STRATEGIC: AirAsia chief says low fares and geography make Malaysia the perfect location to go anywhere in Asia
Q: You have been in the airline industry now for 14 years. How has the journey been?
A: It still amazes me, when I look at the breadth of the destinations that we go to now. Walking in today (to klia2), one Malaysian woman just said, ‘I want to shake your hand. I never dreamt I could go to all these places. I’m having my fifth holiday this year.’
I said ‘Wow. It’s only June and you’re already having your fifth holiday?’ She said ‘Yeah, I’ve got so many places I want to go to and I get all the low fares.’
She was going to Lombok, which even I haven’t been to. So it kind of amazes me that we’ve actually got as far as we did with the very little resources we had (and) the numerous obstacles that were put in front of us.
It’s amazing, you know. We started with two planes, 200 staff and today, we have 200 planes and 14,000 staff.
We carried 200,000 passengers in the first year and this year, we will carry 55 million passengers. So, if you think about it, that’s almost twice the population of Malaysia we are carrying.
We have won the world’s best low-cost carrier (award) seven years in a row. I don’t think there’s a Malaysian brand that’s been awarded as much as we’ve had. And we built an Asean brand. If you were to name Asean brands, we would be up there. We managed to do it in an environment that is very tough for airlines politically to create a brand outside your own country.
I attribute it to three things, maybe four.
One, a great product. Who does not like low fares? You have to have a great product.
Two, I think we are a very marketing-driven company. We really use marketing. We sponsored Manchester United, we sponsored F1. We did many things that many companies never did before. Now many Asian companies are doing it, but at that stage no one did it.
Three, I think we use technology and we continue to use technology. We were the first airline to use social media. We were the first airline to use the web. We went directly to the consumer.
Fourth, and probably the single most important thing, is people. We built a culture of meritocracy. We utilise the best of Malaysia: Malay, Chinese, Indian, others, whatever.
Our biggest asset is that we can
go to India, we can go to China, we can go to Indonesia, because everyone in Malaysia has some cultural links to somewhere else in Asia, right?
We created an environment in which anyone can do anything. It doesn’t matter what age, sex, colour, and religion you are. If you want to be the best, you can be the best.
We have had so many great stories. Ben from investor relations to CEO. Aireen, who was just an investment analyst, is now one of the top CEOs.
We had a dispatch boy the other day who has become our first officer.
Q: Now you have 60 over women pilots?
A: Correct, 62 female pilots from zero. The other day was history: the captain was female, co-pilot was female, all the cabin crew were female.
And I saw a picture on AirAsia X the other day where even the engineers were female. So we want to promote that later on.
I think that is our single biggest asset and you can’t see that in the balance sheet. Now we have taken it further and made it an Asean culture.
Audrey is the first Indonesian to head up our communications. She is based in Jakarta. We now don’t see ourselves as a Malaysian company anymore. We see ourselves as an Asean company.
Q: And with India and Japan, probably an Asian company?
A: Eventually ... eventually. But right now, let’s deliver the Asean bit.
A long time ago, we were going to call this airline Tune Air because me and Din were from the music business and Aziz Bakar was from the music business.
So when we bought AirAsia (from DRB), we were going to change the name to Tune Air. Actually, the former minister of tourism (Tan Sri) Abdul Kadir (Sheikh Fadzir) said to me, ‘Tony, you’re stupid. It’s such a great name — AirAsia. People would pay millions to have (the name) AirAsia.’ And so we thought, ‘Yeah, he’s right.’
When we did our first joint-venture, (then Thai prime minister) Thaksin (Shinawatra) said to me, ‘You know why we did the deal with you guys? Your name is AirAsia.’ He said every company in Singapore has something Singapore in front of it (for example, Development Bank of Singapore, Singapore Telecoms, Singapore Post).
He said, ‘But you are neutral. You have AirAsia.’
Q: If you were to have a chance to start all over again, what do you think you will do differently?
A: That’s a damn good question. No one has ever asked me that. I don’t know there’s a balance, whether my mouth, my aggression may have alienated people, but I’m not sure if I was a pussycat, we would have still been alive.
If we didn’t fight … You know, in the beginning, when we had our first battle with MAS, I gate-crashed the party to see (former transport minister) Tun Ling (Liong Sik), who didn’t even know who I was, because I felt we were going to get killed by MAS when they dropped all their fares. To his credit, Tun Ling saw me and we got some support.
I’m not sure whether my aggression, which obviously alienated lots of people and still alienates people, whether if I was more diplomatic, it might have been better.
I’m not sure.
Q: But on hindsight, the fighting spirit in you actually built this company.
A: I think so. Not just me, but everyone. It’s complicated in Malaysia because the government is involved in business. So, when you fight, sometimes they think you’re fighting the government, but I’m just fighting an airport or an airline.
We have had two battles in Malaysia, with MAS and MAHB. MAS is over. We are now part of an association. They know their market and we know our market.
If you look at this terminal (klia2), it is a monstrosity. It is not low-cost. While others … Changi has worked with us to build Terminal 4, which is low cost. Thailand is working with us at Don Muang to make it low cost. The Philippines, Indonesia ... all are.
This is our home. This is where we want to make this Dubai of the East.
I’ve been fighting to call this terminal LCCT2 because I want the world to know that low cost is here. Come here for the lowest fares.
klia2 means nothing to a guy in London. But low-cost terminal means this is a place where I get low fares. We’re creating a campaign to say one stop to anywhere in Asia.
When I went to Dubai I was blown away. Wow! The airport and the airline were so together and you can go anywhere from Dubai. Literally, anywhere.
Dubai is in a perfect geographic location for that to happen. Malaysia is in a perfect location to go anywhere in Asia. We are almost in the middle of Asia. Eight hours up to Beijing, 8 hours down to Australia.
Our idea was to make Malaysia the hub of Asia. We are the only airline that goes from Bandung to Xian or from Miri to New Delhi. There is no airline that can do that.
Yesterday, I was going through a presentation and I saw one slide on Fly-Thru. In the top three routes for Fly-Thru, there was one route that really made me almost choke up when I saw it. It was Singapore-Tiruchirappalli.
That means for the first time, Singaporeans are coming up to KL to fly to a destination. And then, when I went back and searched, and our Fly-Thru is Singaporeans. All these years, we flew to Singapore to catch other flights. Now it’s the other way around.
So I’m thinking, why doesn’t this airport support us more? It’s a volume game. If I can take this from 24 million to 50 million, who wins?
If I was a CEO here, I’d be at Aireen every day (saying), ‘What can we do? How can we brand this? How can we work this?’ As opposed to always working against us.
So, in my 14 years, that is the biggest regret that I have, that we haven’t been able to work with our home-base airport and it is costing jobs. If we work together, we could create more jobs.
Q: If you were to give this terminal to Emirates, they can do wonders?
A: Exactly. You look at Dubai and look at the Emirates airport authority. I can’t even get a bunting up here (at klia2). They want to charge me RM2,500 to put our logo on the check-in counter.
The terminal is boring. You go to Virgin terminal, it’s red and they have maps that show they’re flying everywhere. You got to Southwest in Dallas; you have Virgin Blue in Australia, Jet Blue in America.
How is this like? There’s no energy, no excitement, there’s nothing. For two years we have been fighting, for two years.
During peak period, it’s a nightmare because of the way the airport was designed. But we have been pushing for self (baggage drop).
Right now, you can check-in at home, you can print your boarding pass and tag your bag. We want it to be easy for you. Print the tag, print the boarding pass, just come and drop the bag. Off you go.
Two years, we haven’t been able to get a deal. At Senai Airport, it’s already operational for eight months. Why? Private airport. You can see the benefit.
Our biggest growth is in Johor. They give us the incentives, they work with us, they are proactive with us.
Q: You didn’t talk about interlining yet.
A: Can you imagine? Emirates and people like that want to interline with us, but they’re in another terminal. Can you imagine working with these guys on that? They’ll probably going to charge us for that. Really, there should be a train between the two terminals.
Q: It’s not two different terminals. It’s two different airports.
A: Exactly. I’ll just highlight one more point on what we have to go through.
When you go to Heathrow and you go between terminals, you don’t pay anything, right? Here, we pay.
It’s madness! How do you encourage people coming off Emirates and Etihad and all these people to come and take AirAsia? While other airports facilitate the ease of movement, I don’t even know whether there’s a bus between the two terminals.
Later, I’m seeing the CEO of Garuda and he said, ‘How do I come here (klia2)? I said there is a train, but forget it, I’ll send a car to pick you up.
But you can see despite all this, we have created something
special, which I think 99.9 per cent of Malaysians love. I only have to walk out there and
everyone says good things, right? Of course, there are days that many people want to kill me…
My only regret in these 14 years is the fact that I have not got a commercially-driven airport.
While we have done great, if we had the support Emirates has, we could be 100 million passengers. This terminal is already bigger than all of KLIA1. You can add all the airlines there, this is still bigger.
Look at what we have done in KK. Look at what we have done in Johor. And KK, it was wrong to move us to Terminal 1. Already it’s getting full. We need a low-cost terminal. We need a low-cost terminal in Kuching. We need one in Penang, and honestly, we could have one in Kota Baru.
Q: Penang is getting congested?
A: Yes. There’s no planning. Where is the new terminal going to be built?
Malaysia has a golden goose here. We tried to build our own airport for RM1.5 billion in Labu. It was killed. MAHB said they can do it in two years for RM2 billion. In the end, this airport cost almost RM5 billion and it’s falling apart. You walk around, holes here, cracks everywhere.
The buggies cannot fit in the corridor. It’s so small. You have to take three buggies to get to some gates. It can take you 45 minutes to go from one end to another.
Q: It’s poorly designed?
A: Yes, it’s poorly designed, poorly executed. No commercial sense. You have to walk through a shopping mall to get to the terminal.
We have a supermarket here. It’s the only airport in the world with a supermarket. But where are the biggest supermarket customers? My own staff!
I think the message is, if we can get the airport to be commercial, there will be lots more jobs in Malaysia, more economic growth and we can beat Changi.
Q: What do you think of Aeropolis?
A: I think it’s a good idea. But let me also say that their (MAHB) first job is to make a good airport. Before you start building cities, make sure your home base here is good.
I think it’s a great idea. It’s common sense. Aeropolis, or whatever you call it, the major beneficiary … you can only build it because of airlines.
If I have 50 million passengers here, Aeropolis is going to be much more worth it. So shouldn’t they focus on making us much bigger? Then it’s much more valuable.
If you only had KLIA1, the outlet mall will be a disaster. But because there are KLIA1 and klia2, more people are going to their outlet mall.
If you walk around this airport (klia2), I don’t know how anyone knows how to get there. There is no transit product. We have many passengers who are on transit. They could spend three hours, four hours shopping there.
They should provide tours to Putrajaya. You go to Dubai and Singapore and there are so many things to help transit passengers.