Tony Fernandes CEO Blog

I couldn't not write about Barack Obama. He epitomizes so much of what I believe in.

Young, not tainted and full of ideas. But what excites me most about him, he's multicultural and is willing to talk to anybody and to listen and solve.

Ever since I read about Alexander the Great, I have been drawn to one world one race. As he conquered almost half the world, Alexander saw how race and religion polarized people and hence, in his short life, he encouraged mixed marriages to try and create one race in his kingdom.

Barack Obama has Kenyan parentage; an American mother, he had an Indonesian stepfather, he lived in Indonesia and has Malaysian relatives. That's what I love.

But apart from economics etc, he is willing to talk and communicate and understand other views. The world needs him. The only way to solve the Palestinian problem is to talk to them, the only way to understand Cuba is to listen and the only way to understand Iran is to talk to them and he appears willing to do so.

Yes we can. For 6 years I have been saying believe the unbelievable, dare to dream and never take no for an answer. AirAsia and so many of my staff have, and I suppose we all said yes we can.

For whatever her sins, America has once again led the world. It has shown that it will choose the best man for the job whatever the colour. Meritocracy rules. That is why whatever happens they always are able to innovate be it Apple or Google or eBay or Hollywood. Because they allow free speech which allows free minds which allows innovation and meritocracy.

We are blessed in Malaysia with a melting pot of races. It should be our brand. As the Swiss are known for their precision, we should be known for the only country that has such great ethnic groups.

Barack Obama has given hope to all in the world that anything is possible if you put your mind to it.

Believe the unbelievable
Dare to dream
Never take no for an answer

Yes we can.

Make your dreams come true and believe. The power of belief is enormous.

Ever since the pound was forced out of the ERM (European Exchange Rate Mechanism) in the late 80's, I have always had a strong distaste for financial traders. I saw it once again in 1997 when all of us were affected but till this day I cannot understand how the rupiah went from 2500 per US dollar to at one point 20000.

The world has been living with many bubbles over the last 3 years and for anyone who chose to listen I kept telling people that it's all going to come crashing down soon and we will all hurt but no one seemed to listen or really bother. We were all into believing that the growth will go on forever.

Thank god in Malaysia, Bank Negara has kept a tight rein and hence our financial system is strong. The issue I have been having is profits must come from creating real value. Not paper profits.

I saw with my very own eyes how oil went from 30 US dollars to 150 US dollars in just 2 years. How on earth can oil be worth so much more i.e. 500 percent in such a short period? The answer is that financial speculators saw it as easy profit. The actual volume traded was so far in excess of the actual oil consumed. So it was all just in paper. Hedging is supposed to give certainty to oil producers and oil consumers. But a whole new class came in who never even bought a drop of oil. Banks like Goldman Sachs made calls on oil at 200 US dollars. Did they themselves buy oil for that long? Oil went up for any reason. The worse being a fire in one small refinery in the middle of nowhere and the oil shot up to 4 US dollars.

The shame is many decent companies have been destroyed by the greed of these financial speculators who made nothing while many entrepreneurs who had great ideas were destroyed by these guys who traded papers. And those who bailed out are the Bank of America and the Treasury Secretary who happens to be the ex-CEO of Goldman Sachs's Hank Paulson.

I am a great believer in the free market but in this case the free market failed and for years to come we will all pay for it. Speculation is evil and I hope in future there is a better regulation of it.

Here are some suggestions:

1. Build real value - don't get involved in a business that is trading on paper. If I could, I would stop all speculation. If you want to hedge oil that's fine but it must be backed by the purchase of the physical product. This is the same for currency and interest rates.

2. Do not allow too much leverage. Make sure that the cash flow is robust to deal with leverage.

3. Ban on short selling. Either you have the stock to sell and if not you can't sell.

The trouble is that too much money went into trading and not on building real value and now we are all are going to pay.

However, I feel we are in quite a good position in Malaysia if we use this to strengthen our Asean ties and build closer links to Asean. It's a 600 million market.

So, the lesson here is that there is no quick answer to wealth. The best bets are still building a business that builds real value and is a service to the people.

I think Malaysia will do okay from this. We have been insulated for a while from the world economy but I hope the government grants this opportunity to further enhance productivity.

The past few weeks displayed to me the power of a brand. Many have asked for tips. There are tips on each of my posts. Some subtle whilst others are direct. But this post is direct one. As a businessman or businesswoman the lesson here is not to neglect your brand and always invest in your brand.

The brand.

The value of a brand is hard to quantify and investment in a brand is always hard to justify but the last few weeks showed me how important it is and how our investment over the last 6 years has paid off handsomely.

For the past few weeks, I have attended the Forbes Global CEO Conference, JATA World Congress Tourism Congress and the World Low Cost Airlines Congress 2008 as keynote speaker. What struck me was that in 6 years from all parts of the globe AirAsia has become synonymous with low cost travel.

What does that mean? It means that when someone thinks of low cost travel in Asia they think AirAsia. When someone wants to partner with a low cost airline they think AirAsia. When we need to make new contacts, look for finances and build new relationships, it's much easier as everyone knows AirAsia. So the extra revenue, time and cost savings can all arise by promoting your brand.

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The A380 experience. I haven't flown SIA for a long time certainly not on long haul as I used to get a discount from MAS (but please note used to hahaha). I have been flying the Gulf Airlines as they are cheaper but decided to treat myself and fly on SQ A380 in their suites.

The picture tells a million words even though I'm pretty lousy photographer. But it is a wonderful sight to behold and an amazing piece of engineering.

But what amazed me before I talk about the title was how happy the SIA crew were to see me. They all said that AirAsia had made a big difference to their lives both from the fact they could fly more and the fact that our company showed that you don't need to put people in boxes. That AirAsia had allowed cabin crew to be pilots, boys who carried bags to be pilots, call center staff to be Station Managers. It was great to hear all of this. But the best part of the conversation was that we gave from our heart and that we put our employees first.

It was strange hearing it from a Singaporean staff as sometimes I even feel my own staff don't realize but it was a great feeling nevertheless. It was a wonderful feeling that a Malaysian company of only 6 years can impact an airline that has clearly been the world's best. But that's my thought for the day.

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Hi Everyone,

Firstly, thank you for giving me such a warm welcome to the world of blogging. I must say I really enjoyed reading the 150 comments and emails.

I have so much to say but I will start by trying to cover some of the comments raised by all of you.

Please call me Tony, so that's what I would like to be called. This is me, not a ghostwriter so pardon the typos and poor grammar. Just returned form London and went to watch basketball (my next project an Asean Basketball League - will tell you all about it soon) and today went to watch the Women's World Cup of Table Tennis as AirAsia was a sponsor.

Back to your comments. I will use this blog to share my experiences, give my views and share some of my inner thoughts on life and business.

I hope to meet many of you as you've requested and I'm always around the airport or planes so just come and say hi. You may also see me at a Tune Hotel. Someone asked did I play Ping Pong, yes I did. Love the game. My main sports were Rugby Cricket and Hockey. Now I play the odd game of football and Squash.

Many of you have sent suggestions on AirAsia and complaints. I've set up an email for this and it's tony@tonyfernandesblog.com.

I would like to suggest that you use this email to send your suggestions or ideas or complaints to me. Would be easier for me to reply and I will reply. You can also send to the AirAsia Blog or Guest Support at AirAsia.

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Boy I have so much to say and I have to say this is liberating. Hopefully everyone who reads this will look at it in the right spirit...positive spirit. Something all of us as Malaysians need a massive dose of.

So Happy Merdeka to everyone! 51 years is not bad. Merdeka is not something to be taken lightly. Imagine if we were still ruled by someone else. We still have a long way to go before the fruits of independence are enjoyed by all. One of the key issues we face today is to stop great talent from leaving our wonderful country. A loss of even one talented Malaysian represents a drain on our great country.

In this era of globalization, I hope that we can put our differences behind us and work as a united Malaysia to combat the many challenges thrown at us.

Let's look confidently together towards the future and strengthen our bonds as Malaysians to take our nation to greater heights. Look at AirAsia, a company that pays homage to the diversity of Malaysia and which promotes talent regardless of race, creed, gender or social status and in the process built a truly global brand in 6 years.

AirAsia is a Malaysian company which has delivered tremendous benefits to every Malaysian. Imagine if there were 51 more such companies. That would be something to REALLY look forward to.

I love the Internet. As you can see, the online space or rather this blog has managed to solve my frustration of not being able to talk to everyone as often as I’d like.

In between meetings, trips and other commitments, it’s hard to stop and chat with those around me. Now with this blog, I not only have a space to say what I think and feel but also hear what you guys have to say as well. Blogging has always intrigued me. I have read quite a few blogs lately and find some of them pretty amusing. I also found myself the subject of many comments which was very interesting to read.

As I end this post and officially enter the blogosphere, I would like to say thanks for stopping by. Look forward to writing more stuff in here.

Tony