Tony Fernandes describes AirAsia Bhd., the budget carrier he established 14 years ago, as an Asean company.
Fernandes, the 51-year-old chief executive of AirAsia who is listed by Forbes magazine as the 33rd richest man in Malaysia with a net worth of $530 million in 2015, met his success in Asean, the regional bloc of 10 countries which now opens their national borders for free trade.
“This is the Asean market and we have created an Asean company,” Fernandes says at the Asia-Pacific Economic Cooperation CEO Summit in Manila.
Asean stands for the Association of Southeast Asian Nations, which groups Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Fernandes, who completed a degree in accounting at the London School of Economics in 1987, had worked for Virgin Records and Warner Music Group (Malaysia), before venturing into the aviation industry.
He bought AirAsia, a failing commercial airline and assumed 40 million ringgit of debt in December 2001. The airline had two old aircraft when Fernandes took charge.
Fernandes promoted AirAsia as Asia’s leading low-fare, no-frills airline, flying to destinations across the region.
Within a year after his takeover, AirAsia broke even and cleared all its debts. It conducted an initial public offering in November 2004, which was oversubscribed by 130 percent.
Over the past decade, AirAsia has revolutionized the aviation industry in Asean. Now, the budget carrier has more than 200 planes with operations spanning Malaysia, Thailand, Indonesia, India, the Philippines, China and Japan.
Fernandes launched AirAsia asean based in Jakarta in August 2012. AirAsia Group now flies more than 150 routes to 89 destinations, 57 of which are in Asean and the rest in Japan, China, Hong Kong, Macau, Taiwan, South Korea, India, Sri Lanka, Nepal and Australia. AirAsia Group employs 10,000 people.
In 2007, Fernandes also established hotel chain Tune Group, which is also based on the no-frills concept. It has quickly spread across Asean.
Fernandes acknowledges that most AirAsia innovations, both products and processes, were suggested by his employees.
He recalls that he initially resisted the ground crew’s suggestions to buy the machine that brings the luggage up into and down out of the plane, but as he himself did some of the heavy work, he became convinced that the expensive equipment was a necessity.
This active listening is a strategy that has worked for AirAsia, he says.
To match the strategy, Fernandes said he also dresses more casually to get AirAsia staff to talk to him.
Having his ear on the ground allows him to improve operations, he says. And these are just some of the ways he elicits points for improvement from his employees.
Fernandes says AirAsia’s success can also be attributed to the Asean market. He says more than having great workers, Asean has a potential market of 600 million people, slightly more than Europe’s combined population.
He says AirAsia as a budget airline was conceptualized to cater to this vast market. “We see enormous potential in Philippines, Vietnam, Indonesia going forward, creating the Asean market,” he says.
Fernandes says Asean’s biggest strength is its people—as a market and as human resource for companies. “If we put people first, everyone wins,” he says.