Compared to owning a football club, it could be argued, that in the present environment, owning an airline is a much easier proposition. When that airline happens to be AirAsia Berhad, the comparison seems even more appropriate, given the success of the business.
In earlier December, Kuala Lumpur-based AirAsia was named the ‘World’s Leading Low Cost Airline’ at the prestigious World Travel Awards 2013 held in Doha, Qatar.
The World Travel Awards, also hailed as the ‘Oscars’ of the travel industry recognizes companies, organizations and brands that push the boundaries of industry excellence. AirAsia emerged as winner in the ‘World’s Leading Low Cost Airline’ category, receiving the highest votes from travel professionals from around the globe, surpassing other nominees in the category, namely Air Arabia, Air Berlin, easyJet, JetBlue Airways, Precision Air and Southwest Airlines.
For Tan Sri Tony Fernandes, Group Chief Executive Officer, AirAsia – and also the majority shareholder of English football club Queens Park Rangers, the accolade was a fantastic endorsement of an airline that had been failing when he acquired it in 2001.
After the award, Fernandes commented: “This recognition is a testament towards the strong brand that AirAsia has built. From a Malaysian start-up, we are now an international brand synonymous with low-cost travel, with innovation as our key driver. This win is the first for us from World Travel Awards, and we would like to thank everyone who voted for us. Every vote signifies the belief that not just our guests have for us, but from travel professionals who see value in our brand.
“This award marks a great milestone for us as we are about to celebrate our 12th anniversary as a group. We have grown from a two-aircraft operation, with 250 staff force; to 147 aircraft in operation today, and nearly 12,000 AirAsia Allstars consisting of nations from around the region. We are proud to be able to make people’s dreams of flying come true, and will take this recognition as another catalyst to provide greater flying experiences for all our guests,” added Fernandes.
In addition to the World Travel Award success, AirAsia was also recently named the World’s Best Low Cost Airline by Skytrax for the fifth consecutive year – further proof of the giant strides that the business has taken under Fernandes’ leadership.
If more evidence was needed, then look no further than to how much the business has expanded. Back in 2001, AirAsia was a heavily indebted subsidiary of the Malaysian government-owned conglomerate, DRB-Hicom and was reportedly a fast loss-making company. The story goes that Fernandes mortgaged his home and used his personal savings to acquire the business which at the time comprised of 2 ageing Boeing 737 jets and a reported RM40 million worth of debts, for one ringgit.
From that point onwards, AirAsia became an enormous success. Post September 11, the entire airline industry was thrown into a state of flux as aircraft leasing costs fell and experienced airline staff from elsewhere, were suddenly available.
Using the proven blue print of successful Irish budget airline Ryan Air, Fernandes introduced a similar offering to Malaysians, providing a cut-price airline that encouraged first-time flyers.
Just a year later, AirAsia had reportedly broken even and cleared all its debts. Its initial public offering (IPO) in November 2004 was also reported to have been significantly oversubscribed.
Today AirAsia’s main hub is the Low-Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA) but it now operates a number of affiliate airlines across the region: Thai AirAsia, Indonesia AirAsia, Philippines AirAsia, AirAsia Japan and AirAsia Zest – with respective hubs in Don Mueang International Airport, Soekarno–Hatta International Airport, Clark International Airport, Narita International Airport, Ninoy Aquino International Airport and Mactan-Cebu International Airport respectively.
Such has been the impact of Fernandes, that in November 2013, he was conferred with an award by the French Government for his contribution to the Malaysian aviation industry and economy.
Fernandes received the Commander of the Legion d’Honneur award from French president Francois Hollande during a ceremony held at the Elysée Palace.
At the event, Fernandes stated: “Aviation is an important industry that not only contributes to the economy of countries, but also provides jobs, connects communities and enhances livelihoods.
“As the group CEO of AirAsia, I am proud that we have positively contributed both directly and indirectly towards many people’s lives,” he said.
Today, the airline has operations in Malaysia, Thailand, Indonesia and the Philippines and has flown over 202 million guests in its first 12 years of operations, through its extensive route network that spans across 87 destinations throughout 22 countries.
The AirAsia Group operates an all-Airbus fleet, which has contributed significantly towards French and European economies via the European-owned and Toulouse-based company and has firm orders of 475 Airbus A320s for AirAsia, and 25 Airbus A330-300 and 10 Airbus A350-900 for subsidiary company AirAsia X.
Focusing on the low-cost, long-haul segment – AirAsia X was established in 2007 and provides high-frequency and point-to-point networks to the long-haul business. AirAsia X delivers cost efficiencies by maintaining a simple aircraft fleet and a route network based on low-cost airports, without complex code-sharing and other legacy overheads that weigh down traditional airlines without compromising on safety.
The business aims to be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares. (894 words)
AirAsia’s success continues to flow but along the way, the company has not forgotten its social responsibilities. In light of the horrific and tragic events in the Philippines, as a result of Typhoon Haiyan, at the time of writing the business has raised over RM1.5 million since launching the multi-tiered #toPHwithlove campaign in mid-November, which aims to raise as much funds as possible to assist with ongoing relief efforts by the Philippine Red Cross, as well as to rebuild the communities of those affected.
The funds raised are from cash donations on board flights and at airports throughout the AirAsia Group network, as well as through AirAsia Foundation’s micrositeairasiafoundation.com/typhoonhaiyan, the philanthropic arm of the AirAsia Group.
To kick off the second phase of the campaign, AirAsia will begin offering guests the option of donating USD1 to help the victims of Typhoon Haiyan while booking their value-added services such as meals, travel insurance and more along with their flights atwww.airasia.com. This option will be available from now until 31st December 2013.