The sky's the limit for AirAsia

He dares to be different in the skies with a philosophy that his budget airline has to always put bums in seats and that's why AirAsia is the soaring talk of the town.

Tony Fernandes's long-term vision is to be Asia's biggest low-cost carrier and he makes no bones that it's a dog-eat-dog business with absolutely no room for complacency.

"We are certainly now Asia's largest discount carrier. We stretch from India to Japan and we're the only airline that has the breadth of coverage," says the 52-year-old chief executive, globally famous for co-founding AirAsia, which has grown the ailing Malaysia-based domestic carrier into Asia's largest airline group with operations in five countries.

"We're in the domestic market in India, we are in five other domestic markets, we're very deep into China. So I'd say our vision is maybe 30 per cent to 40 per cent of where we can eventually be."

He's the founder of Tune Air Sdn Bhd, which introduced the first budget no-frills airline to Malaysians with the tagline "Now everyone can fly". His low-fare success story is so public in Asia that it continues to inspire tremendous competition, which he heartily welcomes.

"If someone is better than us and we get our a** kicked, then we need to get our a** kicked. Competition is the best form of motivation, the best form of becoming better, and I like competition. It keeps me hungry, keeps me going," he told Bloomberg in an August interview.

DREAM TO OWN AIRLINE

He recollects his teenaged years in Kuala Lumpur: "I wanted to own an airline. I said that to my father. He said: 'You make it past the doorman at the Hilton Hotel, I will be pleased.' Those were the exact words. I still remember that!" Mr Fernandes said in the Bloomberg interview.

He studied at Epsom College and the London School of Economics in Britain and qualified as an Associate Member of the Association of Chartered Certified Accountants in 1991 and Fellow Member in 1996.

In 2010, he was named Businessman of the Year by Forbes Asia. Five years later, he was included in the TIME 100 list, the magazine's annual list of the top 100 most influential people in the world.

Straight to the nuts and bolts of the airline business, he says: "The biggest issue remains airline ownership restrictions. We want ASEAN to become a single market so we should start behaving like one, and we're getting there slowly with ASEAN Open Skies finally becoming a reality.

"But I don't think the idea of national carriers is still relevant, and we certainly don't need 10 of them. We should allow ASEAN airlines to own each other so we can raise more investment and make better use of capital."

KEY STRATEGIES

His key strategies for growing the business in the region?

He replies confidently: "We have been working hard to connect the dots in our network both to leverage economies of scale to keep costs low and also improve our menu of destinations for guests travelling within the region.

"We've also started to slowly introduce more destinations beyond ASEAN, such as to Auckland, Teheran and Mauritius, which really differentiates us from other low-cost carriers in the region. It also creates fantastic Fly-Thru opportunities for guests who can travel from Tokyo to any of our destinations in Asia-Pacific, the Middle East and Africa, with just one short stop at key hubs like Kuala Lumpur and Bangkok."

Looking back, he says AirAsia's presence in ASEAN has contributed to the growth and connectivity of the region.

He elaborates: "We have carried over 330 million guests since AirAsia started operations in 2001. Many of our guests have never flown before but we made it possible by offering low fares. AirAsia has made ASEAN smaller and helped to facilitate trade links where there were none before. Before we started flying to Bandung, no one really knew about it, aside from music people like me who went looking for dangdut artists. But now you have Malaysians and Thais going there to source for clothing and other goods for their businesses," he says.

"We're proud that we've been able to create thousands if not millions of these opportunities across the region by putting bums in seats."

Smooth skies can never be taken for granted and he anticipates some key risks for the business going forward.

He says: "All airlines worry about oil but we don't see that as a major risk going forward. In any case, we have in place hedging strategies to deal with high prices and we've survived oil at US$150 before, so it's something we know how to deal with. What is more of concern is political risk, which is far more unpredictable."

HONORARY AWARD

His dare-to-be different philosophy has earned him the EY ASEAN Entrepreneurial Excellence award this year. It is a honorary award that is presented on board the EOY platform and recognises successful South-east Asian businesses that contribute to the economy and community in the region.

Max Loh, ASEAN and Singapore managing partner, Ernst & Young LLP, says: "From being an auditor to a music executive before buying over a loss-making airline, turning it around and transforming AirAsia to become an award-winning low-cost carrier, Tony's entrepreneurial journey is truly distinctive and inspiring.

"AirAsia has helped to boost intra-regional connectivity and bring the world closer to South-east Asia with its network. This has had a significant positive impact on the region's movement of trade and people, as well as labour opportunities, exemplifying the far-reaching socio-economic contributions that a single entrepreneur can have as a game-changing industry leader."

This article was first published on October 24, 2016.
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