Battle-hardened Fernandes

By Sharen Kaur
Published in NST on Dec 3, 2014

EVERYONE CAN FLY: AirAsia boss proud to have changed lives, bring joy to the people

USING your own money to buy an airline business may seem unrealistic to many, but Tan Sri Tony Fernandes did it because he believed in the company’s prospects.

In 2001, he mortgaged his house and used the money to take over AirAsia — a DRB HICOM Bhd unit that was then RM40 million in debt.

Fernandes paid RM1 for the carrier’s assets, including its two Boeing 737-300 aircraft, and took on all of its liabilities.

A year after taking over the business, he managed to transform AirAsia into a significant player while clearing all of its debts.

AirAsia became a public-listed company in 2004 with its initial public offering oversubscribed by 130 per cent.

Today, the low-cost carrier has 180 planes in its fleet with an extensive network covering more than 20 countries.

As of February this year, Forbes Asia valued Fernandes’ net worth at US$650 million (RM2.22 billion), ranking him 28th on the list of Malaysia’s richest.

“AirAsia has been in many public battles. It’s hard... it’s hard to be AirAsia as nothing comes easy for us. But when you want to be the best, when you have to challenge Singapore Airlines (SIA) and other global brands, you need partners who want to be the best as well.

“I am trying to make Malaysia the best, and that means pushing some of my partners to be the best as well. It is seen negatively sometimes, but I don’t apologise for that because I think if we want Malaysia to be the best country, then we got to go out there and push everyone to be the best and not accept compromises.

“We owe it to the people. I owe it to my staff and shareholders. But it is tough because, as a private company, we don’t get access sometimes and, in many ways, a lot of our partners are companies that have large government holdings.

“But as a Malaysian, I am very proud of what my staff have done and it is my job to go out there and push and continue to push,” he told Business Times.

The Kuala Lumpur-born Fernandes, 50, received his early education at The Alice Smith School, here, and then Epsom College, and finally at the London School of Economics (LSE) in the United Kingdom.

From a young age, he accompanied his mother and businesswoman, Ena Dorothy Fernandes, to Tupperware dealer parties and conventions.

After graduating from LSE, he worked briefly for Richard Branson’s Virgin Atlantic as an auditor, subsequently becoming the financial controller for Virgin Records from 1987 to 1989.

Upon returning to Malaysia, he became the youngest managing director of Warner Music (Malaysia) Sdn Bhd, and then its Southeast Asia regional vice-president for nine years up to 2001.

Upon leaving Warner Music, Fernandes decided to pursue his dream to start an aviation business but his application for a licence was rejected by the government.

It was through Datuk Pahamin A. Rejab, the former secretary-general of the Domestic Trade and Consumer Affairs Ministry, that Fernandes met the then-prime minister Tun Dr Mahathir Mohamad, who suggested that he buy AirAsia.

“We have achieved a lot in the last 13 years. The great thing about these 13 years is that I have been able to chart more or less our own destiny. In the music industry, I was really working for someone else. It’s great being an entrepreneur. It is great being able to do what you want with your staff and build the business the way people want.

“Whatever happens with AirAsia or wherever we go from here, what has been amazing is that we have changed lives forever. Every time I get a little bit demoralised, I just have to walk into the former LCCT (low-cost carrier terminal) or Kuala Lumpur International Airport 2 and look at the people who never thought they would one day get to fly.

“Seeing an old man going back to India for the first time to see his ancestors, or someone going to Hanoi for the first time ... it’s an amazing feeling for me.

“Music is my passion but you can bring joy to people in different ways. At AirAsia, what we have been able to do is create jobs both within the airline and surrounding industries, and make people happy. Today, within the AirAsia group, we employ around 15,000 people.

“My business philosophy, in terms of management, is really transparency and staying focused. My job is to turn raw diamonds into diamonds. The success of AirAsia is because we are very people-oriented and market driven. I think everyone knows that these are my key attributes. We pick a product that people want,” Fernandes said.

The entrepreneur was instrumental in proposing the idea of open skies agreements with Thailand, Indonesia and Singapore.

As a result, these nations have granted landing rights to AirAsia.

“We have created a global brand, which I think I am most proud about. It is not easy to build a global brand from a small country like Malaysia and I think the people who work for AirAsia are very proud of that fact.

“In the Malaysian context, what I am extremely proud about is that we are truly a Malaysian company. It is integrated... it’s meritocracy. It really shows the best of Malaysia. I think we are a great example of what Malaysia can be when all of us work together,” Fernandes said.