Tony Fernandes shares AirAsia’s secret to success – and it involves a surprising office dress code

Tony Fernandes, AirAsia Group CEO at Money 20/20, where he talked about the airline’s secret to success.
Business Insider/Jessica Lin

Malaysian low-cost airline AirAsia may be flying high today, but this wasn’t always the case.

After 16 years with Tony Fernandes at the helm, the airline has grown from having just two planes and 250 employees, to a group of companies with a total of 220 planes and 20,000 staff in its payroll.

The company’s group CEO recounted his experience growing the airline at the Money 20/20 conference in Singapore on Thursday (Mar 15), where he officially launched the company’s new fintech platform BigPay.

“I came from the music industry, and I actually had no idea about airlines, and I have no idea about fintech – so we’re about to succeed,” he said to roaring laughter from the audience.

Telling the audience about the humble beginnings of AirAsia, Fernandes said: “There’s a very fine line between brilliance and stupidity – it’s very, very narrow. But I thought, you know, I’m 30 plus – if I fail, I fail. I didn’t want to sit there and say ‘I wish I did that’.”

When Fernandes offered to buy a debt-ridden AirAsia from its original owner DRB Hicom for RM1 (25 cents), the sellers were quick to accept and eager to offload the airline to him.

“I thought: ‘Damn. I should’ve said – pay me to take this airline’,” Fernandes said.

Tony Fernandes during the beginnings of AirAsia.
The Business Times

Referring to the bird livery on the original AirAsia plane under its former owner, Fernandes said: “I don’t know why other airlines are obsessed with animals.”

He also poked fun at other airlines in his speech littered with jokes.

“In Malaysia, there’s an airline called Firefly – really stupid name because it is the shortest-living insect in the insect kingdom. And there’s Tiger here, oh no there’s no more Tiger… there’s Scoot – another great name,” he said to an amused and tickled audience.

There will always be calamity

Although it’s been successful, AirAsia has had to weather its fair share of storms.

But Fernandes, 53, said the journey has been “great” despite having to deal with all the problems of the aviation industry.

“There’s always going to be problems (and) calamity, but there’s always a way around it. And every time there is a crisis, there’s an opportunity. So don’t get demotivated when things are not going as planned,” he said to the crowd of hundreds.

AirAsia’s first flight from Senai to KL. Passengers boarding the AirAsia Boeing 737 plane at Senai Airport.
The New Paper

Remembering the Sars pandemic in 2002 and 2003, Fernandes said his marketing team had thought it was the end of AirAsia’s business because nobody dared to take airplanes.

But instead of caving to pressure, Fernandes told them to triple their marketing efforts.

His directive to them was to increase marketing, and drop the ticket fares.

“Because I knew Malaysians very well – if you put a fare low enough, they will risk their lives,” he joked.

And his plan worked.

“We didn’t fill the planes, but we made a bit of money and we survived,” he said.

The secret sauce

Throughout its history, AirAsia has always found a way to disrupt the market in different ways, Fernandes said.

“60 per cent of our routes are routes that no one ever did before,” he added, citing the Macau route as an example.

The Inaugural flight of AirAsia from Senai to Kuala Lumpur took off on 22 October 2003.
The New Paper

He said: “We started with one flight a day, and we now have 22 flights a day. We’re bigger than Air Macau.”

The Kuala Lumpur-born CEO was evidently proud of the fact that despite his initial lack of knowledge of the industry, AirAsia has now won in the low-cost category of the Skytrax awards nine consecutive times.

And the secret behind the airline’s success, he said, is its people.

Addressing entrepreneurs and company owners in the audience, Fernandes said: “Your biggest asset is your people.”

One of the highlights of his leadership style is the fact that he looks worse than his employees, he said.

Fernandes believes in looking “worse” than his staff.
The Straits Times

“We don’t dress up. I dressed up today for Money 20/20, but generally, I look worse than my staff, because if you look better, there’s a little bit of a distance. But if you look worse, they feel comfortable talking to you,” he said.

“It tends to be a problem at Malaysian airports because they think I’m an illegal immigrant but I’ll live with that,” he said as the audience erupted in laughter once more.

Calling AirAsia “a place of innovation”, Fernandes said the company is “all about people, believing in people, and believing in ideas and allowing ideas to just take and not worrying too much about risk”.

Women a big part of company’s success

According to Fernandes, AirAsia was the first airline in Malaysia and Asean to ever have female pilots.

“That’s such an obvious thing. Why cut out 50 per cent of the workforce?” he asked.

Today, 10 per cent of AirAsia’s workforce is made up of female pilots. A Forbes article reported in 2016 that only 5 per cent of pilots in the US and Canada are female.

AirAsia even counts former Miss Thailand Chananporn Rosja one of its pilots.

“We’re the only airline in the world with a Miss Thailand flying for them – beat that, Singapore Airlines,” Fernandes said.

Jokes aside, the moral of the story, he said, is that companies should behave in a way that its people can pursue their dreams without being afraid.

“We’re such a flat structure that anyone can believe that they can ask anything, or innovate, or dream to progress themselves or progress the company,” he said.