Malaysia Insider | Insider Secrets To Cheap Flight, AirAsia Airlines

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Insider Secrets To Cheap Flight, AirAsia Airlines

Tony Fernandez has brought new height to the word entrepreneur in Malaysia. He rose to prominence by turning AirAsia, a failing government-linked commercial airline, into a highly successful budget airline public-listed company. Fernandes was also instrumental in lobbying the then-Malaysian Prime Minister, Tun Dr. Mahathir Mohamad in mid-2003, to propose the idea of open skies agreements with neighbouring Thailand, Indonesia, and Singapore. As a result, these nations have granted landing rights to AirAsia and other discount carriers.

Unbelievable RM9.99 for a flight?

Datuk Seri Anthony Francis Fernandes (born 30 April 1964; also known as Tony Fernandes) is a Malaysian entrepreneur and the founder of Tune Air Sdn. Bhd., who introduced the first budget no-frills airline, AirAsia, to Malaysians with the tagline “Now everyone can fly”.

It was through Datuk Pahamin A. Rejab, the former secretary-general of the Malaysian Domestic Trade and Consumer Affairs Ministry that Fernandes got to meet up with the then Prime Minister, Tun Dr. Mahathir Mohamad in October 2001. The wily Malaysian prime minister had a cropper in his hand, which he had been trying to unload for nearly two years.

AirAsia, the heavily-indebted subsidiary of the Malaysian government-owned conglomerate, DRB-Hicom, was losing money speedily. Instead of starting from scratch, Mahathir advised Fernandes to buy an existing airline instead. Fernandes mortgaged his home and sank his savings to acquire the company, comprising two ageing Boeing 737-300 jets (9M-AAA and 9M-AAB) and USD$11 million (RM40 million) worth of debts, for 26 US cents (one ringgit), and transformed it into an industry player.

Coming just after the 11 September 2001, undoubtedly the worst day in the history of commercial aviation when nobody wanted to fly, everyone thought that Fernandes had gone “crazy”, predicting that the company would fail miserably. Yet, just one year after his takeover, AirAsia had broken even and cleared all its debts. Its initial public offering (IPO) in November 2004 was oversubscribed by 130 per cent.

Tony likes girls very much

Fernandes says his timing was in fact perfect: Since 11 September 2001, aircraft leasing costs were down 40%. Also, airline lay-offs mean experienced staff were readily available. He believed Malaysian travellers would embrace a cut-rate air service that will save them time and money, especially in a tight economy. That was why he copied one of the world’s most successful no-frills carriers, Ryanair out of Ireland (which in turn is modelled after Southwest Airlines in the United States). Fernandes thinks that about 50 per cent of the travellers on Asia’s budget airlines are first-time flyers. Before AirAsia, he estimates that only six per cent of Malaysians had ever travelled in a plane.

Fernandes’ biggest achievement has been to turn the AirAsia airline into an international carrier. Before the creation of AirAsia, countries in the region did not have open-skies agreements. In mid-2003, Fernandes’ lobbying pushed Dr Mahathir to raise the idea with the leaders of neighbouring Thailand, Indonesia, and Singapore. As a result, those nations have granted landing rights to AirAsia and other discount carriers. Fernandes has indeed set in motion the advent of budget carriers in the region.

Shara and Ilyana of AirAsia female pilots. AirAsia rocks!