SEPANG: Excerpts from the second part of the interview with AirAsia group chief executive officer (CEO) and co-founder Tan Sri Tony Fernandes.
Q: How is your love-hate relationship with Malaysia Airlines?
A: I don’t know if we ever loved each other.
Q: Technically, they are smaller than AirAsia now, isn’t it?
Answer: Yes, they’re smaller. I think (outgoing Malaysia Airlines CEO) Christoph Mueller was great. I think it’s the first time I’ve seen Malaysia Airlines trying to make money, which is great. I want a strong Malaysia Airlines, contrary to what everyone thinks. A strong Malaysia Airlines means no more subsidies and you run your business properly.
I think Malaysia Airlines is finally doing the right thing. I praised them the other day for their business-class seat. That was very good. I think they have cut capacity in the right places.
The tie-up with Emirates makes sense. So they’re doing all the things that actually I wanted to do when we owned it for a short period. But it was shot down by politicians and unions and all that.
Malaysia Airlines is a great brand. Half the staff here are from Malaysia Airlines. There are good people there. It’s all about giving them the chance to be good people.
I think they have to continue doing what they are doing. They are doing the right thing. Otherwise, that airline is gone forever. This is the last chance because Emirates and everyone else is getting stronger.
You have to define what your market is. As an Asean person, I can tell you Malaysia Airlines is now behind Garuda Indonesia, Thai (Airways) International, Singapore Airlines.
If I look at all the airlines in Asean, they’ve all put proper CEOs in there. They’re all trying to make money. Garuda is making money and doing a good job. Thai Airways has a very smart CEO in there from investment banking. He’s cut a lot of capacity, etc. He’s a very good guy.
PAL (Philippine Airlines) is making money, record profits. Even Royal Brunei Airlines is doing better and Vietnam Airlines is a good airline as well.
So Malaysia Airlines… if it doesn’t sort itself out… It’s the last chance.
Q: You posted in your Instagram recently that you went to a job-opening booth at Malaysia Airlines.
A: Oh yes, we must have humour. At the Graduan festival, they had a big booth. Actually, that surprised me because they just made so many people redundant and then they had a huge booth at the Graduan thing.
So just for fun, I went there and said I’ve come to apply for the CEO’s job. We got to have fun.
Nowadays I could do that. Maybe five years ago, they would have put a few knives into me if I went to the Malaysia Airlines booth.
So the relationship is much better and I think that is how it should be.
Just for the record, I have the Garuda CEO coming to see me. We have a great relationship with Garuda. We’re looking at doing some stuff together with Thai Airways and Philippine Airlines as well. Singapore Airlines, I don’t have any relationship with.
At the end of the day, competition is competition. But we are all in the same industry and we should help each other where we can.
Q: What are your thoughts on Value Alliance? Are you in or are you out?
A: We have not been invited. But even if we were, we would not be in. It’s a mess. It’s a Singaporean-led desperate attempt to try and compete with AirAsia and AirAsia X and Jetstar.
If you look at Emirates, they have no alliance. They’re not part of oneworld. Strong airlines don’t need it because it’s complicated.
If you want to fly from Tokyo to Penang on Value Alliance, you need to take about four different airlines. You got to go to Hong Kong, Hong Kong to Singapore, Singapore to Penang.
While on AirAsia X, you just go to Tokyo-KL-Penang. It’s a one-stop scenario.
If there was common ownership, then Value Alliance could be something. That’s what we are proposing to have — common ownership.
Banks can own 100 per cent. Telekom Axiata can own 100 per cent in Indonesia.
Why can’t airlines in Asean own each other? Actually, maybe it’s time for some mergers. Maybe it’ll be tough for me, but if the competition is good, if I’m not good enough, then I should not be here.
Honestly, to restart MSA (Malaysia-Singapore Airlines) makes a lot of sense. I grew up with MSA. It makes a lot of sense for Malaysia Airlines and Singapore Airlines to merge, in my opinion.
Does Asean need 10 airlines? If you look at Europe now, many airlines are merging. British Airways owns Iberia, bought Aer Lingus, Air France-KLM. There’s more of it happening.
We have been pushing for common ownership. Lion Air has Malindo Air, Thai Lion. VietJet has an airline in Thailand. It’s time for Asean to start allowing Asean airlines, common ownership, and better use of capital.
Value Alliance is… Competition is good, it makes us better. But I think it’s going to be tough.
Q: Because national pride comes first before anything?
A: That’s what I don’t understand. It is one of the most bizarre things in my 14 years I have seen… that the flag carrier is almost as big as the flag.
Now mature countries have changed that. If you think about it, what is the flag carrier of America?
You don’t know, right? Pan America maybe, but now American, United, Delta, etc.
Is there a flag carrier bank from Malaysia? Not really. There are CIMB, Maybank, Public Bank, etc.
Is there a flag carrier telecoms company? Not really. There are Maxis, Digi, Celcom, all have their own markets.
So I don’t understand why everyone is so hard-up on national carriers. Does a country need a national carrier? That’s the question I ask.
Malaysia Airports Holdings Bhd (MAHB) can own an airport in Turkey 100 per cent. Chinese airports can buy Frankfurt airport, they are looking at negotiating. Heathrow is owned by my friend. He is a Spanish guy. So why are airlines like this?
Q: In fact, you can run an airport in Indonesia, right?
A: Yes. Thailand is asking us to invest in another airport in Phuket.
I think airline rules are outdated, and it’s time to look at mergers, and it’s time to look at different ownership. The World Economic Forum did a paper actually. It was coincidental how airline ownership kills jobs. But by changing the rules, you create so many more jobs.
Q: If they can have high-speed rail between two countries on a shared ownership, they can also do the same thing with airlines?
A: Exactly. Contrary to what everyone thinks, the high-speed rail is great. People said your KL-Singapore (AirAsia route) will be killed. I don’t think so.
Q: Actually it will benefit?
A: One hundred per cent. I think some Singaporeans will come up and use us to fly on AirAsia X. Anything that spurs economic growth is good and we should encourage it. A high-speed rail will make KL and Singapore closer, will get more business jobs, will be better for regional offices, etc. More people in Singapore may even live in KL or along the way.
Anything that facilitates travel, we should encourage. Anything that facilitates ease of movement, we should facilitate.
Visa is outdated. Why does Malaysia not have electronic visa? Why don’t we have an Asean visa? We sit on the border of two biggest countries in the world — India and China.
If they want to come to Asean, they need 10 visas. We are making it hard. We should have a Schengen visa like Europe.
I know eight countries want to do it and two countries don’t. So I’ve been advocating Asean mindedness. Forget the two countries. If eight want to do it, then start with eight. I’m sure the two countries will come very soon.
So Asean should forget about doing all 10. If you had 10 wives and you try to arrange one dinner, it’d be a nightmare, right?
Q: Going back to your relationship with MAHB. Why do you think there is tension between MAHB and AirAsia?
A: I think the fundamental reason is different priorities. They don’t understand low cost. They want everything to be RM65 and they have the ears of the government, which we don’t. So they get a lot of things pushed through.
So, of course it’s easy to make us the bad boys and push through what they want to do. It’ll be a new fight between us.
We are looking at Airbus A321, which is a much larger plane. It has about 15 more seats. Fantastic plane.
Now you cannot board 240 passengers from an aerobridge in 25 minutes. You cannot do it.
I have a house in Scotland. I went there the other day on British Airways and I saw I could take the steps down and the front was an aerobridge.
And I thought, if British airports can allow people to take steps and then I started investigating with Airbus, most airports in the world allow it.
So if I’m the airport and I say look, here is your aerobridge and I can bring 50 more passengers in 25 minutes but I need a step at the back of the plane and a step at the front.
Already Chinese airports are supporting us on that. Because you’re bringing in 20 per cent more passengers using the same time slot, we’re using our assets better.
I assumed MAHB will support us, but I don’t know whether they will.
It’s been different priorities. We wanted a simple facility but they build this (klia2). We said, ‘Don’t spend so much money, spend less. Get a better return on your capital.’
Why spend RM5 billion when the customer… You’re building a house or a hotel and you’re going to be the tenant. So your architect builds something five times more than what you want. Why?
We are 98 per cent of the customer. We said, ‘Why do you need a third runway? Heathrow has doubled the passengers and has two runways. Why build a third runway?’
Q: What’s your vision and mission for AirAsia X?
A: My ultimate dream is that AirAsia X flies to every continent. They started to fly to Africa, they are obviously in China. At some point we will go back to Europe. They have applied for Hawaii, that’s America. It only leaves South America.
I’ve always said I would retire when AirAsia X goes to Rio and me and (AirAsia co-founder Datuk) Kamarudin (Meranun) can kick a football on the Copacabana beach. Then our dream will be met that we have gone to every continent in the world.
The route I know is very clear. We can go KL-Lisbon, Lisbon-Rio. It would have been great if it could be done this year with the World Cup and the Olympics coming up but that’s not going to happen.
So that would be my dream. And then we have passengers from all over the world filtering through KL to go out to Asia.
Q: What can be done to further enhance the flying experience?
A: Number one, the check-in experience. I really want to have bag drop, etc. Technology can really aid experience.
Two, we are going to put Wifi on the plane. Now people cannot live without connectivity and we are using a lot of data to understand the consumer more. We give you what you want. So, we will know you like nasi lemak, you like this seat.
Very soon, all our crew will know you by name. So we want to make it a very personal experience. We will know you like to go to beaches, so we will give you special offers. We know you travel with your family, so we can give you insurance a little bit cheaper.
So data is going to be big for flying… But really I think the worst thing about flying is the check-in experience and security.