From a two-aircraft airline to one of the largest and most respected budget carriers in the world, AirAsia proves that passion and perseverance can propel a simple dream to a spectacular reality.
Words: Shantini Suntharajah
It all began with a dream
Back when AirAsia’s Group CEO, Tan Sri Dr. Tony Fernandes was a boarding school student in England, his dearest wish was to fly home to Malaysia during his half-term holidays. Unfortunately, for the homesick adolescent, this simple desire remained out of reach. Flight tickets were prohibitively expensive back then, and regular visits home were out of the question. So, young Tony dreamt of a day when a flight from London to Kuala Lumpur would be affordable enough for people to make the trip without worrying about cost. It was the first spark that instilled a deep desire to make air travel accessible to everyone.
It would take more than 30 years but this dream would become a reality in a way that Fernandes himself could not have imagined. He didn’t know it then but he would one day be the man who could honestly proclaim: Now Everyone Can Fly.
The One Ringgit Man
The true story of AirAsia is so incredible that it might have been lifted from a Hollywood movie.
Although Fernandes had that first notion for cheap flights between England and Malaysia back in boarding school, it was not a dream he pursued from the word ‘Go’. He graduated from the London School of Economics, worked in finance for some time and then became a successful music executive. Although not a businessman by profession, Fernandes certainly displayed business acumen when he foresaw a dim future for the music industry at that point. In a surprise move that foreshadowed his trademark spontaneity, Fernandes quit his job at the peak of his career.
It was around this time that he and a number of talented colleagues from the music business heard about an ailing airline, which belonged to a government-owned conglomerate. Together with partners Dato’ Pahamin Rejab (former chairman of AirAsia), Dato Kamarudin Meranun (present Deputy Group CEO, AirAsia), and Dato Aziz Bakar (present Chairman of AirAsia), Tony Fernandes founded Tune Air Sdn Bhd in 2001. His vision was to democratise air travel and free it from the clutches of the elite by offering low fares and quality air travel. The four partners bought the then bleeding AirAsia from its Malaysian owner DRB-Hicom, for a token RM1 (USD 0.25 cents), and agreed to take over the airline’s RM40 million debt!
Driven by Fernandes and his team of capable partners, AirAsia repaid that debt in less than two years – despite the fact that it was operating in an extremely challenging environment in the post-September 11, 2001, era. It started with two planes (Boeing 737-300s), one destination (Langkawi island) and a staff of just 250.
Fernandes remained unperturbed by what others believed to be an incredibly bad time to purchase an airline. This was also the year the world witnessed the most horrifying tragedy in aviation history – the 9/11 attacks in the US. The future seemed decidedly bleak. Airlines across the world were retrenching employees, and travellers feared air travel. The entire aviation industry seemed on the verge of collapse.
Fernandes and his team saw this as a golden opportunity to revive the industry by introducing a brand new airline with an unusual business model. The slump in the aviation industry steered many skilled and experienced industry workers to the fledgling airline. Expanding the fleet of aircraft also proved to be cheaper than expected, as lease prices were at an all time low. It was the most opportune time to expand the airline with bigger and better plans for the future.