a result of Covid-19.

Non-scheduled waste generated, and percentage recycled

2019 2020 2021

Location Indicators
(tonnes) (tonnes) (tonnes)

Total weight of non-hazardous waste generated – 64.11 69.32

Malaysia Total weight of non-hazardous waste disposed 347,650 53.46 67.03

% of non-hazardous waste recycled (diverted from disposal) 7.6% 17% 3.3%

Total weight of non-hazardous waste generated N/A N/A 35

Indonesia Total weight of non-hazardous waste disposed N/A N/A 35

% of non-hazardous waste recycled (diverted from disposal) N/A N/A 0%

Total weight of non-hazardous waste generated N/A 881 63

Philippines Total weight of non-hazardous waste disposed N/A 81 57.93

% of non-hazardous waste recycled (diverted from disposal) N/A 7%1 8%

1 Restated Philippines data for 2020 due to corrections in units used and in recyclable percentage.
Recycling Programme in Office
To reduce waste to landfill, the Group actively promotes recycling. Recycling bins are provided in our premises for the collection
of paper, plastic and aluminium items. In 2021, however, the volume of recyclable waste collected dropped as most Allstars
were working from home.

We also implemented e-waste recycling at RedQ in 2019, when 60kg of e-waste was collected and recycled. In 2020, we set up
three e-waste bins at RedQ for broken handphones, tablets, laptops, media storage devices and small electronic items. Due to the
negligible volume of e-waste collected in 2021 (with most Allstars working from home), these items were not sent for recycling during
the year. Once a sufficient volume is achieved, this e-waste will be picked up and recycled by a licensed contractor.

Recyclable Waste (kg)

Types of
Location
Recyclables
FY2019 FY2020 FY2021

E-Waste 601 0 0

Plastic 1281 0 25

Malaysia Paper 25,991 10,076¹ 1,968

Metal 3,931 579 294

Total 30,110 10,655 2,287

E-Waste N/A N/A 0

Plastic 79 12 0

Indonesia (RedHouse) Paper 993 123 0

Metal N/A N/A 0

Total 1,072 135 02

E-Waste N/A N/A N/A

Plastic 14,819 5,316 4,543

Philippines (RedPoint) Paper 592 332 531

Metal 5,463 879 0

Total 20,874 6,527 5,074

1 Restated data for e-waste and plastic collection in 2019, and paper collection in 2020 to reflect the final billing figures
2 No data available for Indonesia in 2021 as the recyclable waste was collected by the local government agency
Cabin Waste Management
AirAsia has been collecting recyclable items such as plastic bottles, aluminium cans, glass, paper and metal from the cabin
since 2017 for AirAsia Malaysia and 2018 for AirAsia Indonesia and AirAsia Philippines. However, this initiative was put on
hold in 2021 due to pandemic-related restrictions on cabin waste disposal.

Food Waste

AirAsia began to track our aircraft food waste in 2019. However, food waste data and trends are not available for 2020
and 2021 due to greatly reduced flight activities as well as Covid-driven restrictions on inflight services. Tracking of food
waste data has resumed as of 2022.

Food waste generated

Target for
AOC
2019 2020 2021 20221

MAA (kg) 304,332 N/A N/A 166,400

IAA (kg) 50,689 N/A N/A 32,000

PAA (kg) 45,977 N/A N/A 38,400

Total (kg) 400,998 N/A N/A 236,800

1 Estimated food waste based on 2022 passenger forecasts.

The 2022 target is to cap food wastage at 25% of total consumption

Based on 2019 data, food waste across the AirAsia averaged at 30% of total perishable meals inventory. To reduce food
waste, an initiative was introduced to improve meal forecasts through analysis of passenger loads and inventory take-up
rates. This initiative was temporarily halted in 2020 and 2021 due to Covid-19-related restrictions on sale of inflight meal
products.

In 2022, we target to cut food waste to 25% of perishable meals through a new demand planning tool utilising AI technologies
to better control wastage. Our priority is to continue to promote pre-book meals. The inflight department is also exploring
the option of providing discounts on onboard sales at the end of each day.

Water Management
The Group recognises that water is becoming increasingly scarce, hence has put in place various initiatives to minimise waste.
Given that most Allstars are still working remotely, our water consumption has been reducing. Meanwhile, no industrial effluents
were generated from our office activities, and all waste water from sanitary and washing were discharged to government-
operated centralised water treatment plants for treatment.

Water consumption

Location 2019 2020 2021

Malaysia (m3)1 64,133 43,668 33,669

Indonesia (m3) 5,401 2,618 2,253

Philippines (m3) 1,316 N/A2 3,021

Total (m3) 70,850 46,286 38,943

1 Malaysia’s water consumption data includes RedQ (head office), RedChain (engineering warehouse, 2021 onwards) and RedStation (KL Sentral office, 2021
onwards).
2 No 2020 data is available for the Philippines as the airline moved its office to new premises in late 2019 and utility invoices had not been issued by the
building owner.
Environmental Data Summary
Energy Consumption

Indicators 2019 2020 2021

Fuel Consumption (tonnes) (Flight Operations) 1,497,331 397,442 123,389

Fuel Consumption (tonnes) (Ground Operations) 1,894 795 521

Total Fuel Consumption (tonnes) 1,499,225 398,237 123,910

Non-renewable fuels purchased and consumed (MWh) 19,936,614 5,295,262 1,647,153

Non-renewable electricity purchased (MWh) 6,012 5,266 4,711

Total non-renewable energy consumption (MWh) 19,942,626 5,300,528 1,651,864

Energy Intensity

Specific Fuel Consumption (litres/100RPK) 3.01 3.55 3.79

Electricity Intensity (kWh/m2) 155.78 108.61 87.65

Emissions

Indicators 2019 2020 2021

Scope 1 (Flight operations) (tCO2e) 4,748,745 1,260,477 391,325

Scope 1 (Ground operations) (tCO2e) 5,880 2,469 1,617

Scope 1 total (tCO2e) 4,754,625 1,262,946 392,942

Scope 2 (tCO2e) 3,855 3,356 2,979

Scope 1&2 total (tCO2e) 4,758,480 1,266,302 395,921

Emissions Intensity

Scope 1 (gCO2/RPK) 74.7 88.0 94.0

Scope 1 (gCO2/ASK) 63.4 65.7 68.1

Scope 2 (tCO2e/m ) 2
0.073 0.076 0.046

NOx, SOx and Other Significant Air Emissions

NOx emissions (tonnes) 2,474 725 261

SOx emissions (tonnes) 271 79 29

Volatile Organic Compounds (tonnes) 937 275 98

Resource Management

Indicators 2019 2020 2021

Water Consumption

Total Water Consumption (m3) 70,850 46,286 38,943

Waste Management

Solid Hazardous Waste (tonnes) 53.6 31.8 17.5

Liquid Hazardous Waste (litres) 42,004 25,792 42,746

Non-Hazardous Waste disposed (tonnes) 347,650 135 160

Non-Hazardous Waste recycled (tonnes) 52.1 17.3 7.4

Alignment with Task Force on Climate-related Financial Disclosures (TCFD)

TCFD recommendations have provided further direction for our climate strategy, especially the Group’s foresight when
considering climate issues. This year, we have identified our business risks and opportunities, the potential financial impact
of climate change, and our mitigation strategy.

As we become more conversant with TCFD, we recognise the need to strengthen our disclosure in various areas of our
reporting; and plan to do so in the next couple of years.

Governance Our governance around climate-related risks and opportunities

(please refer page 99)

The actual and potential impacts of climate-related risks an

Strategy opportunities on our businesses, strategy and financial planning
(please refer page 120-121; 133-136)
Risk The processes used to identify, assess and manage climate-
Management related risks (please refer page 106-108)

The metrics and targets used to assess and manage relevant

Metrics
& climate-related risks and opportunities (please refer page
Targets 123-124; 126-132)

Climate-related
Risk Type Potential Financial Impact Mitigation Strategy
Risk Description

Risk from new New carbon taxes could increase We are developing a long-term strategy to reach
regulations: the price of fuel, thereby raising the industry’s net zero aspiration ahead of the
operating costs and fares while 2050 goal. In the immediate horizon, we will
dampening travel demand. strengthen our fuel efficiency programme and
work with regulators on improvements to air
traffic management to cut flight distances and
fuel consumption.

(i) Imposition of Carbon taxes will increase the We have commenced discussions with several
carbon taxes, company’s tax liability while emissions fuel suppliers on making available SAF in
emissions quotas or sustainable fuel mandates Malaysian airports and on the development of
quotas or will lead to a significant increase in SAF from locally available feedstock such as
Transition Risks

renewable fuel and operating costs. An increased agricultural waste. A purchase commitment by
fuel mandates cost burden will reduce the company’s AirAsia will strongly incentivise fuel suppliers to
Policy and profitability or depress demand if invest and lower the long-term cost of SAF.
Legal passed on to travellers.

(ii) Emissions Emissions testing regulations will add Emissions testing regulation will only impact a
testing to the cost of aircraft maintenance limited number of our older planes. All of our
regulations and require increased downtime for planned capacity expansion from 2024 onwards
aircraft, leading to rescheduling costs will be achieved with the new Airbus 321neo
or loss of revenue due to flight model, currently the most fuel- and emissions-
cancellations. efficient narrowbody commercial aircraft in the
market.

(iii) New emissions New reporting requirements increase Our carbon dashboard can be enhanced to track
(eg NOx)/ manpower/consultancy costs as well our NOx emissions while verification of these
waste as audit or verification fees. emissions can be tagged to our existing carbon
reporting emissions verification at minimal additional cost.
requirements
 Climate-related
Risk Type Potential Financial Impact Mitigation Strategy
Risk Description

Risk from new AirAsia has confirmed its order for AirAsia’s last A321neo is scheduled to be delivered
technologies 362 Airbus 321neo aircraft that will in 2035, coinciding with the expected introduction
aimed at be delivered up until 2035. The of Airbus’ zero emission aircraft. AirAsia can
supporting global introduction of zero emission aircraft consider purchasing this new aircraft type as
low-carbon could significantly reduce asset value part of our fleet replacement strategy beyond
Technology
transition of AirAsia’s 321neo fleet and render 2035. Should the zero emission aircraft be
its fleet technology obsolete. available earlier, AirAsia can initiate negotiations
Investment in new fleet type or with Airbus to convert A321neo yet to be delivered
adaptive green technologies will to the new fleet type.
require significant capital investments.

Risk from market More companies may opt to cut We believe that business travel will resume as
fluctuations as business travel, in favour of virtual Covid-19 enters an endemic phase. In 2022, we
travellers and meetings. will be introducing voluntary carbon offsetting
businesses on all AirAsia flights to enable travellers to
respond to choose to reduce their carbon footprint. We
climate change intend to make this a mandatory commitment
later, once guests are comfortable with the idea
of accounting for their own carbon footprint.

Expansion of China’s Belt and Road We believe that air travel will remain essential
initiative to high-speed rail to connect Asean as two major countries -
connections may also offer guests a Indonesia and the Philippines - are archipelagos
(i) Changing
lower-carbon travel alternative. where road and rail infrastructure are not well
travel patterns
developed. In addition, the Belt and Road
initiative has stalled in many countries, leaving
Market cross-border connectivity still a hurdle.

With CORSIA coming into effect in We are introducing an option for guests to add
Transition Risks

2021, an increasing number of airlines an offset fee to their fares in 2022. This will
and other businesses will purchase enable us to build internal capacity on carbon
carbon credits, causing prices to rise trading, including exploring options for forward
in the short term before more credits purchase of available credits. In addition, we
become available in the international are also exploring options for AirAsia Foundation
(ii) Growing
carbon market. Any unanticipated to help some of its environmental social
demand for
increase in carbon credit price could enterprises accredit their programmes to be
carbon credits
result in AirAsia having to bear the eligible for CORSIA offsetting. This will enable
additional cost of offsetting from the social enterprises to benefit from sustainable
top-line revenue. funding while helping to secure AirAsia’s supply
of carbon credits in Asean.

Risk of negative
We are undertaking a brand campaign to
brand impact if
highlight our environmental credentials as the
AirAsia is seen
airline with the lowest CO 2/ASK in Asia. By
as not
claiming our ‘greenest airline’ position, we address
responding
our climate critics and potentially stand to gain
sufficiently to
from increased market share among
climate crisis,
environmentally-conscious travellers.
resulting in: Guests may choose a competitor that
is seen to be doing more and
Reputation (i) Shifts in guest investors may divest. Financial An option for guests to offset their travel will
institutions may also impose a assuage some travellers’ concerns on their impact
preferences
premium on lending. on the environment.

We believe the risks from reputational damage

due to this movement will be limited as air travel
(ii) Being
is not a luxury in many places that we serve due
targeted by
to underdeveloped road and rail infrastructure.
flight shame
This can be mitigated with a consistent awareness
movement
campaign highlighting our sustainability efforts
and providing carbon offset options to guests.
 Climate-related
Risk Type Potential Financial Impact Mitigation Strategy
Risk Description

We are taking a targeted approach to increasing

Transition Risks

(iii) Increased
our scores in the FTSE4Good and Corporate
stakeholder
Sustainability Assessment (CSA) ratings. This will
concern or
Reputation affirm our sustainability attainments and enable
negative
AirAsia’s shares to be listed in reputable sustainability
stakeholder
indexes that make us eligible for investments by
feedback
green funds.

Risk of extreme At extremely high or low temperatures, We may operate seasonable schedules to
temperatures aircraft may become inoperable or minimise exposure to disruptions caused by
rendered uncertified to operate. On extreme high temperatures.
extremely hot days, aircraft may not
be able to take off due to reduced
engine performance, resulting in
delays or revenue loss from offloading
pax/cargo.

Increases in hot days can also cause To avoid aircraft being stranded at airports
heat buckling on runways and experiencing extreme temperatures, we may
taxiways and other infrastructure undertake pre-emptive cancellations by expanding
damage. Such damage could increase coverage of weather forecasting services.
operational and repair costs for
Acute
airports which would eventually be
passed on to airlines and travellers.

Risk of increasing Weather events such as floods and We maintain up-to-date business continuity plans
frequency and typhoons put at risk operations and for weather risk affecting all four major hubs. We
severity of infrastructure at affected airports, are also planning a climate-related disaster scenario
weather events including three of our four major hubs. exercise to test and improve our disaster management
Bangkok and Jakarta are increasingly and recovery processes.
vulnerable to flood risk while Manila
to typhoon disruption. Other than asset
Physical Risks

damage, these weather events can

result in revenue losses and substantial
costs relating to cancelled flights and
airport closures.

Risk of longer- Rising sea levels will render some We recognise that rising sea levels may be
term changes in coastal airports inoperable, forcing inevitable. Our Government Relations department
weather patterns cities to build new airports further is liaising regularly with the ministries of transport
inland. AirAsia will have to bear the of all AOC countries to keep abreast of any
cost of informing booked guests and plans to move major airports.
communicating changes for future
bookings. Demand may be impacted
if the airport is far from the city
centre. New airport construction
costs may also result in higher airport
taxes and other fees.
Chronic Jakarta is one of the most vulnerable Our strategy team will incorporate the projected
cities to rising sea levels. It is also impact of climate change into our fleet and
documented to be sinking fast, routes strategy.
prompting the Indonesian Government
in 2019 to announce the relocation
of its administrative capital to East
Kalimantan. This could affect growth
projections, and result in increased
costs as regulatory staff will either
need to relocate or travel frequently
to Balikpapan for meetings with
regulators.
The following are examples of specific climate-related opportunities we have identified.

Climate-
related Potential Financial Impact Mitigation Strategy
Opportunities
Administrative Digitalisation strategy reduces manual Our ongoing digitalisation programme has minimised all
efficiency paperwork and cost of paper, printing and paper documentation on board and in our office processes.
storage of documents. Of the remaining ones, we continue to work with regulators
to move towards e-documentation for regulatory records-
keeping and submissions such as e-Voyage Reports.
Resource Shift to SAF utilisation diversifies fuel supply We have commenced discussions with several fuel suppliers
diversification and reduces exposure to rising energy costs to supply SAF at Malaysian airports and/or to develop SAF
and growing carbon regulation. using locally available feedstock.
Resource Reduction of fuel utilisation via improvements We engage in regular consultations with civil aviation
efficiency in air traffic management and A321neo fleet authorities to implement new fuel efficiency and emissions
conversion will further reduce operating reduction measures. This includes proposing measures to be
costs and ensure that AirAsia maintains our included for monitoring and tracking emissions reductions in
commercial advantage as the airline with State Action Plans.
the lowest cost/ASK and CO2/ASK in the
industry.
Products and Attract travellers keen to minimise their In 2022, we are initiating a brand campaign to highlight
Services carbon footprint and experience sustainable AirAsia's greenest airline in the world achievements and our
travel activities. AirAsia potentially gains climate change management strategy.
from increased market share among
We are also implementing a voluntary offset programme to
responsible travellers and earns ancillary
enable travellers to contribute to their carbon offsetting.
income from sale of sustainable travel
activities. AirAsia Foundation is working with sustainable travel social
enterprises to make accessible sustainable travel activities
on its DestinationGOOD.com platform.
Markets Recognise that climate impact prone Resume commercial flights to affected destinations as soon
destinations may also be strong revenue as it is safe to do so to support rebuilding programmes.
generators in the recovery and rehabilitation
phase.
Resilience Continue to strengthen our network Invest in climate forecasting tools and services to inform fleet
connectivity in hubs such as klia2 with planning and route planning strategies.
reduced climate risk.
 Social
HEALTH & SAFETY

The health and safety of our Allstars and guests is of paramount importance. Health and safety governance is headed by
our Chief Safety Officer who oversees all aspects of safety in Capital A. We have a comprehensive framework of systems
and processes to ensure that Allstars are able to carry out their functions safely.

(i) Operational Safety

Our activities are governed by a host of manuals, safety policies and SOPs which are regularly reviewed and updated. These
are accessible points of reference to guide safe behaviour among Allstars and inculcate a positive safety culture in which
all employees are involved and actively engaged.

In 2020, we began a process of standardisation of some of the key manuals at group level so that all AOCs are brought
up to best practice standards. Further updates were made in 2021 to reflect changes in the Capital A structure. Three key
manuals which were refreshed were:

Manual Description & Update

Safety Management • Standardises operational practices which ensure that risks are proactively managed and
System (SMS) relevant procedures are in place to prevent serious incidents
• Incorporates the requirements of ICAO Annex 19, ICAO DOC 9859, IOSA, Civil Aviation Authorities
• Updated in 2021 to comply with latest regulatory requirements and civil aviation directives

Emergency Response • Covers our response to major aircraft incidents or other adverse events that result in serious
Plan (ERP) injuries, fatalities, severe damage and/or significant operational disruption
• Standardised at Group level in 2021 for central management and coordination

Occupational Safety • Outlines standards and operating procedures to ensure the safety and well-being of Allstars,
Health & Environment contractors and visitors to Capital A
(OSHE) • Incorporated in Capital A’s operations in 2021

To ensure compliance with operational safety standards, our Group Operational Quality Assurance Departments undertake
regular operational audits while our Safety Department monitors occupational safety and tracks and investigates all safety
reports raised.
Group Operational Quality Assurance
In 2016, we established our Group Operational Quality Assurance (GOQA) to ensure all our AOCs comply with applicable
regulations, IATA Operational Safety Audit (IOSA) standards and recommended practices. Since 2018, GOQA has been certified
to ISO 9001:2015 Quality Management System.

GOQA is responsible for conducting the Internal Operations Audit (IOA) and the Joint Station Compliance Audit (JCSA) which
is conducted annually at all hubs and main bases, and once every two years at all other stations. To ensure that we maintain
oversight despite Covid-19 travel restrictions, GOQA developed Remote Assessment Programmes to enable scheduled audits
to continue, thereby ensuring the integrity and safety of our airline operations.

These audits aim to close gaps and prepare our AOCs for the IOSA certification. IOSA certification represents the industry
gold standard indicating the highest standards of operational safety and efficiency. As a non-IATA member, certification is
optional for AirAsia. Nevertheless, we ensure that all AirAsia airlines meet IOSA standards through undergoing IOSA audits
and mirroring the audit processes in GOQA’s IOAs. In 2019, all AirAsia AOCs successfully obtained IOSA certification.

In August 2021, IOSA registration was successfully renewed for AirAsia Malaysia. In the interim, GOQA conducted IOAs at
IAA and PAA in January and June 2021 respectively, returning no major findings in need of remedial action.

Airline (AOC) Latest IOSA Certification Date Remarks

In February
AirAsia Malaysia - AK 6 August 2021 IOSA Registration renewed
2022,
via Remote Audit in August
2021 airlineratings.
com awarded
AirAsia Indonesia - QZ 21 June 2019 GOQA IOA completed in Jan
2021 AirAsia with its
highest star
AirAsia Philippines - Z2 31 May 2019 GOQA IOA completed in
June 2021
rating for a
second year in
The table below depicts the total number of Remote Assessment Audits carried out in 2021: a row. AirAsia
Group was also
Audit No. of Audits Performed Remarks
named one of
Joint Station 53 Audits conducted at all the Top 20
Compliance operational stations
groupwide
safest LCCs in
the world.
Internal Operational 6 IAA, MAA, AAI, PAA, TAA
* airlineratings.com ranks 385
and AAX airlines around the world

Group Aircraft Health Monitoring Function is another safety associated function undertaken by GOQA. The objective is to
maintain oversight of recurrent defects in all aircraft operated by AirAsia. GOQA monitoring adds a second layer of oversight
to AOC-level monitoring. The technical health of aircraft is monitored daily in real time, and any defect identified is brought
to the attention of the Maintenance Operations Departments of the relevant AOC, to ensure timely rectification. Weekly
monitoring reports are then shared with management and stakeholders in the AOCs. This monitoring function not only prevents
aircraft from being grounded but also helps avoid undesirable events and incidents associated with system defects. This
contributes to the overall safety and reliability of aircraft operations. In 2021, we issued 52 weekly Aircraft Health Monitoring
Reports.
(ii) Occupational Safety
In 2021, we successfully completed the following health and safety audits and/or certifications.

Certification Relevant Department/Hub/Division

Occupational Safety and Health (OSHWA) Audit Penang Hub - audit was conducted in March 2021

ADE registered for SoHELP Programme in July and completed

Occupational Safety and Health (SoHELP)
second verification in March 2021

Occupational Safety and Health USECHH Regulation 2000

Chemical Health Risk Assessment was conducted at the Ground
(Use and Standard of Exposure of Chemicals Hazardous
Service Equipment workshop
to Health)

Successfully completed a surveillance audit of the Inflight

Food Safety Management System - ISO 22000:2018
Warehouse (CAE Building) in Sepang in June 2021

As part of our safety culture, we encourage Allstars to report any unsafe occurrence or potential hazard so that necessary
actions can be taken to avert serious incidents. This includes reports on fatigue during operations. Reports are submitted via
Coruson, an enterprise safety and risk management software. In 2021, a total of 11,609 safety reports were received for our
safety data collection and processing system (SDCPS) across the Group. These safety reports were then managed and actioned
in accordance with the Safety Report handling processes.

With safety culture deeply entrenched in AirAsia, our Safety Team focused on providing safety training to colleagues in other
Capital A subsidiaries. Below are the key safety trainings delivered in 2021.

Number of Average
Training Description Focus Group
Participants Training Hours

Redeye Training Redeye Training was provided to • Ground Team 12 6

enable Allstars to use the new Red (GTR)
reporting system for Allstars Covid-19 • Asia Digital
infection. Engineering
(ADE)
• Teleport

National Institute of Training was provided to Allstars at • ADE 12 8

Occupational Safety ADE to reduce work-related risks
and Health (NIOSH) through correct behaviours.

Safety Induction Safety Induction Training ensures • Allstars 12 1

Training new staff or persons entering AirAsia • Visitors
premises are briefed on safety • Vendors
practices.

Airside Safety Training The Airside Safety Training was • ADE 416 2
provided to ensure all operational • Ground
Allstars working at the airside are Operations
familiar with the airside safety • AirAsia X
procedures and processes Engineering
The table below provides a summary of our work-related injuries record. It was noted that the majority of recorded work-related
injuries were caused by lifting heavy loads. To further minimise occupational injuries among ground handlers, daily safety briefings
are conducted by supervisors prior to start of work. Instructions on lifting techniques and back support straps were also provided.
Pre-Covid, our Physiolab team conducted bi-weekly ergonomic assessments on Allstars, especially ramp staff. However, due to the
pandemic and to ensure the safety of Allstars, we continued our physio sessions online.

Work-related injuries

Reporting Year FY2019 (restated)¹ FY2020 (restated)¹ FY2021

Total man-hours worked 37,988,352 29,399,136 14,224,896

Number of fatalities as a result of

0 0 0
work-related injury

Number of recordable work-related

142 71 36
injuries

Ergonomic related
Workplace (bodily) Ergonomic related
Types of work-related injuries injuries
injuries injuries
Bodily injuries

Number of lost days 568 384 140

Incident rate 3.9 0.001 2.1

Severity rate 11.9 7.1 6.3

¹ Restated to include only AirAsia Malaysia, AirAsia Indonesia and AirAsia Philippines, in line with the financial disclosures.

Note: T
 he Incident Rate = No. of accidents (E) X 1,000 /annual average of no. of employees; Severity Rate = Total workdays
lost (C) X 1,000,000 /total man-hours worked (Y)

Identification & mitigation of safety risks and situations

Hazard Identification, Risk Assessment Risk Control (HIRARC) was conducted for every incident followed by proposing safety
recommendations to avoid recurrence. In addition to Quarterly Safety Committee meetings, safety training and regular safety
observation and on-job guidance were also conducted in 2021.
Safety in the Pandemic
Onboard Safety
Since 2020, we have introduced a host of measures to minimise the risk of Covid-19 transmission on our flights. Last year,
some of these measures were enhanced based on new developments such as our new policy, announced in October 2021,
to accept only vaccinated adult guests and guests under the age of 18 only if they are accompanied by fully vaccinated
parents or guardians. Some of our main measures are illustrated below.

Pre-flight During flight Post-flight

Minimisation of check-in contact HEPA filters ensure the highest level Disinfection carried out on all aircraft
through FACES, mobile check-in, self- of air quality with 99.997% micron daily and thorough cleaning during
baggage drop and digital boarding filtration each transit
pass

Regular disinfection of counters and Mandatory mask policy onboard all

kiosks flights Passenger contact tracing when case
Health declaration by all air crew prior is confirmed by health authorities
Vaccinated guests only
to duty

Cabin Crew Guidelines

• Wear the prescribed personal protection equipment (PPE) before reporting for flights
• Maintain social distancing at all times; and ensure guests maintain social distancing during boarding and
disembarkation
• Sign-on for duty via mobile phones by connecting to company’s WiFi network
• Greet fellow Allstars and guests the Asean way
• Self-sanitise regularly on the way to the office, before meeting colleagues, and upon boarding the plane
• Wear PPE in all phases of the flight; no touching of hair of face, even if wearing gloves
• Disinfected cabins and high-touch areas using approved and recommended chemicals/agents
• Undergo regular Covid-19 self-testing
Workplace Safety
Various other tools have been introduced to coordinate Covid-19 information, policies and procedures so that Allstars and
guests receive the latest information to ensure their safety. These include:

Tool Description

Safe@Work Guide Launched in April 2020 on Workplace, the guide covers general Covid-19 knowledge, the
process for reporting cases, work arrangements and resources available for working safely
and staying up to date with Ministry of Health (MOH) directives.

Safe@AirAsia Knowledge Online library of all resources Allstars need for working safely and staying up to date. In
Library 2021, we regularly updated relevant procedures based on MOH’s recommendations.

Covid-19 Reporting Platform New reporting form implemented in February 2021 in RedEye, the Group’s incident reporting
platform, for better tracking of daily cases.

Covid-19 Standards Manual Published in 2021, this manual streamlines Covid-19 management across our AOCs to ensure
standardisation and sharing of best practices.

Allstar Office Guidelines

Temperature checks FACES activated Mandatory mask- Random Covid-19

prior to entering office turnstiles at office entry wearing testing
premises points

Regular disinfection of Maximum number of Covid-19 reporting

workstations users for meeting rooms internal portal so that
to enable effective office contacts are
social distancing traced and work space
sanitised

Allstars not performing critical operational roles were permitted to work from home unless their presence at the workplace
was required while a split-team approach was adopted for Allstars required in the office.
TALENT ATTRACTION & RETENTION

(i) Diversity & Inclusion

We recognise the value of diversity for the different perspectives that it brings which
enhances our decision-making. We do not tolerate any form of discrimination on the
basis of race, religion, cultural background, gender, age, sexual orientation, disability or
nationality. 65%
With our headquarters in Malaysia, and significant operations in Thailand, Indonesia
and the Philippines, we consider ourselves an Asean company. Diversity at Capital A 35%
does not stop with citizenship; we also seek to have a good mix of age groups and
genders. In 2021, the Group comprised a total of 14,778 employees, comprising 65% men
and 35% women.

Employee Breakdown Employee Breakdown

by Age Group by Employment Category and Gender

100%
4% 122 1,827 4,902 2,825

31% 80%

60%

40% 3,980

20% 45
65% 426 651

0
Senior Non-Senior Executive Non-Executive
Below 30 30-50 Above 50 Management Management

Male Female

Employee
EmployeeBreakdown byNationality
Breakdown by Nationality

4,000 3,772
3,375 Male Female
Number of Employees

3,000

2,076
2,000 1,750

1,116
1,000 948
490 548
181 98 223
54 83 51 3 10
0
Malaysia Indonesia Philippines Thailand India China Japan Others

In 2021, Capital A launched our first Diversity, Inclusion and Belonging survey to gather the views and perspective from Allstars
on how we are doing in these areas. The survey will serve as a baseline for us to develop strategies to deliver our commitment
to be a diverse and inclusive organisation. In 2022, we intend to set up a Diversity and Inclusion committee to oversee and
advance gender diversity and fair treatment of all Allstars across the Group.

We seek to be inclusive by treating all Allstars equally, without discrimination. All employment letters state clearly that any
form of racism or discrimination is not acceptable and will not be tolerated in Capital A.
Gender Equality
We strive for gender equity across the Group at all levels and occupations in our approach to employment and promotion.
The results of our decades-long effort to increase women participation in technical roles has borne fruit with the current
employment of 135 female pilots. However, we recognise that we still have a long way to go towards achieving gender
equality across the board, and having at least 30% women representation in junior management and STEM roles.

In March 2021, we organised our first speed mentorship programme in conjunction with International Women’s Day. The
initiative offers an opportunity for Allstars to meet and learn directly from some of our amazing women leaders at Capital  A.
This was followed by a second session in July featuring AirAsia Indonesia CEO, Veranita Yosephine, who spoke on Navigating
Your Career Path. In 2022, we will continue to strengthen our commitment towards women empowerment by inviting women
leaders in the industry to participate in this series.

In stepping up our efforts, we are also publishing our first gender pay gap statistics for Capital A for a broad understanding
of our current position. The table below shows our gender pay gap calculated on the basis of mean male and female salaries
within each job grade, excluding pilots, cabin crew and aircraft engineers.

Gender Pay Gap - Group-Wide excluding pilots, cabin crew and aircraft engineers

2021
Job Level Gender Number of
Percentage, % Pay Gap
employees

Male 14 58%
JG8 7.66%
Female 10 42%

Male 47 68%
JG7 -13.33%
Female 22 32%

Male 89 64%
JG6 7.96%
Female 49 36%

Male 232 58%

JG5 2.64%
Female 169 42%

Male 174 53%

JG4 -10.48%
Female 156 47%

Male 191 49%

JG3 -1.61%
Female 196 51%

Male 405 45%

JG2 -5.37%
Female 492 55%

Male 230 78%

JG1 14.11%
Female 66 22%

Note: (mean pay of female Allstars - mean pay of male Allstars)/mean pay of male Allstars *100

Based on our findings, we did not detect any systemic gender-based bias in our pay scales. The only job grade that stands
out with a gap approaching the 15% threshold that we have set internally as acceptable variance, taking into account
differences in job types and countries of employment, is JG1. JG1 includes Allstars employed in a broad range of jobs, from
supply chain workers to personal assistants. One explanation for the difference is that supply chain employees tend to be
predominately male and are paid as per market rate for those roles. The female workers in this grade tend to be in
administrative roles in corporate offices such as personal assistants and are benchmarked to similar roles. In 2022, we will
be expanding our analysis to include comparisons of job families to further improve our understanding of our employee
remuneration profile.
The table below shows gender pay gap data for the three main operation functions at our airline subsidiary. Unlike the
earlier functions, remuneration for these roles are tenure-based, measuring the individual’s flying hours and number of years
working at AirAsia. The differences in pay levels are due to a historical industry-level bias that produced more male pilots
and engineers. AirAsia has been making significant efforts to address this by employing and training more female pilots over
the past decade than any other airline in Asean. This is evident from the relatively high number of female AirAsia pilots in
2021 at 6.1% compared with the global average of 5.8%, according to Statista.com. We will continue to support women pilots
joining the ranks. As our current cohort of female pilots rise in seniority and flying hours, the pay gap will diminish over time.

A similar situation applies to our employment of aircraft engineers. The gender imbalance among engineers is an issue we
have tried to address. However, this is curtailed by fewer female aircraft engineers joining the workforce. As the sector
recovers, we will be able to consider devoting more resources into establishing a cadet programme for female aircraft
engineers and improving our sourcing to attract more applicants as this continues to be a challenge.

Gender Pay Gap - AirAsia

2021
Job Category Gender Number of
Percentage, % Pay Gap
employees

Male 1,062 97%

Captain -8.86%
Female 32 3%

Male 1,026 91%

First Officer -8.09%
Female 103 9%

Male 336 96%

Licensed Aircraft Engineer -12.73%
Female 15 4%

Male 152 82%

Other Engineer -23.34%
Female 34 18%

Male 981 32%

Cabin Crew 3.76%
Female 2,073 68%

Super Equal
At airasia Super App, women make up 52% of the total workforce.
The business also has one differently-abled Allstar on board.

Anti-Harassment Policy
On 1 November 2021, the Group published an updated Anti-Harassment Policy to replace the previous Anti Sexual Harassment
Policy reiterating our zero tolerance for harassment of any form. Allstars were made aware of the Anti-Harassment Policy via
email notifications, following which the policy has been made available on our shared drive which is accessible to all Allstars.
In addition, to create greater clarity on acceptable or unacceptable behaviours, our Employee Relations team is developing
an online e-learning module on harassment, which we hope to upload onto our e-learning platform in the first quarter of
2022. This module will be accessible to all current employees and introduced into the orientation training list for all new
employees. Allstars can also connect directly with the Employee Relations team via our askPAC should they have any query
or complaint with regard to harassment.

Reports on harassment will be investigated, and appropriate action taken against any employee found guilty. This includes
the possibility of dismissal.
(ii) Talent Attraction and Retention
After the Covid-19 pandemic, the industry is now at a recovery phase. The Group has been focusing on specific initiatives to
attract and retain talent post-pandemic to help strengthen our Employee Value Proposition. We have revised our overall
talent strategy to focus on a holistic approach focusing on catering to our Allstars profile specific to diversity, equity and
inclusion focusing on three main areas: Employee Engagement, Employee Benefits, Training and Development.

New Hires and Attrition Rate

All new hires undergo an onboarding programme through which they are introduced to the Group’s values, culture and policies
and are familiarised with our procedures and processes. During the reporting year, we hired 815 new Allstars. Our attrition
rate, meanwhile, was 15.4%, considerably lower than the 24.2% recorded in the previous year.

New Hires by Gender New Hires by Age Group

1.0%
51% 52%

49%
47%

Male Female Below 30 30-50 Above 50

Local Hiring
In our non-Airlines businesses, such as airasia Super App and Teleport, priority is given to internal employees and local
candidates when hiring. In 2021, 364 open positions were filled by internal candidates. Foreign hires are considered only
when we are unable to find suitable local candidates. All expatriate hiring follows procedures set by the relevant local
authorities, such as Malaysia Digital Economy Corporation (MDEC) for airasia Super App. For example, we advertise all
positions with basic salaries below RM15,000 per month on MYFutureJobs portal. Should no suitable candidate be found
after one month, we will apply for an exemption letter from MDEC for an expatriate hire.

Employee Benefits
We offer all our Allstars competitive remuneration and, along with their eligible dependents, packages that include travel and
medical benefits. Apart from hospitalisation and medical care coverage that is comparable with industry standards, we also
provide parental leave and flexi work options. We are also looking to add other benefits from the coming year. Full-time
employees are provided with free financial and emotional well-being programmes, a recognition programme, employee assistance
programme, daily subsidy for the in-house cafe, and facilities such as a creche, gym, rehabilitation centre, clinic and gaming
stations. Since the pandemic, we have instituted flexible work arrangements such as work-from-home where operationally feasible.
 Upskilling
We provide a host of development programmes and avenues through airasia academy allowing Allstars
to continuously up-skill and re-skill.

Career Advancement
Financial
We help Allstars to identify and leverage their strengths to open to new career opportunities through our
Well-being
internal talent marketplace powered by intuitive AI system EightFold. We also structure stretch assignments
through our AirAsia got Talent programme to help Allstars navigate their careers and create greater
transparency in career pathways.

Financial Health
We offer Financial Education on Debts/Personal Financial Management/Legacy Planning with AKPK , BNM
and other providers.

Flexible Working Arrangements

Depending on the role, we give Allstars the flexibility to decide on how they work best.

Work-life Support
We encourage rest and recovery through benefits such as Annual Leave.
Physical
Well-being
Travel Benefits
Allstars can enjoy our flights via employee e-coupons and ID90 for travel needs.

Medical/Life Benefits
We provide medical insurance along with benefits such as in-house clinic, physio and life and personal
accident insurance coverage.

Conducive Working Environment

We provide facilities such as an in-house gym and sleeping pods to ensure Allstars have a conducive
space to work and relax when needed.

Family Well-being
We offer paternity leave support, marriage leave and provide medical and bereavement support
through our Red Heart Fund.

Work Culture
Emotional
We strive for a culture of fun, openness and active communication through our dedicated internal
Well-being
platforms – EkoChilli and Workplace. Our Culture team hosts recreation and engagement activities as
well as talks on health-related topics.

Employee Assistance Programme

We offer our Alllstars access to our Allstar Health Coach – holistic well-being and wellness brand
Naluri, providing Allstars with easy access to a range of interactive and educational help online.

Parental leave statistics

Indicators 2021

Total number of employees who took parental leave Female 204

Male 107

Return rate of employees who took parental leave (%) Female 93.25%

Male 100%
Employee Incentive Scheme
In 2021, we introduced a Long-Term Incentive Scheme (LTIS) aimed at ensuring our continued ability to attract, retain and
motivate our top and key talents to meet the Group’s transformational aspirations. The LTIS will also help to align the
motivations of eligible employees to the corporate goals of Capital A and shareholder interests. We are also in the process
of establishing specific share options schemes for our major subsidiaries to ensure that we provide wealth creating opportunities
to Allstars in these subsidiaries linked to the shareholder value they create. We believe that the combination of these two
will create one Capital A culture, improve collaboration between the various businesses to create maximum shareholder return.

Employee Engagement
We have always sought to create a highly engaging workplace in which Allstars exchange ideas and opinions freely because
we value the input of all Allstars, and believe that open discourse engenders a sense of belonging which, in turn, enhances
work satisfaction and productivity.

Employee engagement at Capital A is designed along four pillars: well-being, information and support, learning and social.
Whereas before, a great deal of engagement took place physically, we are now using online platforms such as EkoChilli,
Workplace and Google Meet to keep Allstars updated on corporate-related news. There is also a great deal of interaction
among Allstars on EkoChilli. Certain teams have their own engagement platforms. For example, the tech teams in airasia
Super App engage on Confluence.

a) Town Hall Sessions

Town halls are held regularly in order for our CEO, Executive Chairman, President and other senior management to interact
with employees. Through town halls, Allstars are able to get the latest information from the management, ask questions and
provide feedback on matters that are important to them. In 2021, seven town halls were conducted virtually, focusing on
leadership changes, the acquisition of Gojek Thailand and our 20th anniversary, among others.

b) Brown Bag Series: Post-Covid World

We also launched a new engagement series where Allstars are able to clarify any doubts or uncertainties they may have
about the direction of the company post-pandemic by addressing their questions directly to senior members of the management.
Themes during the year included Flying in a Post-Covid World and Allstars’ Future Work Arrangement.

c) #AllstarsWFH Engagement Programme

To create a sense of normalcy with Allstars working from home (WFH), and to stay connected, we developed a weekly
#AllstarsWFH schedule featuring initiatives under the Learning, Social, Well-being and Information pillars.

Number of views garnered between June and December 2021:

21,500 8,095 16,033 29,570

views views views views

Well-being Learning Social Information

Employee Well-Being
In addition to their physical well-being, we also take steps to provide Allstars with mental health and emotional health
support. These are done through several key programmes.

a) Allstar Peer Support Programme

The Allstars Peer Support programme was created in 2020 to help Allstars manage emotional stress caused by the impact
of Covid-19. Allstars with emotional, financial, work or personal problems can reach out for help via EkoChilli, where peer
supporters will pick up requests and respond within 24 hours. A total of 157 Allstar Peer Supporters were recruited and trained
to respond to queries. In 2021, a total of 267 requests for support were received, down from 498 in the previous year,
reflecting the easing constraints faced by Allstars as recovery continues.
b) Allstar Health Coach programme
In 2020, the Group launched a holistic well-being programme with digital health and wellness brand Naluri. Through the
Naluri app, Allstars can benefit from remote therapy, fitness coaching, financial coaching and the advice of dieticians, doctors
and pharmacists. To date, a total of 2,100 Allstars have signed up for the programme.

Initiatives in 2021 included:

– 15 online webinars on health-related topics, financial education and emotional well-being with Naluri coaches/speakers
– ‘Leading with Compassion’ programme for managers with Naluri coaches via Naluri app (80 managers from the Group
enrolled)
– 16-week weight loss programme which attracted the participation of 100 Allstars

c) Aareena Oasis
Aareena Oasis, a professional mental health provider based in Malaysia, was added to our well-being network for us to
refer cases that require urgent support by psychologists/psychiatrists (either face-to-face or house visit).

(iii) Human Capital Development

We have a Learning and Development Policy that clearly states our commitment to developing a strong learning culture in
which we provide Allstars access to opportunities that will help them to grow with the Group as they achieve their full
potential. Despite the pandemic, we have strived to adhere to the spirit of this policy. While pilots and cabin crew have been
enabled to undergo their mandatory recurrent training, we encouraged all Allstars to reskill/upskill by acquiring digital expertise
at the airasia academy, and for young leaders, developed a customised programme with a renowned university on effective
leadership as our business recovers from the effects of the pandemic.

Digital Training
During the year, a total of 607 Allstars attended training programmes at the airasia academy, with Digital Marketing being
one of the most sought-after full-length courses. Other full-length courses attended were for: Data Analysts, Software
Engineering, Cybersecurity and Cloud Infrastructure. In addition, Allstars underwent a number of short courses, byte-sized
courses and Google Cloud Platform courses which they were able to complete in their own time.

Group-wide

Total amount spent for training 2019 2020 2021

Technical & Non-technical training programmes (RM) 12.5 million 13.4 million 10.5 million

Training investment Average training hours

RM213/employee 4 hours/employee

Flight-Related Training
Pilots are required to do a minimum of three take-offs and landings every 90 days in order to maintain their licence. In
addition, upon being reactivated for flying, they will undergo a flight crew activation course comprising a series of refresher
modules, checks, simulator training, exams and line flying under supervision to ensure full recency and proficiency to conduct
flights safely.

Pilots and cabin crew activated from furlough are required to undergo flight-related training focusing on reactivation training
and recurrent training. Pilots and crew activated from furlough are based on monthly projections on aircraft reactivation and
the capacity planning for each AOC.
During the year, three training programmes accounted for 80.2% of the total training hours of pilots and cabin crew. These
are described below.

Pilot Safety & Emergency Procedure Recurrent Training

Recurrent training (every six months) ensures pilots are kept abreast with aircraft systems, operational procedures and
requirements (including ground de-icing/anti-icing and pilot incapacitation). It also includes assessments of accidents/incidents
and determining their root causes. Training includes simulator rides, classroom work and tests.

Cabin Crew Recurrent Training

Recurrent training is conducted annually to maintain and enhance cabin crew members’ competence. The training comprises
hands-on and simulated exercises followed by exams on general elements such as first aid, as well as on aspects that are
specific to the different aircraft types.

Pilot Simulator Training

Average
No.of
Training List Programme 2021 training
participants
hours

Pilot SEP Recurrent 635 49

Cabin Crew Ground Training 1,088 42

Dangerous Goods Initial Training 165 21

Dangerous Goods, Ground Initial Training 65 21

Pilot Simulator Training 549 60

Employee Appraisal
In 2022, the Group introduced the Objectives and Key Results (OKR) framework into the Performance Management/Appraisal
for Allstars. OKR is a simple goal setting approach to create better alignment, engagement and clarity towards achieving
the Group’s overall business plan. Through this framework:
• Goals are set, tracked and re-evaluated quarterly
• Each team’s perspective and creativity are taken into account in a simple and fast-cadence process

OKRs provide many benefits, including clarity, enhanced communication and a coherent and transparent approach towards
achieving overall Group-wide strategy and objectives.

Focus Alignment Commitment Tracking Stretching

OKRs allow a team OKRs provide a OKRs demand a OKRs allow a team OKRs empower
to rally behind a method for the level of collective organisation to teams to set goals
small set of entire organisation commitment from track their progress that stretch beyond
carefully chosen to align its goals at the parties involved toward a goal and BAU - or “business
priorities every layer with its to choose and stick know earlier when as usual” and make
top-level priorities to agreed-upon to change tactics significant
and with its priorities meaningful change
ultimate purpose
COMMUNITY INVESTMENT

We have renamed our section on Corporate Citizenship and Philanthropy as Community Investment to better reflect the
emphasis placed on continuity and sustainability in our philanthropic endeavours. Since 2012, Capital A’s community engagements
have been undertaken primarily by AirAsia Foundation whose mission is to support social enterprises in Asean through the
provision of business grants, business mentorship and platforms that help them grow their market and attain self-sufficiency.
This mission helps deliver the Foundation’s vision to be a leading corporate citizen that contributes to Asean community-
building efforts in a way that stays true to Capital A’s entrepreneurial spirit.

The renaming also captures the help given to small businesses to transition to e-commerce via airasia travelmall (formerly
OURSHOP), Teleport and our new entities, especially airasia farm and airasia grocer.

In addition to the Foundation’s work, the Group stands ready to act in times of humanitarian need. Hence, our Community
Investment disclosure is divided into two sections - the first addressing our support of social enterprise and small businesses;
and the second detailing our humanitarian relief and rehabilitation activities.

The total value of Capital A’s community investment and humanitarian activities can be summarised as follows:

Type of Contribution Total (RM)

Cash contribution 139,996

Employee volunteerism during paid working hours 346,159

Contributions in kind 25,851

Management overheads 166,050

(i) Social Enterprise and SME Support

Since the pandemic, AirAsia Foundation has awarded only
one grant due to movement restrictions as well as reduced
activity of many social enterprises. In May 2021, Council
Members of the Foundation extended the suspension of the
grant programme for an additional year given continued
uncertainty over the pandemic. Instead, AirAsia Foundation
focused on providing skills support and platform building
activities for grant recipients and others.

A key activity was to monitor progress made by the 2020

grant recipient, Dusun Merdeka, in improving its cocoa
processing facilities, and purchasing beans from indigenous
farmers. Since receiving its grant in August 2020, Dusun
Merdeka has been able to expand its livelihood support
programme from benefitting 50 indigenous families to 150
families from three states across Malaysia, ie Pahang, Perak
and Sabah, that were facing economic hardship compounded
by the pandemic. With the farmers, Dusun Merdeka also
replanted over 100 native trees within the secondary forest
bordering Malaysia’s National Park, to create a natural
Cocoa fruit produced by the indigenous farmers in Pahang
environment for cocoa plants to thrive without pesticides.

Grant approved RM78,320

Amount disbursed as of 31 December 2021 RM60,000

Grant progress 77%

In February, AirAsia Foundation kicked off its mentorship activities by partnering with Angels of Impact Singapore in its
inaugural ASEAN Women Impacting Social Entrepreneurship (ASEAN WISE) incubation programme for women and indigenous-
led community-based enterprises. Over the course of the year, AirAsia Foundation delivered two masterclasses and provided
pro bono rebranding counsel to Maranao Collectibles, a Filipino social enterprise that aims to revive the fading art of weaving
in Marawi. The city of Marawi is still recovering from years of armed conflict that has displaced 98% of the local population.
In October, the Foundation also supported Malaysia-based P Lab in organising the BAIKSelangor business competition funded
by the Selangor State Government to promote products made by businesses in the state’s new villages.

In the area of direct business support, AirAsia Foundation continued to invest in growing its Destination GOOD social enterprise
shop. To manage costs and lower sales as a result of lockdowns, Destination GOOD closed its physical store in Kuala Lumpur
in November 2021 in order to concentrate available resources into growing its online presence. For the financial year ending
December 2021, the Foundation invested an additional RM80,000 in working capital for Destination GOOD. In turn, Destination
GOOD earned a turnover of RM50,767 through the sale of products by 26 social enterprises.

Separately, airasia farm collaborated with the Federal Agricultural Marketing Authority (FAMA), Ministry of Agriculture and
Food Industries (MAFI) and Department of Agriculture (DOA) to promote Harumanis mangoes grown by over 20 farmers across
Perlis. This initiative lead to 10.2 tonnes of mangoes being sold over a period of one month.

(ii) Humanitarian Relief and Rehabilitation

Covid-19 Response
Throughout 2021, Capital A persisted with efforts to encourage Allstars and members of the public to be vaccinated. We
deem this a clear priority to protect our people and guests in the immediate term and to help countries get on the path of
economic recovery over the longer term.

From June to July 2021, Allstars volunteered at Mega Vaccination Centres in Kuala Lumpur and Selangor to support Malaysia’s
mass vaccination drive. A total of 509 Allstars performed non-clinical roles from registering and monitoring the temperature
of vaccine-takers to crowd management.

Vaccination campaigns were also organised at the Group’s offices in Jakarta and Kuala Lumpur. In May 2021, a special
vaccination drive was arranged in RedHouse, Jakarta, benefitting 1,689 Allstars. In July 2021, a similar drive was conducted
in RedQ, Sepang, where 283 Allstars and 637 family members and friends were vaccinated. A total of 95 Allstars volunteered
at these events to manage traffic flow and ensure adequate social distancing.

To help our colleagues in Jakarta cope during a peak infection period in July 2021, AirAsia Indonesia distributed Covid Care
Kits to 1,578 Allstars, including those infected with mild symptoms, to aid in their recovery. Each kit contained multivitamins,
hand sanitisers and face masks.

In April 2021, AirAsia Philippines distributed 1,500 REDy Care Kits containing face masks, hand sanitisers and alcohol wipes
valued at RM5,500 to travellers at Terminal 3 of the Ninoy Aquino International Airport. AirAsia Philippines also supplied 100
medical kits valued at RM8,154 to infected Allstars to help them monitor their health status. Each kit was equipped with a
thermometer, an oximeter as well as basic medicines such as paracetamol, cough syrup and vitamins.

Red-Q PPV for Allstars, family members and friends Vaccination drive in RedHouse, Jakarta
Post-disaster Response
The Group’s humanitarian activities also focused on supporting communities affected by climate-related disasters. In December
2021, in response to severe floods in many parts of Peninsular Malaysia, AirAsia Foundation and BigPay launched a public
donation drive to raise funds to rebuild damaged community infrastructure. During the campaign, AirAsia flights carried
donation boxes while BigPay enabled a donation channel on its app. A donation of RM1 per booking was also contributed
by airasia ride and airasia food for a limited period. Organised between 22 December 2021 and 31 January 2022, the campaign
raised a total of RM574,000 which will be distributed to non-profit organisations and community groups identified by AirAsia
Foundation.

In tandem with the public donation drive, the Group’s People and Culture department created a mutual support programme
to connect staff who were affected with those who wanted to help. In total, 86 affected Allstars received RM22,650 in
donations from fellow Allstars and RM22,277 from the company’s Red Heart Fund, a special fund that provides ad hoc
assistance to Allstars in need.

In the same month, AirAsia Philippines deployed immediate assistance to 119 Allstars impacted by Typhoon Odette which
struck the Visayas area of the country affecting Cebu, Puerto Princesa, Tacloban and Tagbilaran stations. Donations totalling
RM9,700 in the form of essential goods, water and cash were distributed to survivors.

(iii) Other Activities

In addition, Capital A organised ad hoc activities during festive periods and in response to specific appeals. Some of these
activities are listed below.

Campaign/Entity Description

AirAsia Indonesia Berbagi Pahala Allstars donated RM2,909 to children in four orphanages in Jakarta.
Ramadhan

#AllstarsDOGOOD Christmas Sharing Allstars distributed hot meals sponsored by airasia grocer partners to 80 children
from two Klang Valley orphanages.

#alwaysREDy Christmas Sharing Allstars donated RM2,458 in food, toys and clothes to children at the Asilo de San
Vicente de Paul Orphanage in Manila.

#alwaysREDy Extra Mile Campaign AirAsia Philippines provided free flights for Operation Smile, an international charity
that helps children undergo corrective surgeries for cleft lip and palate deformities.

airasia grocer Donated surplus food and vegetables to Zoo Negara Malaysia to supplement the
nutritional needs of animals at a time when the zoo was facing a financial crunch
as a result of pandemic-imposed closure.

Flood Relief for #TeamTeleport The floods in December affected several Allstars including #TeamTeleport. In response,
we organised a fundraising campaign from 22 December until mid January 2022.
Financial relief was then channeled directly to the affected Teleporters, with each
Teleporter receiving RM500 and an additional RM500 for each dependent. #TeamTeleport
also came together to help with the post-flood clean up.
(iv) Human Rights
We are committed to ensuring our operations are free from unethical labour practices such as forced labour, child labour
and all forms of discrimination. Our code of ethics, which is available to Allstars and external stakeholders, clearly communicates
our commitment to conducting our business fairly, impartially, ethically and with the utmost regard to safety. Underlining our
commitment to human rights, we launched a Diversity, Inclusion and Belonging survey; reviewed our Sexual Harassment Policy;
and improved our Anti-Human Trafficking Training. As human trafficking often involves air travel, our Foundation has developed
a #Know the Signs programme so Allstars will be able to recognise signs of human trafficking and respond appropriately.
Training has been held regularly since 2017.

In 2021, AirAsia Foundation updated its Anti Human Trafficking training to incorporate trafficking patterns and the modus
operandi in Thailand, Indonesia and the Philippines. This is to ensure all frontline Allstars are able to recognise signs of
human trafficking at all the major hubs. A total of 10,053 Allstars (71%) completed the #Know The Signs Anti Human Trafficking
training during the year, marking a 33% improvement from 2020.

Reporting Process
The process to report a suspected case of human trafficking is as follows:
1. Crew receives a request for assistance from a suspected victim or spots a suspected victim.
2. Crew cross-checks signs with senior crew or purser.
3. Senior crew/purser notifies the captain.
4. Captain radios for ground support.
5. Where present, AirAsia security personnel accompany airport security officers to meet aircraft upon arrival at destination.
6. Suspected victim is interviewed by law enforcement officers.
7. Cases requiring social worker support will be referred to AirAsia Foundation’s NGO partners, if available, at destination.
8. Crew records observations and actions in a dedicated #KnowtheSigns form in the Group’s Coruson reporting app.

In 2022, AirAsia seeks to develop a human rights policy. In order to ensure there are no gaps in the policy, a focus group discussion
will be organised to discuss the policy and the Group’s human rights risk exposure, followed by planning of remedial actions.
 Our Entities
Most of our non-airline businesses are relatively new and have only recently embarked on the journey of monitoring and
reporting on their sustainability initiatives. During the 2021 materiality survey, we asked our stakeholders to assess the material
matters that they believe our entities should consider. This, together with our entities’ own input and industry best practices,
enabled us to identify the most pertinent matters related to their businesses. Moving forward, all our entities will strengthen
their sustainability performance and expand on their disclosures.

AIRASIA SUPER APP

airasia Super App is a travel-led lifestyle

platform for everyone. In this report, airasia
Super App will be disclosing its initiatives
and performance under the following material
Guest Experience Technology Health & Safety
matters:
Innovation and
Information
Security
GUEST EXPERIENCE

The different platforms on our Super App have their own policies and service level standards to drive a constantly high level
of customer experience.

Service Policy/Commitment

airasia food • Customers to receive meals within 45 minutes from ordering, with up-to-date notifications
• Ensuring >95% completion rate (allowing for unforeseen circumstances, eg inclement weather)
• Riders to be well-groomed with clean/neat delivery bags

airasia xpress • Customers to receive shipments within one hour for 'Instant' service and four-six hours for 'Same Day'
service, with up-to-date notifications
• Ensuring >95% completion rate (allowing for unforeseen circumstances, eg inclement weather)
• Riders to be well-groomed with clean/neat delivery bags

airasia ride • Customers to be picked up within 10 minutes from booking their ride
• Ensuring >85% completion rate (allowing for cancellation due to unforeseen circumstances, eg weather)
• Well-groomed drivers with clean and well-maintained cars

Hotels & SNAP • Instant confirmation for customers

• Live chat (AVA), email/eform and social media to support customers and partners

Flight OTA • Instant confirmation but can go up to 24 hours for bookings to be confirmed
• Live chat (AVA), email/eform and social media to support customers and partners
In order to meet these standards of delivery, various initiatives have been implemented.

Initiatives to improve users’ and customers’ satisfaction

Service Initiatives

• Training for riders/drivers

Food/express/ride • Increase density of riders/drivers in peak locations
• Increase up-to-date communication for consumers through app push notifications

• Work with inventory providers to create SLA for booking confirmation to minimise complaints
Flight OTA • Ensure post-booking messages are clear
• Instant email notification to customers to update them on their booking status

Hotels & SNAP • Instant email notification with details sent to customers upon booking

• Instant email notification on flight changes, and steps to obtain access to service recovery plans on
AirAsia Flight
AVA in the event that new schedules are not acceptable to guests

• Automate customer claims when refunds are needed for new LOBs
Refunds
• Minimise refund-prone scenarios by authorising payment from the user and only capturing it when the
Automation
service is delivered or confirmed booked by the third party

As part of its customer service promise, airasia Super App offers a range of different platforms on which customers and
guests can engage and connect, to suit their preference.

Platform Engagement Channel

Delivery: airasia AVA, NPS, feedback widget, social media live chat, direct calls/chats
food, airasia
xpress, airasia
ride

Hotel & SNAP AVA, NPS, feedback widget, email/e-form, social media

Flight OTA AVA, NPS, feedback widget, email/e-form, social media

TECHNOLOGY, INNOVATION AND INFORMATION SECURITY

In 2021, airasia Super App was acknowledged by Credit Suisse as being one of only three unicorns in Malaysia, with an
estimated value of more than USD1 billion. This has been achieved through constant innovation to introduce more products/
services that meet consumers’ everyday needs. During the year itself, the Super App expanded its lines of business to include
four more products.

New products/services introduced on the airasia Super App in 2021

Initiative Description When launched

Allows guests to book flights beyond AirAsia – ie on more than 700 other airlines to October 2021
Flybeyond
over 3,000 destinations.

airasia ride An e-hailing product. August 2021

airasia xpress Parcel delivery product. November 2021

Food delivery product, enhanced with cuisine recommendations based on users’ April 2021
browsing/purchasing trends. A merchants’ app, called airasia friends, enables
airasia food
restaurants to manage their menu, opening hours and order acceptance. During the
year, airasia food also expanded to Thailand.
Moving forward, the product and technology team of airasia Super App will further improve the customer journey by integrating
Global Distribution System (GDS) and channel managers to offer better flight and hotel content, and developing an integrated
app for all delivery drivers/riders.

Other improvements include:

• Integration of quantum metrics for continuous product development, to recognise and fix potential improvement opportunities
on the ecosystem
• Integration of richer sources of content for Travel to offer more convenient options to users
• Rollout of the Authorise/Capture approach to all LOBs
• Quick access to Upcoming Status of orders

HEALTH & SAFETY

Because of the nature of its products and services, airasia Super App has put in place policies and processes to protect both
its service providers and users.

airasia ride
To ensure the safety of drivers and guests, both are equipped with emergency call buttons on their respective apps enabling
them to seek emergency assistance, if needed. Additionally, all drivers are vetted before being on-boarded onto our platform,
while guests are able to share their live trip location with others so their whereabouts can be tracked easily.

Additional initiatives to ensure the safety of drivers/passengers

Key Initiative Description

Driver training All drivers are required to go through training on safety, etiquette and driver application usage

e-hailing Drivers are required to have e-hailing insurance to protect themselves, passengers and the vehicle in
insurance the event of an accident

All drivers will be required to undergo basic health screening from local healthcare facilities prior to
Health screening
obtaining their e-hailing licence

While the pandemic is ongoing, the following measures are being implemented.

Key Initiative Description

Vehicle
Drivers are required to regularly sanitise their vehicles
sanitisation

Hand sanitisers Incoming passengers are offered the use hand sanitisers

Masks on Drivers are required to have their masks on at all times

Drivers are encouraged to be vaccinated, with a status sticker awarded to those who are fully
Vaccination
vaccinated

MySejahtera
All vehicles are equipped with the MySejahtera QR code
Scanning
BigPay is our fintech company and, according to the UK’s
Business Financing, the most-searched for digital bank in
Malaysia. The company is committed to democratising financial
literacy, accessibility and well-being in the Asean region by
providing accessible, transparent, simple and secure digital Corporate Guest Technology
financial services. In this report, Big Pay will be disclosing its Governance Experience Innovation and
initiatives and performance under the following material Information Security
matters:

CORPORATE GOVERNANCE

To ensure regulatory compliance, BigPay has put in place systems and processes to ensure adherence to the Anti-Money
Laundering Act 2001 (AMLA). This is important given that its operations revolve around financial transactions.

Initiatives geared towards AMLA compliance:

• Enhanced due diligence review of correspondent agent onboarding, followed by periodic reviews to ensure agents adhere
to AMLA requirements
• Enhanced customer risk assessment
• Enhanced real-time transaction monitoring system logic and threshold, segmented by customer risk profiles, to capture red
flags and for prompt submission of suspicious transactions reports (STR) to regulators

GUEST EXPERIENCE

BigPay has established the following channels on which to engage with its customers: chat, email, phone and social media
(Facebook,Twitter and Instagram). To ensure a consistently good customer experience, it has set the following service delivery
targets:
• < 6 hours for first email response
• < 10 minutes chat handling time
• < 5% chat abandoned rate
• At least 85% Customer Satisfaction score
• < 10 hours first response on social media
• < 24 hours total resolution time for social media
Previously BigPay’s Customer Relationship Management (CRM) system would send an automated satisfaction survey once a
ticket was solved. In 2021, it introduced customer satisfaction surveys within the Live Chat platform to help identify key areas
of improvement and enhance the customer experience.

Given the frequency of online scams, BigPay has taken the following measures to educate and protect customers from being
victims of fraud:
• “Do not share” advisory as part of each SMS OTP/Link; and periodic reminders on the same
• Periodic updates on social media on the Do’s and Dont’s to protect against scammers/fraudsters
• Periodic updates on BigPay’s website to raise customer awareness of scams and app security
• Increased internal controls to limit exposure of customers’ Personal Identifiable Information (PII)
• Increased controls when populating customers’ contact book information to BigPay’s P2P Friendslist
• Collaboration with regulators/enforcement agencies to improve current scam prevention as well as updates on potential
scam trends

TECHNOLOGY, INNOVATION & INFORMATION SECURITY

The following Innovations were introduced in 2021 to further strengthen the BigPay platform, as well as to expand its reach.

Migration to GCP Malaysia data were migrated from on-premise storage to Google Cloud Platform (GCP)

ebelia BigPay was part of Malaysia’s ebelia programme

Bill Payments MY Enable people to pay multiple bills to a variety of merchants

China Union Pay transfers Enable money transfers to China using China Union Pay

Singpass onboarding Utilise Singapore’s Singpass to simplify the onboarding process

Personal Loans MVP Implementation of personal loans as part of BigPayLater

Reduce Fraud Attack Limit the number of accounts per device

Surface Limit auto top-ups
Device binding (ie registering a user’s device as a trusted device for banking)

Cash top-ups Enable users to top up their BigPay accounts with physical cash

Virtual cards Virtual cards (no plastic) for online purchases and additional security

In 2022, there are plans to integrate BigPay’s systems with PayNet to offer personal loans, and to use the Security Operations
Centre to onboard new services.

To protect customers’ data and tighten its general cyber security, BigPay is guided by the following policies/strategy.

T e c h n o l o g y a n d C y b e r An overarching framework to formulate the approach, process and scope of coverage for
Security Risk Management technology risk management. This covers the responsibility for all the three lines of defence
Framework to ensure appropriate levels of risk identification, assessment, mitigation and monitoring are
established. A governance framework including a risk committee has been put in place to
ensure appropriate oversight.

Access control, IT Asset, These policies have been formalised to ensure compliance with regulatory requirements. Together,
Cryptography, Software they ensure appropriate safeguards to protect against reputational, regulatory and financial
Development Lifecycle, Change risks as well to protect the confidentiality of customer data and maintain satisfactory system
Management, Incident uptime and performance.
Management, Data Security,
Network Security, IT Resilience,
Cyber Security Operations,
Cyber Security Assessments,
Third Party Service Provider
Management, Security
Awareness & Training policies
Meanwhile, the following measures are taken to ensure the security of sensitive financial data in the BigPay app:
• Authentication: Establishes the identity of both the sender and the receiver; uses trusted third parties that verify identities
in cyberspace
• Non-repudiation: Ensures that transactions cannot be repudiated or presents undeniable proof of participation by both
the sender and the receiver in a transaction
• Authorisation: Establishes and enforces the access rights of entities (both persons and/or devices) to specified computing
resources and application functions; also locks out unauthorised entities from physical and logical access to the secured
systems
• Integrity: Assures that data have not been altered
• Confidentiality: Assures that no one except the senders and receivers of data can actually understand the data

As a result of the various security systems and processes in place, there have been no information security breaches or other
cybersecurity incidents in BigPay.

BigPay Goes Green: Initiatives for the Environment

In July 2021, BigPay joined Every Action Counts, a new coalition that connects experts to share best practices on how to address
nature conservation and climate change with some of the world’s leading digital financial platforms. This first step marks our
platform’s journey to empower users across Asean to lead greener financial lives.

BigPay and APE Partnership

From 1-30 November 2021, BigPay partnered with Animal Projects
and Environmental Education (APE Malaysia) to plant one tree
on behalf of each of the first 1,000 users that made water bill
payments via BigPay. The aim was to create environmental
awareness and to motivate users to get involved in climate
protection initiatives. The contributing users were provided with
a photo, as well as an e-certificate with the GPS coordinate of
their planted trees as an acknowledgement. At the end of the
programme, over 1,100 trees were planted in Lower Kinabatangan
region in Sabah, with BigPay making its own contribution of
100 trees.
Teleport is the cargo and logistics arm of Capital A, offering air cargo,
courier and freight forwarding services as well as door-to-door delivery.
Utilising AirAsia’s extensive network and aircraft fleet enables Teleport to
deliver cargo to a wide range of locations quickly and seamlessly. In this
report, Teleport will be disclosing its initiatives and performance under Climate Strategy Health & Safety
the following material matters:

CLIMATE STRATEGY

Teleport plans to achieve carbon neutrality by 2050 in line with the Group’s target by reducing its carbon emissions and
investing in science-based solutions that help protect the environment and promote sustainable development. Recognising
that its activities impact the environment, in 2021 Teleport started to monitor its cargo traffic data.

Indicators 2020 2021

Revenue tonne kilometre 28,104,356 12,843,142

Available tonne kilometre 1,931,998,935,734 418,024,291,581

Tonnage carried 60,034,549 26,979,543

Tonnage available 572,123,513 188,890,000

Increase in e-commerce and the corresponding growth in demand for transportation solutions have provided Teleport with
a competitive advantage. In 2021, with international borders still closed, it utilised AirAsia aircraft cabin space by carrying
cargo on the seats. Through technology, meanwhile, the team has managed to improve its load planning activities, ensuring
all aircraft belly space is fully utilised.
Climate change adaptation

Teleport’s BCP: We have identified mitigation measures for climate change adaptation in the event of disruption to our
business or supply chain. This includes protection of employees, alternate warehousing locations, contingency and emergency
response plans.

To reduce its Scope 3 emissions, Teleport uses AI technology for algorithmic batching where deliveries are grouped by proximity
to ensure delivery efficiency and, subsequently, reduce the distance and number of trips made per delivery partner.

Smuggling
During the year, there was one incident of smuggling of an illicit substance and one
incident of wildlife smuggling. These incidents were reported to the police and the
smuggled items confiscated by the Royal Malaysian Customs Department. The shippers
concerned were also alerted in order for them to tighten their security processes.

HEALTH & SAFETY

The health and safety of our people and delivery partners is of paramount importance. During the reporting year, we conducted
several key activities to maintain a healthy and conducive workplace for our Allstars.

Initiative Description

Engagement with Delivery Initiative with delivery operations to obtain feedback from drivers with focus on road safety
Ops Riders/Drivers improvements

Office Fire Safety & First Carried out for Teleport office locations to ensure emergency response preparedness
Aid Inspection

Management of Distribution of RTK antigen self-test kits to all Teleport office locations and data collection
Operation Teams Covid-19 of utilisation rate of kits
Self Testing

Safety awareness Positioning of safety visuals across Teleport’s operational areas and regular safety briefings
campaigns conducted to ensure high awareness of safety

Ensuring all SOPs are practised at work locations and timely reporting of positive Covid-19
Covid-19 response cases. Contact tracing and isolation of close contacts carried out and immediate follow-up
on Allstars’ condition & well-being

Safety Elements for Introduced safety elements pertaining to road safety in the training material for contract
delivery ops training and crowdsourced drivers/riders

Initial and recurrent safety management training carried out for all operational employees,
Formalised safety
covering Teleport’s safety policy and objectives, safety risk management, safety assurance
management training
and safety promotion aspects