Visionary

Congratulations Tony!

December 5, 2010
Launch of Tune Talk

Forbes Asia has named Datuk Seri Tony Fernandes, chief executive officer of AirAsia Group, as its 2010 Businessman of the Year.

Tony on the cover of the December issue of Forbes Asia

Forbes said in a statement that the 46-year old Fernandes, a former record company executive, took over Malaysia’s then-ailing AirAsia in 2001 and re-launched it as a no-frills airline in the mold of Ireland’s Ryanair, successfully building it into Southeast Asia’s hottest global brands.

AirAsia CEO Datuk Seri Tony Fernandes

The 46-year-old charismatic Malaysian entrepreneur and the founder of Tune Air Sdn Bhd introduced the first budget no-frills airline, AirAsia, to Malaysians with the tagline “Now everyone can fly”.

Now everyone can fly.

Fernandes transformed Asia-Pacific air travel by introducing the low-cost concept and pushing countries to free up their airline markets. After AirAsia blazed the trail, some two dozen other budget carriers followed, both new stand-alone and low-cost subsidiaries of full-service carriers.

Yet the original still flies higher. Today AirAsia is the region’s largest low-cost carrier, with nearly 8,000 employees, 100 planes and 140 routes–including 40 that no airline had served before. From its hubs in Malaysia, Thailand and Indonesia, AirAsia flies throughout Southeast Asia, to numerous cities in China and India, and long-haul to South Korea, Japan, the Middle East, Australia and Europe. It is estimated that up to half its passengers are first-time fliers.

These new travelers have turned Fernandes into a bona fide celebrity, approaching him in shopping malls and airports for an autograph. Rarely seen without his trademark red baseball cap and ready grin, he welcomes the attention, not least to relieve stress.

“It’s a very depressing business, the airline business, with all the politics, all the rubbish, volcanoes,” he says.”But if I want to get a high, I just walk down to the terminal, and see the numbers of people who want to take photographs with me. It’s not the vanity part. It’s that we have genuinely changed people’s lives by allowing them to travel. Regularly, an old man will come up to me and say, ‘I never thought I would be in a plane before I died, but now I can be.’ Or ‘Now I can go home and see where I was born.'”

It’s been a decisive year for AirAsia, and that’s why the 46-year-old Fernandes is FORBES ASIA’s Businessman of the Year. The Malaysia-listed parent company, AirAsia Bhd., saw first-half revenue grow 18% year-on-year to $562 million, while net profits grew 24% to $131 million. The company may pay its first dividend this year or next. Meanwhile offshoots in Thailand and Indonesia have turned profitable, and are slated for listings next year.

Also soon to list is AirAsiaX, the 16%-owned venture that launched the group’s first long-haul flights in 2007. Other investors include Air Canada’s Robert Milton, Richard Branson’s Virgin Group, Bahrain’s Manara Consortium and Japan’s Orix. Fernandes calls it “AirAsia on steroids,” with fares as low as 50% below legacy-carrier prices for flights from Kuala Lumpur to Australia, Tokyo, Seoul, Jeddah, Tehran, London and, soon, Paris and Christchurch.

AirAsia X

Intercontinental flights helped the AirAsia group pass the 100 million-passenger mark in October. Other boosts have come from occasional free-ticket campaigns, giving away up to a million seats at a time. These promotions have helped the group’s website, AirAsia.com, become Asia’s second-biggest e-commerce site in terms of both visitors and sales volume, by the company’s reckoning.

But whether it’s Web stats, industry awards or sheer sales in a hotly contested marketplace, AirAsia stands out as one of Southeast Asia’s very few big corporations earning world recognition, without relying on a political connection, government concession or protected market.

“Dare to dream” is one of Fernandes’ slogans. “We took on a government airline and won,” he says, referring to Malaysia Airlines.

Malaysia Airlines

AirAsia resembles low-cost carriers around the world in most ways: online booking, no free meals or drinks, a simple fleet lineup, a focus on short- and medium-range flights, quick turnaround times in airports. But one difference is its development of a networked structure which allows AirAsia to work efficiently across borders.

It has set up two 49%-owned subsidiaries abroad, Thai AirAsia and Indonesia AirAsia, and contemplates similar ventures in Vietnam and the Philippines. Without this approach, AirAsia would be confined to flying back and forth from Malaysia.

Commenting on the award being conferred on Fernandes, Tim Ferguson, Editor, Forbes Asia, said that the competition was tough, including from leaders of Forbes Asia’s Fabulous 50 companies.

“Although several mainland Chinese entrepreneurs fully came into their own this year, in general they are still excelling in a single national market that is subject to domestic booms and busts. Fernandes is expanding his business outward,” he said.

Fernandes’s improbable route to the airline industry started with Tupperware. At the age of six, he began his career playing the piano for guests at sales parties hosted by his mother, an entrepreneurial-minded music teacher who launched the plasticware company”s direct-marketing business in Malaysia.

Working the national Tupperware circuit was an education in marketing. And it exposed young Fernandes to the world of commercial aviation.

“I had a lot of happy times in airports. I told my parents that one day I wanted to own an airline. My father told me if I can make it past the doorman at the Hilton Hotel, he will be very happy,” Forbes quoted Fernandes as saying.

Funded by his mother’s plasticware sales, Fernandes flew to England at the age of 12 for boarding school at Surrey’s Epsom College.

Epsom College's main building and lawn

One lasting lesson was the prohibitive cost of a ticket home between semesters. So he spent holidays in London, mostly at Heathrow Airport.

“I was a bit of a planespotter. My friends and I used to stand on top of the Queen’s Building, Car Park 2, and just watch planes land,” he said.

The launch of Europe’s first no-frills carrier, Skytrain, by Sir Freddie Laker also inspired Fernandes.

Sir Freddie Laker waving a flag at the launch of Skytrain

And after spending 14 years in the music industry — first in London as financial controller at Richard Branson’s Virgin Group, then in Kuala Lumpur as head of Warner Music’s Southeast Asia operations, he ventured into the airline business here.

Richard Branson of Virgin Group

In 2007, Fernandes launched Tune Hotels, billed as “five-star rooms at one-star prices.”

Tune Hotel in Kuala Lumpur

Behind the hotels stands the privately held Tune Group, which expanded into Tune Talk, Tune Money, Tune Sports, Fernandes’ own Formula One team, Lotus Racing, and it’s rolling out Southeast Asia’s first international professional basketball league, The Asean Basketball League.

Launch of Tune Talk

Tune Money

Lotus Racing

Asean Basketball Leaque

Fernandes’ philanthropic projects also include a Malaysian branch of Epsom College.

Fernandes describes his vision as “serving the underserved.”

“Generally Asia is about being the biggest, the best, the swankiest, the tallest, the richest. This is where Asian businesses have missed out.

“The cream is in the 65 million other people who don’t have a chance to fly, who don’t have credit cards or insurance. I always saw the masses.”

What a visionary man!

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