Tony Fernandes CEO Blog

I'm sitting in my car park listening to a CD by the two of the greatest musicians in our time - Carol King and James Taylor. Don't want to leave such a great CD.

"So Far Away" is one of the greatest songs ever written. Funny how songs can accurately reflect your mood because this is how I feel right now about settling disputes with MAS.

We just want to fly where we want but they spend all their time trying to stop us. Kinda sad that such a great company is so focused on stopping a fellow Malaysian company from growing.

Actually I have no dispute with Malaysia we just want to fly.
Is the sky only for MAS?

Is the high street only for CIMB? No, it’s not.

Is the mobile phone service only for Celcom? No it’s not.

Saudi Arabian government has just given Malaysia 28 flights a week to Jeddah but because MAS objects to us flying there, lower income folks who could get a low fare still can't go. We will survive because we have such innovative people in the company.

But I feel for people who could go to Mecca (via Jeddah) more often with our low fares. How different it is in Indonesia, where both Gardua and low-cost carrier Lion Air fly to Jeddah.

As a Malaysian I want MAS to be the best in the class just like I want the same for CIMB, Petronas, and Celcom. And when you see SIA and Cathay and Garuda doing so well it is a shame that MAS’ only ideas are to stop AirAsia growing.

I had the privilege of watching the semi-finals between our world squash champion Nicol David and Alison Waters last Saturday. It is always a joy to watch Nicol in action; to see her lightning quick moves and superior court-craft.

Nicol was trailing for most of the first set when she caught up at 10-10 and was awarded a let. The set went on evenly to 11-11 and then 12-12. She finally overcame Waters with a 14-12 victory. Nicol fell behind again in the second set, trailing 7-10 but caught up to make it 10-all before winning 12-10. Waters took the third set before Nicol wrapped up the game, 11-7 in the fourth. Excellent play by two talented athletes that kept us on the edge for over an hour!

Nicol covers her bases well. You won’t recognize any signature Nicol moves because she’s a real all-rounder and that makes her tough to beat. But above all I think her biggest strength is her steely mental endurance.

When Nicol is down she does not quiver. She does not sulk or throw tantrums as many racket-sports athletes are wont to do. She is disciplined and single-minded in her goal. And that is to win. This is the hallmark of a true champion.
Another thing about Nicol is that she is that good because she competes with the best. Waters was a formidable opponent and no pushover. Even Nicol admitted that she had to “dig deep” into her reserves to beat Waters. That probably would've made her victory that much sweeter.

We can all learn from winners like Nicol. Never say die even when you’re down and when the prize doesn’t seem within reach. Like running a marathon. Often you just need to suck it in, turn the corner and you’re home free.

I see plenty of talent and potential around me but I am often disappointed by their lack of fighting spirit and self-belief. Sometimes it’s baffling. And yet, Malaysia has fighters like Nicol who compete at international tournaments – no breaks, no concessions.

If only all Malaysians companies were more like Nicol David. We would have many more world champs.

I’ve always been a strong believer in market forces. When they are not manipulated to serve a few clever bankers they have that canny ability to set the right price.

Subsidies, in my view are a form of market manipulation. You could say it is benevolent market manipulation because there is that noble aim to make life easier for those living with less. It also gives the warm cosy feeling when you know there is the state there to watch your back when the price of oil goes a little berserk.

All well and good, but subsidies are a rather crude tool for providing citizen welfare which has become a bane to economic growth and I fully support proposal to scrap them

As popular with voters as they are, a startling 70 per cent of subsidies are enjoyed by the rich who don’t actually need them. I find this unreal and frankly a little embarrassing -- it’s sort of like a young man beginning to earn his own keep and yet refusing to move out of his folks’ place.

Subsidised petrol for one has become a real menace to our economic progress. Artificially cheap petrol keeps people happy for as long as the government can afford it but it threatens to break the bank account when the price of oil catapults to insane levels as it is wont to do in recent times. And so here we are today realizing that it’s time to grow up and live in the real world where we pay real prices.

It will be inconvenient at first because of the adjustments we will have to make. But in the long term companies will be forced to innovate, improvise and think creatively to bring down costs. Surely that can’t be a bad thing.

I do hope that the savings from subsidy cuts will be spent wisely. We have invested plenty on multi-lane highways but not enough in education, universities and meaningful R&D so it makes sense to channel more money there.

My final, but no less important point on the subject is let us not just look at the obvious RM103 billion we can save by ending direct subsidies. There are the less obvious indirect subsidies that companies like Malaysia Airlines receive through state support and preferential treatment.

MAS still gets its turf well protected and of course this distorts the market prices of air tickets. When government departments book tickets with MAS, they pay full fares when they could be getting discounts if they booked through travel agents. All airlines operate from the starting point of full fares but give discounts according to the volume of ticket bookings. When government departments are forced to pay full fares each time it begins to look like a subsidy to me.

Invariably you will find that where AirAsia is not allowed to fly, consumers have to pay higher fares. Just look at what it costs to fly to Melbourne compared to Sydney. Because of restrictions, a return ticket to Sydney from Kuala Lumpur at full fares today, is over 70% higher than what it would cost to fly to Melbourne. This is really an indirect tax on consumers which we’ve long lifted from other strategic industries like telecommunications. Celcom competes and fight with the likes of Maxis and DiGi and I think Celcom CEO, Datuk Seri Shazalli Ramly is doing a great job standing up against his very formidable challengers. Over time Celcom will only improve.

So I see no point if we embark on a half-hearted reform by only dealing with one dimension of market subsidies. There needs to be on the whole, a more liberal, lively and fairly regulated market place. Only then will we see a real transformation of Malaysia’s economy.

Over the last seven months much has been said about me Din and Naza and our venture into Formula One.

“Why?” and “Are you afraid of failure?” were the most common questions.

I’ve never written about this. But an article in Malaysian Insider has prompted me to. There have been many jokes about Lotus which I personally find quite funny. Kenny Sia did a hilarious one on why we couldn’t win which I use in many of my presentations.

But it is his second article on Lotus that actually seriously resonated with us and vindicated our thoughts. The second one was still funny but really was quite nasty. It made me feel that the reason for going into Formula One was right. For too long we have been a nation of losers and we always whack those who try. We ridicule them instead of celebrating ambition, innovation and guts.

It has been a great few weeks for Malaysian sport; Nicol David at the KL Squash Open and Lee Chong Wei at the All England Men’s Singles – two worthy champions. And over the weekend, who would have thought that a Malaysian car could come three places from getting a point in the world championship after only two races?

And that’s why we did this.

As a nation we need to believe that we can do anything. That we can be the best. Our kids need to stop worshiping the Manchester Uniteds , Ferraris , and Steve Jobses of other lands. Stop thinking that heroes only come from abroad. We must start believing that we, Malaysians, can. That we can compete and be the best in the world.

Look at AirAsia. Everyone laughed at us. Look at us now. The world’s best low cost airline; accomplished in just eight years. Who is laughing now?

So to all the cynics give Malaysia and Malaysians a chance. Embrace the brave, the visionaries, the dreamers and the innovators. Embrace positive energy.

It’s much better than just writing negative stories. Go out and make a difference. Don’t just hammer those with a positive attitude. Change today and go out and make a difference.

Anita Gabriel, the Star reporter sent me this recently and just thought it would be nice to put up a new post. This interview happened a while back in 2007 with my good friend, Sir Richard Branson but the key message is here to stay today and we are realising everything in every way. Will we do a Virgin Atlantic? We're on our way.

Video links for the interview with Branson as follows:-

Check back next week as I unveil the winners for the challenge of naming the route. Being home is definitely exciting.

Am reflecting on Merdeka day. It has been a busy few weeks with Krispy Kremes introduction on our planes and announcements on Abu Dhabi and Chengdu. We are gearing up to pave the way ahead for AirAsia as a whole. Was just reading the comments on the post for the women pilots of AirAsia and it it dawned on me that not enough has been said about the other women of AirAsia. Just had to take time to say a few words on how we are dispelling the myth that in Asia, only males can dominate the business world and profession of importance and AirAsia is going to be that catalyst of paradigm shifts.

At AirAsia, this does not only mean women in our flight operations have a window to excel but it also extends to our women engineers as well. We have wonderful women engineers who also stand tall among their male counterparts and challenge the notion that certain jobs are stereotyped to certain genders alone. The women engineers do not take any shortcuts nor given any slack when compared to the men and they have performed admirably. Where required, they have been out in the field, grunting their way to excellence in a normally dominant male field and they have shone as well. This is proves that women too can achieve success regardless the playing field as long as they have been given the opportunity. They are living testament that defies the myth that only men can succeed in any career regardless of the physical demands or perceptions of the public in general.

These women who have chosen to be engineers but more importantly to defy what constitutes what a female can do are great examples of stories worth telling.

Engineering Apprentice, Izyan Syazwani Mahfuz.

We call her Syaz. And at just 21, she's setting a prime example in aircraft engineering. She left Petronas to dabble in aircraft engineering based purely on her love for aviation and in her own words, "Most importantly I want to enjoy every work I do, learn sincerely, and fulfill my dream ie to follow my father's footstep and become an engineer." This Ampang lass finds the most challenging aspect of her job is in working with guys under the hot sun and for crazy hours. And in this insane smile she actually told me, "But having fantastic and helpful colleagues, they don't really matter anymore.". Izyan is really into live performances and scuba diving and has shared her dreams with us for three years already.

Izyan lasted just one year doing her foundation with Universiti Teknologi Petronas before finding her calling and her way into AirAsia. She has proven to be simply a fantastic new recruit and for her to brave a lucrative alternative with another corporate giant and work on equal terms with men, Syaz is blazing her own engineering trail.

Engineer, Noorasykin Abd Aziz

Fourth among eight siblings, Noorasykin graduated from electronic engineering and just looking at her soar to her current heights is simply awesome. She's a volleyball enthusiast and definitely another great women engineering braving the demanding hours and physical exertions while all at the same time contending with men. And she has simply given us no excuse to doubt women being as capable or even more capable in a male dominated field. The reason she took up the offer? It was simply challenging.

The women of our senior management also stand out with our head of commercial, Kathleen Tan who is simply a woman general personified. Heading our commercial team, she has continued to play a prominent role in carrying the AirAsia flag high and continues to chart our commercial growth to stand among the world's best. Another woman who is a force to be reckoned with in our ranks is Aireen Omar who has been simply sensational in heading our corporate finance and garnering international awards in Islamic financing. Rafizah who's recently joined our ranks to head our ancillary income is also an excellent addition to the AirAsia family and a woman giant in her own right. These woman embody who and what AirAsia stands for which is a champion of equal rights and a platform of woman power and equality at it's best.

Why are we what we are? One of the reasons is that we practice meritocracy at every level where sometimes many Malaysian companies ignore what woman can contribute to the growth and sustainability of a company. We recognise this and were the first to allow the women of our cabin crew to retire at the same age as men. MAS, SIA and other legacy carriers do not share the same vision as us. We have been the first to have women pilots and we are going to chart new regions based on this belief. Not only that women power should prevail, but simply, that we are going places because we believe in making a difference with the best in any given field. Signing off by saying that women power absolutely rocks.

Merdeka is a great day for all of us and our nation. We are a proud 52 years old and I hope that Merdeka will also mean Merdeka to women, and to private businesses who compete with government linked multinationals (GLCs). It is my hope that Merdeka is to all irrespective of race, creed, colour, age or sex. In essence, more independence to all. Happy Merdeka!

On a flight back from London recently, I popped into the flight deck to say hello to the pilots. To my pleasant surprise I saw one of our up-and-coming female first officers, Shara sitting behind the controls. It's moments like these when I can't help but feel a bit like a sentimental fool. Shara is the first woman in Asean to fly the A340 and I'm really proud of her. Her achievement is a sign of our success at creating an environment of equal opportunity for women at AirAsia.

Hiring without prejudice against race and sex is in AirAsia's DNA. And I'm not just paying lip service to that ideal. Take a look at our top managers. Our Head of Commercial, General Counsel, Head of Corporate Finance, Head of Ancillary income and Head of Food&Beverage are all women.

Our gender neutral policy extends to roles out in the field too. Not many people realise that we were the first airline to extend the retirement age of female cabin crew to be on par with their male colleagues. I haven't seen other airlines in Southeast Asia changing their retirement policies. We may be sexy but we're definitely not sexist.

We were the first in Malaysia and I believe, Asia to recruit female pilots. To a lot of people this was quite radical. it is actually pretty darn cool too, if I do say so myself. It was great publicity for us and it boosted staff morale to know that they were working for a progressive company. But I assure you it was no publicity stunt. None of our girls would have earned their wings had they not passed the rigorous selection process. Safety knows no double standards.

We think it simply makes sense to practice meritocracy at all levels and I think it's short-sighted of Malaysian companies to not give more consideration to the very capable female work force.

Take flying an aircraft for example. I wonder why won't more airlines cast their hiring net wide to include women. I suspect this is just tradition that nobody feels compelled to challenge. In a way that line has been good for AirAsia as it means more in the talent pool for us to mine. When the industry was suffering from a pilot shortage we filled positions quicker by considering female applicants. You'd be surprised by the number of girls who dream of flying planes.

Piloting has absolutely nothing to do with physical strength, the only obvious advantage men have over women. Technical proficiency and aviation skills can be trained in anyone with the aptitude and this isn't gender defined. In fact, the bravado and machismo often associated with men is exactly the kind of trait that acts against being a good pilot. The qualities desired in a pilot are being able stay calm under pressure, being able to multi-task, confidence, capable of making solid decisions and trusting one's instincts.

Not quite the qualities found in a woman you think? Let me tell you about two women that will quell that belief.

First Officer, Ilyana Nazli Shah

Ilyana was convinced she would become a pilot after an invitation to sit in the cockpit during a flight to Langkawi for a family retreat. She was 16 when she took that AirAsia flight.

She enrolled in and qualified for the AirAsia Cadet Programme immediately after her SPM. A self- professed adrenaline junkie, Ilyana is one of our bright young sparks. At 23, she's been flying with us for almost four years, logged 2800 jet hours and become our first female pilot to fly the A330.

Being a pilot has instilled in her a sense of confidence, self-belief and responsibility. I feel very proud that AirAsia has given talented and determined young women like her such opportunities. Ilyana hopes that she and her female colleagues will eventually rise to management level and find a career as instructors in the academy. At AirAsia that wouldn't be impossible.

Senior First Officer, Shara Azlln Jalil

Remember that big question you're always asked as a kid? What do you want to be when you grow up? Shara's answer was a little unexpected of a girl. She wanted to be a pilot. Believing that was pretty much impossible in Malaysia at the time teachers and classmates would just smile politely each time she talked about her lofty dream.

For a while they were right. But that was before there was AirAsia.
After sitting for the SPM Shara set her sights on Japan to learn Japanese in the hope of studying aeronautical engineering. Her aviation dreams at least weren't over.
By the third month of her course her dad had told her of an airline willing to recruit female aviators.

Japan had to be for another day.

She immediately enrolled in the MFA and joined AirAsia after her private training.
"I chose AirAsia because it is a company that doesn't discriminate against gender and accepts that men and women are equally capable," she says.

Well said and how true.

Shara's now logged 2700 flying hours and earned the rank of Senior First Officer. But she still gets the sense from some men that she isn't as good as her male colleagues and it's a shame that even her instructor continues to be sceptical of female pilots. Of course she is no less qualified than the boys. Unfortunately, stereotypes persist. She reckons some men feel threatened by smart women and she's probably right. But I'm confident she'll make the rank of captain soon and you can bet I'll be the first male to salute her.

I spent the past week in France. Went to see Airbus and then took a few days off cruising on a boat with my dear friend Stelios Haji-Ioannou, the founder of the Easy Group. It was great fun.

Few know how we got acquainted. I had been working in Warner Music for 15 years. First as Warner Communication then Time Warner. In between, we merged with CNN and finally became AOL Time Warner. That was one merger too many for me and I was against it so in 2000, I stood in the Warner office in Rockfeller Center, New York and I quit. It was impulsive but then I knew that I didn't believe in their vision and I was having problems with my boss anyway so it was time to go. I had no idea what I was going to do but I just felt that the time had come for me to go. I guess I was always aware when my sell by date was.

So I walked. I think my boss was really happy I did. I flew from New York back to London which, in many ways was my home as I had spent such a long time there.

I was watching the telly in a pub and I saw Stelios on air talking about Easyjet and running down the national carrier, British Airways (Sound familiar? Hahaha). I was intrigued as I didn't know what a low cost carrier was but I always wanted to start an airline that flew long haul with low fares.

So I went to Luton and spent a whole day there. I was amazed how people were flying to Barcelona and Paris for less than 10 pounds. Everything was organised and everyone had a positive attitude. It was then at that point in Luton airport that I decided to start a low cost airline. in January 2001, armed with one million I went about building AirAsia. The rest is now history.

So I owe a lot to Stelios. I emailed him a few times. He always replied but was not keen on investing. We became good friends after we met at the World Economic Forum.
Since then we have seen each other quite a few times. The great thing about Stelios is his humility and that's very endearing. He has moved on from Easyjet to Easyhotel, Easycruise, Easycinema, Easybus and even Easypizza.

I watched the Monte Carlo Grand Prix from his apartment. He is right above the start line as you can see from the pictures.

Stelios is like Richard who was also there. These are serial entreprenuers. They like to start a business and then move onto another one. I love his energy, his drive, his desire to have fun but above all, his humility.

A lot has been said about 1Malaysia. My views on that are very clear. I hope one day there will be 1Asean.

So I won't dwell on it. What I would like to focus on are the reforms implemented in the commercial sector by Prime Minister Datuk Seri Najib Tun Razak's administration.

The removal of NEP requirements for 27 service sub-sectors represents a great start. I hope the rest of it will also wound down in time. But I hope more importantly, that the entire domestic economy is reformed.

My wish is that Datuk Seri Najib does a Margaret Thatcher. At present, there is too much vested interest, conflict and red tape that kill creativity, discourage innovation and provide little incentive for entrepreneurs to start and grow businesses. Before all of you jump on me and point to AirAsia's success, yes, we have survived and thrived, but AirAsia could be so, so much bigger and successful if we didn't have to deal with all these issues.

What are they?

1) Government-owned firms should be divested by the state. The government should facilitate the operations of businesses, not run them. I'm not saying GLC's should be sold to individuals like in the past but the public should own them. So instead of Khazanah owning 70 percent of several supposedly private entities, let the public own them. These companies should be put in charge and empowered, not led by civil servants. No matter how highly qualified, civil servants tend to have a singular mind-set which is that of regulators. When they are in charge of GLC's, they are likely to be conflicted in dealings with private firms such as AirAsia. Can Khazanah be really objective on issues regarding AirAsia when it owns MAS and Malaysia Airports Holdings Berhad?

2) If GLC's are 70 percent owned by the public and overseen by professional boards of directors, it is much more likely that the senior management, including the CEO will consist of qualified and experienced professionals --- people seasoned in the private sector and who will come into the job knowing that they can't rely on government intervention and protectionism. This can only help nurture the building of stronger and better brands.

3) Monopolies stifle and strangle innovation, creativity and entrepreneurship. They should be broken up. Look at our airports, almost all under the control of MAB. We have 40-odd airports. Have they been effectively developed? Are they contributing as much to the national and local economies as they should? AirAsia has been stubborn and fought all this every inch of the way, but it has taken a toll on us as well. As for the country, how many good businesses have we lost? How many great entrepreneurs have just given up, tied up in knots by the tangles of red tape and the regulator-mentality of GLC's determined to protect their own turf rather than consider the broader national interest?

4) Private industries coupled with efficient marketing-driven GLC's will get us out of this rut. And then we can have firms that can go out there and be the best in Asean and then in Asia.

Good luck to our new prime minister. He has started off well but as the Beatles once said, it's a "long and winding road." He is right to focus on the economy. Attracting foreign investment is great but he would do equally well, if not better, to remove the shackles that prevent local talent from soaring. It is a Malaysian (note Malaysian) who will grow and drive this country. There is so much talent among our people. Liberate it.

I have received many letters both negative and positive in my years at AirAsia but this letter really moved me. It just goes to show how AirAsia has changed lives and how our dream of uniting ASEAN is fast becoming a reality. This wonderful appreciative man does not look at us as a Malaysian airline but instead as an ASEAN product that has made his dreams come true.

I just wish we can do even more for guests like him. Look at his wish list for us! But how do we set about fulfilling these expectations when we can't even seem to be able to get the details sorted out on our new home, the purpose-built Low-Cost Carrier Terminal at KLIA?

Four months have passed and we still have not heard from the Malaysian Airports Holding Berhad. I am despondent because if we had been allowed to go ahead with Labu, we would have done so much already. The country should not slow down private businesses, especially now in these testing economic times. We need low costs --- and we would welcome more efficiency and passion from MAHB so that we can make more dreams like those of the author of this letter come true.

In times when many focus on the negative, it is so wonderful to get this letter. Thank you Muliadi. You have made an old man very very happy.

Letter from guest

Dear Tony Fernandez,

We send our regards by Attaching my photos with my 4 children in royal palace bangkok. But your system can not allow it.

1. It is a great pleasure to have your letter. You are a legend. The world will remember you for the next 100 years. I will keep your letter to my grand-grand sons. Dou you have pen or anything else with your signature that you can send me so i can keep it too? I do not mind if you like to send me your first airplane. That must be very precious now and next 100 years.

2. How can AirAsia the World’s best low cost airlines because of us? If :
- you do not operate airasia and put the promotions everywhere, how can we fly to other country with cheapest price?
- If Tony Fernandez does not stay in the airport to meet the customers, to know what customers need, and have a passion to serve people, knowing people difficulties, how can I bring my wife, 4children, my mother in law, my father and my mother fly to other country?
- God created the world, to make people realize there is God. and we must see it. To praise and worship Him. He use Tony Fernandez to help us fly. By giving you the vision to see the imposible.
- You create the problems, and we love it.

3. By what you have done, indonesia, malaysia, singapore, thailand, laos , kamboja, myanmar, london, australia, india, received more tourists than before. Hotels, restaurant, shops, everything getting more profit. All the people where there is airasia, they love it. We are live! They are happy. Goverments in those country should give you rewards. But they do not do it nor say it. They just clap their hand. Because there is a song said”if you’re happy and you know it... clap your hands!” My mother 65 years, my father 70 years old, my mother in law 74 years, my children, my nephews, my sister in law, they are so happy these days because they know they will go to Kuala Lumpur on July 10, by airasia. Even it is still 3 months from now. For us$ 45/person return ticket. Low cost create happiness. When will you make promotion from Bali to London for Rp. 0,- cost? I do not mind order it 4 months before.

4. If i may suggests:
- Make agreement to airplanes factory, Buy more airplanes. Make it 7500planes in next 5 years. Open the route all over the world. Let People pay for that 7500planes and then fly them. Promote it:”WE buy the planes, you paid for it! Order now, fly next year”. I believe it will help airlines factories, countries in this global crisis.
- We need cheap rooms to stay during transit in Kuala Lumpur. Before we go to other destination. Nevermind if 1 small room have 6 beds. Like in the prison. Special for airasia passangers. As long as it cheaps, we are happy. In that hotel, we need 7 eleven. That’s it. Will you make that happen? Start from KL airport? Let people pay for that. ”WE built the cheap rooms for you, you paid for it! Order now, stay next year”.
Tony, i like you. You are special. I deeply thanks to you.

Best regards,
Muliadi Sumardi