Writing his final chapter at AirAsia

Fernandes: To build an airline is tough, to rebuild an airline and build four other businesses, has been the ultimate challenge.

IT is a bittersweet moment for AirAsia founder Tan Sri Tony Fernandes as he looks out of his floor-to-ceiling window at the airline’s headquarters at Kuala Lumpur International Airport 2.

This is the place where he spent a decade at, watching his planes take off and land from this very window.

However, in the new year in 2024, Fernandes will make Wisma Tune at Damansara Heights in Kuala Lumpur his new “nest”.

“This is my final chapter and it is significant that I move out from this office,” Fernandes tells StarBizWeek at AirAsia RedQ two weeks before the end of 2023.

“I have sat here for more than 10 years at RedQ. Whenever I come here, no matter how down I am, I feel energised. It is a timeless office in many ways.

“It doesn’t seem to have aged which tantamount to what Capital A Bhd is growing; our culture. It is something that is intangible. Our culture is amazing. That is what kept us growing.

“Sitting here, and watching my whole 10 years flash by, planes coming and going. Planes stuck because of Covid, not a single person at the terminal (during the lockdown). It was surreal.

“Now when I see our planes landing every five minutes, it is an amazing feeling for me. It has been an incredible turnaround,” he says.

Trials and tribulations

Fernandes, who turns 60 in April, has been in the aviation business for more than two decades, having gone through numerous trials and tribulations. He is the executive director and chief executive officer of Capital A (formerly known as AirAsia Group Bhd).

In fact, from the word “go”, he was faced with a great challenge. This was because soon after AirAsia started its budget airline operations, it was affected by slow travel demand due to the severe acute respiratory syndrome (SARS) outbreak in 2002/2003.

Thereafter, when its long-haul budget carrier AirAsia X commenced operations, it was hit by the Global Financial Crisis in 2007/2008, which was the most severe worldwide economic crisis since the Great Depression.

In December 2014, there was the unfortunate fate of AirAsia Indonesia flight 8501, which crashed into the Java Sea off Borneo shortly after take-off with no survivors.

But the Covid-19 pandemic in 2020 probably hit AirAsia group the worst as the entire world came to a halt, as travel and business activities were almost non-existent in order to curb the widespread of the virus.

Without revenue for almost two years, the airline quickly ran out of cash and had to take drastic action to salvage its business including slashing its workforce and getting its creditors to take a severe haircut.

As such, it was a sense of relief that Fernandes was able to rehire his Allstars, a term used for AirAsia employees.

“Of my 22 years in the business, this (2023) is the greatest year. People would think that (the greatest year would be) starting an airline, winning our first award (but it is not). Why is this the greatest year? It is because we made 2,600 people redundant and we hired them all back.

“This, to me, is my biggest success story because these 2,600 people did nothing wrong. It was purely first in, first out that we picked these numbers. It was tragic for me and I promised (to hire them back). In my heart, did I know I would do it? Not sure,” Fernandes confesses.

“To build an airline is tough, to rebuild an airline and build four other businesses, has been the ultimate challenge. What kept me going? To make sure I pay the Allstars and prove people wrong. This is probably one of the greatest comebacks in Malaysian corporate history,” he adds.

Now that Fernandes has fulfilled his promise to his staff, he is ready to move to the next chapter of his life with the group, having put in place a succession plan.

“What we did during Covid was to build a good succession plan, the next line of management. We have five very good leaders under me. Bo Lingam, Pete Chareonwongsak, Nadia Omer, Zubin Rada Krishnan and other CEOs for Capital A Aviation Services,” he says.

The most recent move was the appointment of Riad Asmat to AirAsia Aviation Group board of advisers, as he relinquishes his position as the chief executive officer of AirAsia Bhd (AirAsia Malaysia) effective Dec 31, 2023.

Building a strong corporate governance structureThe second part of the succession planning, Fernandes says, was building a strong corporate governance structure.

“As entrepreneurs and shareholders, we think it’s time for us to step back from the boards and turn this into professionally-managed boards.

“We have done this first in our biggest company, which is the Airasia Aviation Group, of which Kamaruddin and I are not on the board. It is completely independent,” he explains.

AirAsia Aviation Group Ltd (AAAGL), the holding company for Capital A’s airline group, appointed Tan Sri Jamaludin Ibrahim as its independent non-executive chairman on Feb 11, 2022, to provide fresh perspectives and robust board leadership to support the strategic growth of the airline businesses.

Thereafter, in March, AAAGL announced its newly formed board of directors comprising Suvabha Charoenying, Lim Serh Ghee, Francisco Ed. Lim, Tan Sri Mohamad Norza Zakaria and Tharumalingam Kanagalingam, better known as Bo Lingam, who is also its president (aviation) and group CEO.

In August 2022, AAAGL added Thandalam Veeravalli Thiru-mala Chari and Khoo Gaik Bee to its board of directors.

What does this mean for Fernandes, who is synonymous with the AirAsia brand, as he moves to the next phase in his life?

“2024 is about restarting where we were in 2019 with five companies. My next chapter is to deliver value of the five companies. Using my experience to shepherd them through. So they have got four to five years of me to bring them up and then I go off.

“I will be around for at least another five years, I think. But this is definitely my last five years.

“I will probably play a more advisory role. I think the market still wants me there in the airline business but I don’t want to be an active CEO.

“If I were to leave a company and the next leaders do a better job than me, then I would have been a great leader,” Fernandes concludes.