AP Interview: AirAsia's Tony Fernandes flies high - with feet

AP Interview: AirAsia's Tony Fernandes flies high - with feet
firmly on ground[ AP Photos KL104-106[ By VIJAY JOSHI= Associated
Press Writer=
KUALA LUMPUR, Malaysia (AP) -

Flying high -- with his feet firmly on the ground

Vijay Joshi
Associated Press/Kuala Lumpur

Tony Fernandes is as no-frills as his airline.

AirAsia's boyish CEO with a ready grin dislikes suits and
comes to work in T-shirt and baseball cap. He drives himself to
office ("I just feel very odd sitting in the back of the car"),
gets on AirAsia flights once a month to serve passengers drinks,
and his speech is generously sprinkled with the catch-all "cool."

It is a style befitting the 41-year-old Malaysian businessman
who became the poster child of Asian entrepreneurship after
buying bankrupt AirAsia less than four years ago for 1 ringgit
(25 U.S. cents) and turning it into the region's most profitable
budget carrier now worth nearly US$1 billion.

The slightly chubby Fernandes even used to help load and
unload baggage from planes until recently when he hurt his back
heaving suitcases on a flight to Indonesia.

"On Indonesia flights they generally bring their house and
their neighbor's house," Fernandes said with a chuckle in an
interview at his cramped, windowless office at Kuala Lumpur
International Airport.

Fernandes' character epitomizes the philosophy of AirAsia, the
region's first no-frills airline that revolutionized air travel
in Asia by breaking the stranglehold of national airlines and
drastically reducing fares.

Much of the airline's success lies in its cost-cutting
strategies: no free food, faster turnarounds at airports to save
on parking fees, flight crews clean the planes, Internet
reservations to eliminate booking offices and new, fuel-efficient
aircraft.

The company's headquarters, an area smaller than a football
field, is reached after a long walk across the tarmac, past
idling jetliners and airport vehicles.

At the far end of the office is the Fernandes' cubbyhole,
which consists of an old L-shaped desk, two chairs for visitors,
a safe, two aircraft models, a notebook computer and a collection
of baseball caps hanging on the wall behind him.

"I have the worst office in the world for a CEO of a billion-
dollar company," said Fernandes, an ethnic Indian.

His dream of running an airline was sparked when as a boy his
father told him he could not join his mother on a flight to
Singapore because they couldn't afford two tickets.

"I didn't want to be a pilot or anything like that," he said.

"One thing that is consistent from 5 years old to now was that
I wanted to own an airline that would make it affordable to fly."
Three decades later, Fernandes owns an airline whose slogan is,
"Now Everybody Can Fly."

Fernandes was educated in the United Kingdom in finance, and
joined Virgin Group after graduating in 1987. He moved to Warner
Music International in London in 1989, and appointed Warner Music
Malaysia's Kuala Lumpur-based chief 1992 at age 28, the youngest
person to hold that post.

A music buff -- he plays the keyboards and the drums --
Fernandes excelled, and Warner CD sales jumped. But Fernandes
says relations with his superiors deteriorated after Time-
Warner's merger with AOL. Office politics and egos began
suffocating him, making him want to leave.

It was during this time that he saw a broadcast on TV about
easyJet, a British budget carrier, and thought such a venture
might work in Asia as well.

He got together three other investors, mortgaged his house,
took out his savings and made a pitch for the badly managed,
money-losing AirAsia, then owned by DRB-Hicom, one of Malaysia's
biggest conglomerates.

Wasn't that a crazy idea, especially with a wife and two
children to support?

"Yeah it was!" Fernandes says. "But I didn't want to sit there
at 55 and say I should have done it. I don't mind failure. I have
never been one to be scared of failure. But I hate having
regrets."

Fernandes says it wasn't easy giving up the perks of the
Warner job -- "fly first class everywhere, stay in the best
hotels, dinner with Madonna, lunch with another artist."
"But I was so, so fed up," he said. "Warner drove me to set up my
own business."

Fernandes signed an agreement on Sept. 8, 2001, to buy AirAsia
and its two planes and assume its 40 million ringgit (US$10.5
million) in debt.

Three days later, New York and Washington were hit by the
terrorist attacks.

"Just as a I got home I saw (on TV) the second tower
collapse," he said, referring to the World Trade Center. "And I
am like, 'Christ, this is the last thing we need!"'

But AirAsia coasted through the crisis. It was profitable from
the first day of operations in January 2002. Today, it has 1,600
employees and a fleet of 21 Boeing 737s, operating over 100
domestic and international daily flights in Malaysia, Thailand,
Indonesia, Philippines, China and Macau.

And in a clear sign of Fernandes' ambitions, AirAsia has
signed an agreement to buy 60 new Airbus A320s over the next five
years for more than US$1.5 billion.

The company does not have a rigid hierarchy, evident in the
way junior workers came into Fernandes' office to talk to him
about operational matters during the interview.

"We trust our people. We give them a job to do and they got to
do it," he said. "We develop talent. We never let talent down. We
will never kill a spirit."

Fernandes says he has no intention of making AirAsia a full-
service, long-haul airline. Instead, he wants to expand
regionally, focusing on China.

He derives pleasure in proving wrong critics who had predicted
AirAsia would go bust.

"If I drop dead tomorrow no one can take away the fact that if
anyone here started a revolution in Asia, it was AirAsia. No one
can take that away from us (even if) we go bankrupt tomorrow," he
said.

"I think that's cool."

GetAP 1.00 -- SEP 11, 2005 07:38:30