Tony Fernandes
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Anthony Francis Fernandes (born 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 to Malaysians with the tagline "Everyone can fly".
He attained to prominence by turning AirAsia, a fledging government-linked commercial airline, into a highly successful 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 neighboring Thailand, Indonesia, and Singapore. As a result, these nations have granted landing rights to AirAsia and other discount carriers.
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[edit] Pre-entrepreneurship days
Born in Kuala Lumpur, Malaysia, Fernandes, who is part Goan and part Malaccan-Portuguese, is the son of the late Dr. Stephen Edward Fernandes, and Ena Dorothy Fernandes. When he was young, he used to follow his mother, a businesswoman, to Tupperware dealer parties and conventions.
Educated at Epsom College 1977 -83 and then graduating from the London School of Economics in 1987, he worked very briefly with Virgin Atlantic as an auditor, subsequently becoming the financial controller for Richard Branson's Virgin Records in London from 1987 to 1989.
Upon his return to Malaysia, he became, at 27, the youngest-ever managing director of Warner Music (Malaysia) Sdn Bhd. Though a chartered accountant, Fernandes is an amateur guitarist and there lies his musical inclination. He was responsible for revolutionising ethnic music, nasyid and dangdut, bringing them into the mainstream of contemporary Malaysian music.
He subsequently became the South East Asian regional vice-president for Warner Music Group from 1992-2001. When Time Warner Inc announced its merger with America Online Inc., Fernandes left to pursue his dream of starting a budget no-frills airline. However, his application for a license from the Malaysian government was rejected.
[edit] Launching AirAsia
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 big-time. 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 aging Boeing jets 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 September 11, 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, Air Asia had broken even and cleared all its debts. Its initial public offering (IPO) in November 2004 was oversubscribed by 130 per cent.
Fernandes says his timing was in fact perfect: Since September 11, 2001, aircraft leasing costs were down 40%. Also, airline layoffs mean experienced staff were readily available. He believed Malaysian travelers 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 modeled after Southwest Airlines in the United States). Fernandes reckons that about 50 per cent of the travelers on Asia’s budget airlines are first-time flyers. Before AirAsia, he estimates that only six per cent of Malaysians had ever traveled in a plane.
[edit] Achievements and awards
Fernandes' biggest achievement has been to turn AirAsia into an international carrier. Before the creation of Air Asia, 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 neighboring Thailand, Indonesia, and Singapore. As a result, those nations have granted landing rights to Air Asia and other discount carriers. Fernandes has indeed set in motion the advent of budget carriers in the region. Now, South east Asia hosts a number of low-price carriers such as:
- Singapore’s Tiger Airways (owned by Singapore Airlines);
- Singapore’s Valuair, and Jetstar Asia (partly owned by Qantas Airways) (both airlines merged in 2005);
- Thailand's Nok Air; and
- Indonesia's Lion Air.
In 2004, AirAsia formed successful joint ventures in Thailand and Indonesia where AirAsia holds 49% stake in both companies. Thai AirAsia, a joint venture with Shin Corporation, Thailand’s largest telecommunication conglomerate, took to the skies in Feb 2004 and has to date carried over 1 million guest in its first year of operations. PT AWAIR, re-launched as a low fare airline on Dec 8th 2004 presently serves 5 domestic destinations in Indonesia.
Fernandes has so far received several awards for his outstanding achievements:
- International Herald Tribune Award for the "Visionaries & Leadership Series", for his outstanding work in AirAsia;
- "Malaysian CEO of the Year 2003" in December 2003 — a highly acclaimed recognition, so far awarded to only nine other recipients in the country, by American Express and Business Times. The award was an initiative to recognize entrepreneurial and managerial expertise and performance among leaders of Malaysian corporations.
- Named the joint winner of the CEO of the Year 2003 award by American Express Corporate Services and Business Times .
- "Emerging Entrepreneur of the Year" in the Ernst & Young "Entrepreneur of the Year Awards" in 2004;
- Made the list of Business Week’s "25 Stars of Asia" in 2005.
Fernandes has also been honoured by the Malaysian government with title ' Dato' ' (not 'Datuk').
[edit] The Branson comparison
Fernandes earned him a Branson-like reputation as a maverick here in Asia. Like the flamboyant Branson, he has a knack for witty turns of phrase and getting the media’s attention.
Fernandes also isn’t afraid to deviate from established business practices. “Many Malaysian companies are top heavy, inflexible and don’t listen to employees,” he says, adding that AirAsia strives to avoid all of these pitfalls.
Six years after the start of the Asian financial crisis in 1997, the region’s economies are back on track. Missing in many countries, though, are innovative, ground-up business ventures that create jobs, competition and inspiration for other would-be visionaries. Equally absent in many cases are government efforts to draw them forward.
AirAsia is proof enough of the good that can come from governments letting business people pursue their ambitions. It’s also proof that while Asia has come a long way since the crisis, it still has a way to go.
Fernandes says he won't imitate his mentor Branson by branching out into many businesses. "Unlike Sir Richard, I am totally focused on just one thing -- Air Asia," he says.
[edit] References
- New Sunday Times, Malaysia, dated July 10, 2005
