New | AirAsia tycoon Tony Fernandes faces first major crisis after turning troubled carrier into gold
Fernandes maintained an image of calm even as his company plunged into what he described as a nightmare after flight QZ8501 went missing in bad weather.
Malaysian mogul Tony Fernandes transformed a floundering carrier into Asia’s biggest budget airline. Now, he faces his company’s first major crisis after a Singapore-bound plane carrying 162 people disappeared from radar about halfway through the flight on Sunday.
“Obviously this is a massive shock to us and we are devastated... [But] our concern right now is for the relatives and the next of kin. That’s our number one priority,” he said after arriving in Surabaya, where most of the passengers are from.
“This is my worse nightmare,” Fernandes wrote on Twitter. “But there is no stopping. To all my staff Airasia all stars be strong, continue to be the best. Pray hard. Continue to do your best for all our guests. See u all soon.” Shares in the company this morning were down 11.56 per cent.
Read more on missing AirAsia flight QZ8501
The incident with QZ8501 caps a disastrous year for Malaysian aviation which saw beleaguered rival Malaysia Airlines suffer two air tragedies in rapid succession: the disappearance of MH370 in March and the rocket attack on MH17 just months later. Both flights had no survivors.
AirAsia, which has never lost a plane before, is credited with starting a revolution in the skies of Southeast Asia and has seen spectacular growth under Fernandes’ low-cost, low-overheads model despite intense competition.
WATCH: AirAsia chief gives a statement about missing flight QZ 8501
Born in Kuala Lumpur in 1964, Fernandes went to boarding school in Epsom, Surrey, before going on to study at the London School of Economics. He followed mentor and eccentric Virgin CEO Richard Branson’s own trajectory of beginning in the music industry, working for Virgin after graduation.
In 2001, aged just 37, he made his move into airlines by snapping up AirAsia, then a debt-strapped state-owned airline, for a token sum of one ringgit (HK$2.20).
AirAsia, acquired shortly after the 9/11 attacks in the United States sent the global aviation industry into a tailspin, had been 40 million ringgit in debt and was given little chance of succeeding. But mortgaging his house to pour money into the carrier, Fernandes defied naysayers and turned it into a lucrative venture.
The branding of Fernandes’s airline felt like Branson’s Virgin, down to the colour scheme and logo typeface, but the bigger inspiration was the boom in low-cost flying that was transforming Europe’s flight maps.
Soon the fleet was expanding rapidly, and within a decade AirAsia was flying 30 million passengers annually. Fernandes is ranked 28th on the list of Malaysia’s richest with an estimated net worth of US$650 million.
While the group’s headquarters is in Malaysia, the AirAsia brand has become an umbrella for foreign airlines in which Fernandes has a stake.
He bought 49 per cent of the then AWAIR, an Indonesian low-cost carrier, in 2004, changing it to Indonesia AirAsia the following year.
Similar joint ventures have brought AirAsia into the Philippines, Thailand, Japan and most recently India. With large numbers of new planes on order, Fernandes has spoken of AirAsia X linking Europe and Asia via low-cost long-haul in the years ahead, starting with a London route.
Of Indian-Portuguese descent and married with two children, Fernandes was made CBE, an honour given by the British queen, in 2011.
For all his entrepreneurial nous, Fernandes has made questionable ventures in other arenas.
In Britain, he struck a deal with Formula 1 boss Bernie Ecclestone in 2011 for a majority stake in the Premiership soccer club Queens Park Rangers. It overreached itself in terms of salaries for star players it could barely afford, and who failed to deliver.
A four-year adventure in Formula One, buying up racing team Caterham, also came to an end early this year. Fernandes faced problems over the transfer of ownership to Swiss and Arab businessmen.
In fact, a bet between the two tycoons recently saw the Virgin boss dressed up as a stewardess serving passengers on AirAsia flights.
Fernandes is prolific on social media and was quick to share condolences and keep the public informed as he made his way to Surabaya in Indonesia to meet relatives of the passengers aboard flight QZ8501.
After Sunday’s apparent disaster, AirAsia swiftly replaced its distinctive bright red logo on its social media pages with a grey background.
Endau Analytics aviation analyst Shukor Yusof said Fernandes’ entrepreneurial spirit would survive Sunday’s apparent tragedy.
“This incident will not dampen Fernandes’ business spirit. This is such an unfortunate incident. AirAsia remains a strong budget carrier. I think the people will rally behind AirAsia,” Yusof said.
The airline, which has never before suffered a fatal accident, has more than 120 A320s and is one of the biggest customers for the European aircraft maker Airbus. It is expecting nearly 360 new aircraft to be delivered by 2026.
AirAsia, which has some of the lowest unit costs in the world, has raked in business awards and accolades over the years, while expanding aggressively. Last year it was ranked as Asia’s and the world’s best low-cost airline for the fifth time in a row.
