Tony Fernandes CEO Blog

In the history of my working life, innovation has been the one priority foremost in my mind to ensure that we are always competitive. I was thrilled when Fast Company voted AirAsia as one of the top 50 innovative companies in the world. It was a thrill to be in the same ranks as Apple, Google, Nike and BMW.

Fostering a culture of innovation within the organisation is a challenge and over the next few years, I will be seeking to study even more deeply the factors inherent in how one creates an environment that can foster innovation. Some of it is cultural; some of it is due to the environment we live in. In Asia, society is still largely hierarchical and conformist. Yes, it is changing thanks to the digital era but we are not there yet where people speak up freely and boldly without on a regular basis.

So, at AirAsia, we’ve sought to level the playing field. We are a company based on meritocracy.

We value creativity and seek it from whatever the source. To encourage free-flowing exchanges of ideas, we did away with titles on our business cards, we dress down, our offices are open-plan based for effective communication, and we have a powerful Intranet which allows for forums and discussion.

We constantly challenge ourselves to find better ways of running not just our businesses, but also our own lives and helping society. I want to build a room dedicated to innovation, a room where the sparks set off by the creative tension of the debates and discussions will light up our entire company and become a catalyst for change.

We have implemented many innovative actions over the last seven years since taking over AirAsia, but we cannot lay claim to inventing the low-cost model for airlines. That accolade belongs to Southwest. But what we did invent was AirAsia X, the world's first truly long-haul low cost airline.

I was thrilled to invite Richard, whom I worked with to join me in this quest to go where no man had gone before; to link communities and cultures and make the world an even smaller place at a very affordable price. AirAsia X is basically AirAsia on steroids.

We have more seats per square inch in the aircraft, but it's still comfortable. We execute fast turnarounds (yes, it does make a difference), we have high utilisation and we will go to secondary airports such as Gold Coast (Coolangatta) in Australia. In just one year, we have had three Airbus A330-300 planes delivered to us and will potentially have eight aircraft by the end of the year, consisting of six A330s and two A340s.

It's a one-class flight, though you can pay a slightly higher fare for premium XL seats. We charge for food. We have a fantastic in-flight entertainment system and, of course, we linked AirAsia X with the very powerful and extensive network of AirAsia.

On the 11th of March, when AirAsia X will have the first London- to- Kuala Lumpur flight, it will be a proud day for me as it will be recorded in history as the longest low-cost flight. And I do believe that this flight will change aviation forever.

Outside of aviation, we have come up with Tune Hotel which is a five- star limited service hotel.

Check it out at www.tunehotels.com, with rooms starting from USD 2 a night and averaging around USD 10 a night.

In summary, innovation opens pathways that appear closed. Innovation provides opportunities to live your values, even as it improves a company’s bottom line. Only innovation -- be it in our business, our lives, our societies, our nations – can ensure that we overcome the personal, national and global challenges that we face daily.

What can you do for your country, not what your country can do for you.

A Happy 2009 to all.

It has been a very strange 2008. For many, it has been an Annus Horriblus. Some cry at the wealth they have lost as the global financial system went into meltdown and national economies slipped into recession. Many are fearful about their own future. And most are glad to see the back of 2008.

I understand their pain. But for me, 2008 has been a truly defining year. A year that ensures that Malaysia and the world will never be the same.

In my business world, it’s been a year when AirAsia finally got almost a level playing field , a year where Tune Money realised that it’s not just about a great product, a year where Tune Hotel got off the ground (and I believe will be a global brand) and Tune Talk finally got a partner. Serving the underserved is what Tune and AirAsia are all about, as someone pointed out in his blog. It was a year I learnt that attention to detail and having proper systems is crucial.

For Malaysia, I think we learnt that democracy is here to stay, and we the people do have a say in shaping our nation’s future. In the March 2008 elections, Malaysians delivered a clear message to the powerful: We all have a view and our opinions and intelligence should be respected and taken into account. I hope we will use that power wisely in the days, months and years ahead.

For the world, it was a year that emphatically reinforced all the old axioms about the evils of greed. Foreign bankers have brought the world to its knees. Casting prudence and good sense aside, they financed a buying binge that was probably unprecedented in history. Many people took advantage. Spurred by the availability of cheap cash, they allowed greed to overwhelm their senses. One house wasn't enough, so they borrowed and borrowed. And bought two, three, sometimes four. Banks happily fed the spending beast, and all that materialism and consumerism is now coming home to roost. The house of cards toppled, and now the pain has begun – and likely to last a while.

So what are my hopes and aspirations for 2009?

1) I hope Malaysians will change forever and look at what they can do for the country, instead of relying on the nation to provide everything. We must be positive and see what we can do to make this country a better place. Sitting back and criticising and not changing will just not work anymore. And I do hope that when we speak, we present our views clearly, rationally and with sensitivity instead of doing so anonymously. So many of those who post their views on blogs, for instance, just criticise and do so anonymously. If there is something to be said, say it openly and be prepared to defend your views in open debate.

2) We as a community must demand more from our education system. If our national schools eradicate their deficiencies and all were more like Victoria Institution or St. John’s, for instance, Malaysians of all races will be lining up to send their kids to national schools. There would then be no need to waste time on pointless debates about vernacular schools and such. Get the national schools right, and we will be on our way. It’s about providing the people with palatable choices.

3) We have to improve the standard of English among our kids. If we are to be globally competitive, then you can't run away from the need for a high standard of English. That's not saying we should not also be fluent in our own mother tongues. How I wish I could speak other languages. Imagine if all our kids could fluently speak English, Malay, Mandarin and Tamil or Hindi! How powerful that would be! But we must be masters at English.

4) Hopefully, banks will be responsible in providing credit to allow businesses to function effectively. The lesson from the financial crisis of 2008 is not that banks should not lend, but should do so in a prudent manner and only to businesses that are genuine rather than hand out loads of cash to every charlatan who comes knocking on their doors.

5) That 2009 will be the Year of Meritocracy. Adopting meritocracy as a policy in all sectors will help lure back smart Malaysians and not risk losing them to other countries, especially Singapore.

6) Hopefully, in 2009 our civil servants will see the value of private entrepreneurs and not regard them with undue suspicion. Yes, I’m sure they have been hassled by many Malaysians with get-rich-quick schemes, but there are just as many, if not more, genuine Malaysian businessmen out there.

7) That Malaysia takes the lead in making the Asean economic union a strong and viable reality. Imagine a market of 600 million! Our region would no longer be at the mercy of the industralised world and we would be able to shape our own future.

8) I hope Malaysians will take a grip of their own lives and design their own destiny. Don't complain, don't wait for handouts, go out there and make a difference. Don't be negative and have a real can-do mind-set.

9) And finally, on a personal note, I want to lose weight. I am already doing the obvious – watching my diet and trying to work out more often. Any other tips would be greatly appreciated.

Happy New Year, all.

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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