Recently, AirAsia CEO Tony Fernandes who is one of the best-known names in global aviation revealed in an interview with Bloomberg that he is ready to move on and step down.
“Good leadership is to know when to go. Aviation as my journey might be coming to an end,” he stated.
Fernandes, whose name is synonymous with cheap flights and revolutionising the world of budget airlines, shared that he plans to focus more on areas such as health, education, and private equity.
“I like private equity with an active management and helping young people change things. I believe there’s a low-cost model for education and health. These are the two things that discriminate people the most,” he told Bloomberg.
With his upcoming resignation, we thought it would be appropriate to take a look back at his rollercoaster of a journey as an entrepreneur with major interests in football, motor racing, and hospitality.
Fernandes grew up in Malaysia and the UK, where he graduated with a degree in accounting from the London School of Economics.
After working as a financial controller at Richard Branson’s Virgin Media Communications Ltd. in London, he moved back to Kuala Lumpur in 1992 to become the general manager of Warner Music Malaysia.
It was reported that he first sensed an opportunity in aviation while sitting in a London bar watching EasyJet Plc’s Stelios Haji-Ioannou speaking on television about low-cost flying.
Based on that opportunity, he went on to mortgage his home in 2001 to establish Tune Air Sdn Bhd with his partners.
He then used that entity to take over AirAsia, which was formerly owned by a local government-owned conglomerate and had debts amounting to US$11 million, for the equivalent of RM1 at the time.
After starting out with just two planes, AirAsia rebranded as a low-cost carrier in January 2002, offering flights in Malaysia for as little as US$3, and in some promotional cases even for free.
With the motto “Now Everyone Can Fly,” Fernandes’ revival of AirAsia helped to supercharge a boom in flying in South-east Asia and at its peak, was the fourth-largest airline in Asia.
Back to earth
With AirAsia finding much success since he acquired it, Fernandes began looking beyond the airline and in 2007, he began the Tune Hotels chain.
This was in hopes of bringing the low-cost strategy to the hotel industry with properties across Malaysia, and other countries such as Kenya, the United Kingdom, and Australia.
The idea behind it was that budget fliers needed a budget place to stay and so the brand was billed as “five-star rooms at one-star prices”.
However, it was announced in 2018 that the Tune Hotels are no longer managed by Tune Group and are currently under the management of Ormond Group.
The fast life
Another one of Fernandes’ most notable ventures include his entry into Formula 1.
In 2009, Fernandes’ Tune Group bought Team Lotus, setting off a legal fight over naming rights with a separate team called Lotus Cars, before he bought Caterham Cars and renamed his team after the sports car manufacturer.
Due to two seasons with no points in the Championship and its drivers finishing no higher than 11th place, with the team at the bottom of the F1 constructors’ championship, Lotus sold its entry.
Fernandes vented his frustration before the start of the season, saying this was the final chance for the team to break through in F1 and that there was a limit to his patience, motivation, and investment.
It was reported that he had become frustrated by F1 and the cost burden on team owners and had even posted on his Twitter account saying, “F1 hasn’t worked”.
But Caterham, Fernandes’ company, continued in GP2 (now F2) instead until 2014.
While his stint in F1 was short-lived, Fernandes did buy Caterham Cars in 2011 and held it until 2021, when the pandemic saw a sale of non-core assets.
Life’s a pitch
Following his foray into the F1, Fernandes who is a lifelong West Ham United F.C. fan finally achieved his dream of owning a football club in England.
Although he failed to buy West Ham in 2011, his entry into the football league came in the form of buying a 66% stake in London-based Queens Park Rangers (QPR) for around £35 million.
“I’ve always wanted to be involved in football and the appeal of a London club like QPR was too good an opportunity to turn down,” Fernandes said.
“QPR is a raw diamond and hopefully I can contribute to turning it into a diamond. I want the fans to be proud of what we’re doing and be involved as much as we can.”
The club which had just attained promotion to the top league that year attracted much attention, bringing Fernandes into the spotlight.
Fernandes started serving as chairman of the club in 2011, a position that saw him make key managerial decisions based on the club’s performance. He was also often spotted in London to attend QPR matches.
In 2014, following the club’s bad run of results, Fernandes said that he would resign if the supporters wanted him out, and insisted “a good leader knows when to go”.
He later stepped down in 2018 to focus on his core businesses and hand over control.
Despite the ups and downs he experienced while serving as a chairman of the club, Fernandes remains loyal to QPR and is sometimes spotted at matches.
Handing over the reins
In 2022, while the airline still operated under the AirAsia brand, Fernandes revamped the business and changed its name to Capital A Bhd, which operates a super app that can be used to book tickets, hotels, taxis, and food, as well as offering fintech services.
Fernandes has said the rebranding better reflects the group’s status as an investment holding company with interests in travel and lifestyle, and helps outline that it isn’t “just an airline anymore.”
Capital A expects non-airline operations to account for about 50% of total group revenue by 2026, which paves the way for Fernandes to leave AirAsia in the hands of a successor and shift into other areas of business.
What’s assured is that the serial entrepreneur will be keeping himself busy. “I’ll never not do anything. I’ll always do something.”
In terms of his successor, Fernandes stated that he would prefer someone from within the company and Southeast Asia, though he didn’t rule anything out.
“I’ve got to talk about succession planning. Exactly when I press the button, I don’t know, but I want to talk about it because I want to attract the right leaders,” he told Bloomberg.
“Honestly, I don’t care where they are from. We don’t really talk about race, religion, sex, sexual orientation — I don’t care, as long as you can do the job,” he explained.
Having steered AirAsia through the last 21 years filled with ups and downs, it will be interesting to see what Fernandes ends up doing next.
- Read other articles we’ve written about Malaysian entrepreneurs here.
Featured Image Credit: Tony Fernandes/Instagram & QPR/Flickr & Tune Hotels/Flickr & Steven Tee/Flickr