How AirAsia's CEO Spreads His Wings
Tony Fernandes says he is living a "boy's own dream." Last summer, the
Malaysian-born entrepreneur was running Asia's biggest budget airline, a
Formula 1 team and a global hotel chain. Clearly, this wasn't demanding enough,
because in August the self-confessed sports fan paid around £35 million ($55.4
million) for a majority stake in English Premier League soccer team Queens Park
Rangers.Enlarge Image
For a shy boy who, at the age of 12, was dispatched on his own from Malaysia to
a private school in England, Mr. Fernandes has come a long way. In 2001, he
paid 25 cents for AirAsia Bhd, a Malaysian government-owned airline. Starting
with two planes and $11 million in debt, the low-fares airline has since
carried some 120 million passengers from its hub in Kuala Lumpur."I bought a
football club, I own a Formula 1 team. I have been in the music business and I
own an airline," the former Warner Music managing director says with a laugh.
"It's kind of unreal. But you do make your own luck and fortune favors the
brave."On any given day, Mr. Fernandes can be found fielding a request for a
multi-million-pound soccer player, watching his F1 team Caterham at a racing
grand prix, or buying a fleet of planes for AirAsia.When we meet at his town
house in central London, Mr. Fernandes is all smiles, swiftly brushing off the
suggestion that he is spreading himself too thinly.Joined by Philip Beard, the
man he appointed as chief executive of QPR, he studies new stadium plans for
the club in West London. At the same time, Mr. Fernandes scans the price of oil
on his iPad, fires out messages to his 168,000 Twitter followers and explains
why attending the exclusive Epsom College as a boy was such a "tremendous"
experience."What did I take away from it? A challenge—that anything is possible
if you put your mind to it. That nothing comes easy in life [and the importance
of] teamwork."The best part of school in England was that it exposed you to
lots of everything—different experiences. It brought your personality out."Not
that life in 1970s Britain was idyllic. Irked at not being invited to the house
of a friend's friend, he discovered it was because it was feared he wouldn't be
"capable of using a knife and fork.""He thought we lived in a treehouse," he
says. "This was 1977 and no one knew [of] Malaysia," though he stresses such
gaucherie was the exception, not the rule.A decade ago, discontented at the
direction the music business was taking, the father of two resigned from his
well-paid executive job, remortgaged his house for $500,000 and took on the
not-inconsiderable risk of buying up a failing air carrier."I went to my boss
[at Warner Music] and quit. He was thrilled, because he always wanted to get
rid of me... because he thought I was after his job. Which I was! And I walked
out not knowing what the hell I was going to do."Mr. Fernandes, a graduate of
the London School of Economics, had been inspired to run his own airline by a
visit to Luton Airport, some 40 miles (65 kilometers) north of London, where,
by the beginning of the past decade, low-cost European air carriers were in the
ascendant."I saw Stelios [Haji-Ioannou] on TV talking about [his British
low-cost airline] EasyJet. So I went to Luton and I saw people flying to
Barcelona for £6 and Paris for £9. Everything was orange. I thought: 'This is
great!'"He credits his mother, Ena, with teaching him the art of selling and
introducing him to the romance of flying. A frequent flier, she would be met on
her return by five-year-old Tony and his father, a doctor."My love for planes
started there," he says. "Me and my dad would go to the airport really early.
We were early plane-spotters."Decades later, Mr. Fernandes and his business
partner Kamarudin Meranun founded Tune Air Sdn. Bhd., inking the deal for
AirAsia within weeks of 9/11, an event that led to the collapse of several
major airlines. It was a terrific risk. "There is a very fine line between
brilliance and stupidity," Mr. Fernandes concedes. "'You idiot, you gave such a
great job away to start an airline.' If it failed a lot of people would have
said that, right? But I [had] reached a point and maybe Epsom taught me that
you only live once. And if you don't try, you don't know."The airline was an
immediate hit with passengers and, in 2004, it became a publicly listed company
after a Malaysian initial public offering. Between 2007 and 2011 it has won
travel consultancy Skytrax's best low-cost airline award four times.Mr.
Fernandes has now taken the low-fares model into accommodation, forming Tune
Hotels in 2007. With 14 hotels in Asia and Europe, it plans to reach 100 hotels
world-wide by 2016.In 2010, Mr. Fernandes indulged his love of sport by
branching off into Formula 1, under the name Team Lotus (now called Caterham
for the 2012 season), of which he is team principal.
He is awaiting "payment"
from a wager with Richard Branson, a new F1 team principal himself, for whom
Mr. Fernandes briefly worked in the 1980s as an auditor at Virgin.The two F1
newcomers had a bet on which team would finish higher. Mr. Branson lost. The
penalty? To work in a female flight attendant's uniform for a day on the
winner's airline.This year, Mr. Fernandes took on a higher-stakes gamble,
returning full circle to the U.K. to take a majority stake in QPR, a club that
returned to the English Premier League after a 15-year hiatus.As the chairman
of QPR Holdings Ltd., he is the public face of a consortium that took a 66%
share in the club. The remaining third is held by the family of London-based
Indian steel magnate Lakshmi Mittal.The former music executive in Mr. Fernandes
comes out when he describes the marketing potential of the EPL. "English
football is massive," he says. "There is only one way that it's going to go.
And that's upward."And he hasn't been afraid to take tough decisions. In
January, he sacked Neil Warnock, the manager who brought the club back into
English football's top flight, but who had failed to arrest an alarming slide
down the EPL table.Mr. Fernandes took to Twitter to communicate his move,
telling shocked fans that it had been a "very, very hard decision."Since this
interview, the QPR chairman has also had to use his experience to contend with
a high-profile race incident. In a game with Chelsea, Anton Ferdinand, a player
Mr. Ferdinand bought last summer, was allegedly racially abused by John
Terry.Mr. Terry, 31, denies the charge and will appear in court in July. The
case itself indirectly brought about the resignation of the England soccer
manager. Fabio Capello stepped down this month after the Football Association,
the game's governing body, stripped Mr. Terry of the England captaincy.In a
statement issued after the original incident in October, Mr. Fernandes said the
club didn't condone racism in any shape or form, but wouldn't be making any
further comment on the matter at that stage.Clearly, QPR has taken up a huge
amount of time and energy. But life in the Premier League hasn't dulled his
enthusiasm for business. Asked about his recipe for success, he replies: "I
honestly believe the first thing in business is: can you make something that
people want? Cheap travel in Asia is a no-brainer.""How do you build a
competitive business? Whether it's Lotus, whether it's QPR, whether it's Tune
Hotels…build a business that people want. Have the right people. Be focused and
allow people to get on and do their jobs. Give them a strategy, but allow them
to go and do it."The very last thing, which I think is the most important, is:
people have simply got to enjoy coming into work."JOIN THE DISCUSSIONBe the
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