AB25: AirAsia Group chief executive Tony Fernandes

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By: Tony Fernandes

Group Chief Executive
AirAsia

 

"When I look back at our journey, I see how fine the line can be between brillaince and stupidity" 

 

tony fernandes
 © Law Kian Yan

On 13 October, less than nine years after a dream called Air-Asia became reality, the 100 millionth "guest" was flown on our airline. It takes some getting used to, realising that the AirAsia team has truly given birth to a low-cost airline that has spearheaded a real change in the travel landscape of South-East Asia.

I never actually thought I had the balls to do it, especially in a region where low-cost travel just hadn't been invented and national carriers ruled the roost. When I look back at the AirAsia journey, I see how fine the line can be between brilliance and stupidity. So far, with a mixture of perseverance and stubbornness, we've managed to stay on the right side of this line.

This spirit has brought us to the AirAsia of today. It took seven years, for example, to get onto the Kuala Lumpur-Singapore route. Now AirAsia is the second-largest carrier in Singapore and growing fast.

My first idea was to have a low-cost long-haul carrier - I wanted an airline that would fly between my home country, Malaysia, and the UK. That was a journey I desperately wanted to do when I was at school in the UK but couldn't because the fares to return home to Malaysia were just too high.

At the genesis of AirAsia, I was persuaded not to go the long-haul route (something I have returned to, of course, with AirAsia X) but to go short-haul. From the start, the feeling was that there was a great opportunity to become the Southwest or Ryanair of Asia.

But it has always been tough. Every day in those early times was a matter of survival, but we just grew and grew. AirAsia has been a kind of people's revolution: we have uncorked a pent-up demand for low-cost air travel in this region.

Back in 2001 I never envisaged so many other ventures sprouting out from this "little" airline - we have created a whole new industry around AirAsia: one that has affiliates in Thailand and Indonesia, a long-haul sister and an airport. However, this is a frustrating kind of "fake" business, and it is one that has to evolve. One thing that has to change is the ability to trade and invest freely across borders. Nationalistic traits should also become less important. AirAsia acts and thinks regionally and that's a good thing.

I've always believed airlines try to do too many things themselves, which is why they are such poor users of capital. Airlines must have a razor-sharp focus on what their mission is. Over the next 10 years, there will be an even greater distinction between those businesses that offer long-haul service and those that provide a short-haul product.

It is no surprise that the most successful airlines are those that pursue one or other model: Southwest, Ryanair and AirAsia in the short-haul arena, and Cathay Pacific, Singapore Airlines and Lufthansa in the long-haul field.

The two models can co-operate, but you will see more network carriers getting out of the short-haul business and sticking to serving the longer-distance routes.

My ambition is to lead an airline that is a great place to work, has a highly motivated team, keeps its entrepreneurial culture and one that has a phenomenally strong presence in South-East Asia. I also want to lead one that can withstand oil prices of $150 a barrel and still make a profit.

 

COVER STORY: JUNE 2009

tony fernandes

In his second of two cover interviews, fernandes reflects on swapping the music business for aviation and overcoming obstacles to build Asia's largest low-cost carrier.

 

FROM THE ARCHIVES

"For the first time, in 2009, we really see AirAsia's true potential," says Fernandes, with a satisfied grin. "I've had a lot more white hair in the process, but it has been worth it."