AHMAD AMIRUL ZAID BIN AHMAD NIZAM

INTRODUCTION

In Asian aviation industry, the name like Singapore Airlines, Cathay Pacific Airways and ANA AII Airways often hits mainstream with accolades of awards and recognition for their hospitality and service offered. For most people, their need to travel also often come with constricted budget and hassle. Hence, they cannot afford such luxury. Just like rains pouring when most aviation business went plummet post 9/11 terrorist attack due to decreasing passenger. Seeing this as an issue, Tony Fernandes rose with AirAsia as his solution.

THE MAKING OF AIRASIA

In mid 1990s, Fernandes saw low-cost airline with no frills as a potential in Asia after he witnessed the success of European low-cost airline, Ryanair. Under the tagline “Now Everyone Can Fly” with price 40% to 60% cheaper that its’ competitor and several bus fares, AirAsia became the first airline operator in Asia that offered low-cost and no-frills indicate that as a businessman, opportunity can also come in hard times and one should seize it. Tony Fernandes took a huge risk as he bought a debt-ridden airline in order to realize the low-cost flight potential shown that there is always risks and uncertainties with every decision made. It is why we should have a contingency before taking leap like Fernandes recruiting the right guy for the job post-acquiring AirAsia.

THE RISE

Following the success of AirAsia domestically, Fernandes looking on expanding AirAsia. He later affiliated AirAsia with other airlines in neighbouring countries such as Thailand and Indonesia and having hubs at both countries. Joint ventures with other airlines have enabled Fernandes and AirAsia an access to more South East Asia countries and China for a cheaper price. Besides, it is also broadened AirAsia destination selection for Malaysian consumers and number of passengers grew significantly in mid 2000s. In effort on taking AirAsia to the next level, AirAsia then introduced their first long-haul flight through AirAsiaX that offered two class seats. This indicate that no one could success alone and networking is crucial for business growth. What Fernandes have done shown that he does not on planning getting even and become ‘local hero’ as he always planning on keep moving forward while taking risks.

THE COMPETITION

As men does not alone in this World, there is always competition. Initially, AirAsia does not have any issue with competition as they did not have any. After years in the game, AirAsia has become inspiration for other airlines to follow their footsteps. Malaysia Airlines (MAS), government-owned airlines introduced their “Low Fare Everyday” campaign and their own low-cost airline, Firefly to boost profit and revenue since MAS always on the losing side battling with AirAsia. This cause uneasy on AirAsia since a full-service airline offering the same price as low-cost airline, it could lead to the end of AirAsia. These moves made Fernandes felt like betrayed by his own government. Rather than fleeing country like any other tycoon would do, Tony Fernandes wanted to have a healthy competition and healthy business in Malaysia by came up with another campaign commonly known as “Sub-Zero Fares”. This battle ended up with stalemate since both sides earned a steady profit while their own respective brands remained untarnished.

WHAT IS NEXT?

It is witnessed that running airlines are not a cake walk. It takes wits and sheer determinations in order to stay in the game. Facing troubling issues such as competitive market, unstable oil prices and intangible relationship between countries are not for everyone. What Tony Fernandes and his team did with AirAsia should be commended as they have brought Malaysia to another level in aviation industry. My hope is that many other Malaysian witnessed this as motivation for them to reach for another level like Tony Fernandes.