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Tony Fernandes, Group CEO, AirAsia
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Earning His Wings
AirAsia Group CEO Tony Fernandes on building a great company culture, and a multi-billion-dollar business
Tony Fernandes has worn many hats over the course of his decades-long career. And if the Group CEO of AirAsia (and former host of The Apprentice Asia) ever finds himself dissatisfied with a signature look, he’ll just invent a new one.
“You have to keep renewing yourself,” Fernandes says. “You’re only as good as tomorrow.”
That philosophy undergirds Fernandes’s entire career trajectory. Before starting what is now one of the world’s most successful budget airlines, Fernandes was an accountant, working briefly for the likes of Virgin Atlantic and Virgin Communications. He then reinvented himself within the music business, where he served as a Warner Music executive in Malaysia.
Fernandes’s latest reinvention is his biggest, and most complex. He’s the co-founder and Chairman of Tune Group, a conglomerate of hotel, automotive, financial services, education, media, and telecommunications industries subsidiaries. And he sits at the helm of AirAsia, a budget, no-frills airline that has revolutionized travel in Southeast Asia. After purchasing the then-bankrupt airline for a shocking 24 U.S. cents, Fernandes has grown the brand to a net worth of more than $1.5 billion. AirAsia is now the fourth-largest airline in Asia, behind only the big Chinese carriers (in 2017, AirAsia flew over 90 million passengers), and it recently embarked on an ambitious program that will see the airline transform itself into a travel technology company.
To hear Fernandes tell it, two primary factors differentiate AirAsia from other companies. For starters, the company has always embraced digitization. And secondly, the organization is built on inclusivity and creating a fantastic work culture. Here’s how Fernandes has leveraged those strengths to build a company that no one thought possible.
Pursuing a Childhood Dream
In 2001, during Fernandes’s more than decade-long stint in the music business, digital advancements began to threaten deeply entrenched industry norms. Fernandes spotted an opportunity, but his colleagues weren’t so keen on the digital revolution.
“Napster had come along and Spotify was just starting, and I thought, ‘Wow, this is super exciting for the music industry,’” Fernandes says. “But I was a lone voice.”
No one at Warner Music or Time Warner Inc. (where Fernandes was working at the time) thought it was a good idea. “They thought the internet would destroy music,” Fernandes says. “My premise was that we can’t hold technology back and that this was a fantastic distribution model to create more revenue.”
But his vision didn’t gain traction, and when Time Warner merged with AOL, he decided to bid adieu to his music industry career.
He was sitting in a bar in London, trying to figure out what to do next with his life, when he saw mention of the budget airline easyJet on the pub’s TV. Fernandes instantly recalled his childhood love of planes.
“Always from a very young age, I’d told my dad, ‘I’m gonna own an airline one day,’” he says. “That’s one of those things you say, but you’re not entirely sure you’re gonna do. But I always said it. And so I thought, ‘Well, this could be the time.’”
It might seem like a bold move for a music industry exec to presume he could run an airline, but Fernandes was motivated by one simple premise: YOLO.
“I thought… ‘You only live once,’” he says. “If I fail, I fail. It’s okay. I’ll go get a job doing something else. But I don’t want to sit there at 55 and say, ‘I wish I did it.’”
Fernandes’s idea gained further traction after he started studying the models of low-cost airlines such as RyanAir. (RyanAir’s then-Director of Group Operations would later become a shareholder of Fernandes’s airline.) Inspired by what he refers to as an “amazing concept,” Fernandes gathered up some partners and returned to Malaysia for a meeting with the Prime Minister.
The Prime Minister agreed to let Fernandes and his partners into the airline industry, but only if they purchased an existing airline. As a result of some devastating circumstances, there were a lot of opportunities. Fernandes was looking to purchase an airline around the time of the September 11, 2001 terrorist attacks, which had sent the industry reeling. He ended up purchasing AirAsia, a Malaysian government-owned airline that was $11 million in debt, for a grand total of 24 U.S. cents.
Driving Growth
After purchasing AirAsia, Fernandes knew he had to move fast. “It was very clear to me once we started moving that…I was going to put the foot to the accelerator because there were some big around me,” Fernandes says. “When you have something, scaling up is important.”
Luckily, Fernandes spotted multiple avenues for growth.
For starters, he knew that at the time he acquired AirAsia, only 6 percent of Malaysians flew. If he could capture even a portion of the other 94 percent, he’d be in business. What’s more, he was willing to fly to places that most airlines didn’t go. “A lot of our growth has come from destinations that no one did before,” he says.
But perhaps AirAsia’s biggest differentiator was its use of the internet at a time when, globally, many still weren’t online. “Back in 2001, most people didn’t even have internet yet,” Fernandes says. “But I said, ‘Trust me, when I put a fare at 2 dollars, people are going to find their way to the internet.’” Since then, AirAsia has been religious about tracking and keeping data. So when huge brands started to embrace digitization many years later, they were already ahead of the game.
Still, Fernandes knew he was at a disadvantage, due to his lack of industry knowledge, so he accelerated his learning to ensure he could continue AirAsia’s rapid growth. He sat down with engineers, pilots, simulators, and cabin crews; learned how to change a wheel; and generally threw himself into understanding the intricate workings of planes and airlines. “I was a sponge,” Fernandes says. “I took everything in.”
A strong focus on innovation, learning, and growth helped Fernandes and his team make up for what they lacked in capital.
“Let’s be real, three guys from the music business coming in to start an airline is not the most convincing business ,” Fernandes says. “No bank gave me a cup of coffee. Did we want capital? Of course. But we didn’t have it. But again…we built a massive airline with very little capital.”
In fact, AirAsia only raised one round—$30 million around year three—before launching its initial public offering (IPO). “I’m old-fashioned in that aspect,” Fernandes says. “I believe in cash. I believe in making some profit. If you have a model where you can make money, make money. And of course reinvest some of that money, which we did.”
Much of that money went into flying to new places. “The product was going places that no one else wanted to go,” Fernandes says. “We couldn’t stand still… kept adding routes and new destinations.”
While the airline continues to add new destinations, today it’s equally focused on developing a multi-pronged digital strategy. The organization is digitizing all of its processes to enhance efficiency and the customer experience. It’s also attempting to create a comprehensive travel ecosystem that will enable users to book train tickets, purchase concert or other event tickets, use financial services, and so on, all from one central hub.
“We’re using and building platforms that will provide more value to my customers…and it’s an exciting vision,” Fernandes says. “There’s a huge potential if we can execute well.”
That execution hinges on a top-notch team working cohesively and effectively. Luckily, Fernandes has been building that since day one.
Building a Dynamite Culture
“Culture is, I think, the most important thing in the success of AirAsia,” Fernandes says.
Fundamental to that culture is a bedrock of transparency and trust—even among 24,000 staff. “It is by complete choice that we’re open plan,” Fernandes says. “When you have an office, you have all these invisible walls. … So one day I just came in and smashed all the offices. I brought a contractor in and just tore them all down. And we’ve been open-plan ever since.”
In keeping with the open office concept, AirAsia also employs a fairly flat organizational structure. “I like to think we utilize everyone’s brain,” Fernandes says. “We put everyone…in the same building. Everyone eats in the same place, everyone goes to the same gym. I want people who believe they can do a lot more and grow in this company.”
This spirit of inclusivity extends to diversity. “We embrace diversity,” Fernandes says. “We don’t care what race, creed, color, sexual orientation you are. And I think that’s a strength. Because that gives us a huge diversity in our workplace, and a huge ability to attract great talent and great ideas. … I wanna have a fantastic, multi-ethnic, diverse company, and I think we’re not far from that.”
Of course, when you’re dealing with a team of 24,000 people, it’s easy for bureaucracy to rear its ugly head. “We got big, and politics and bureaucracy creep in,” Fernandes says. “But it’s not something I’m gonna run away from. I confront it because bureaucracy and politics is the cancer of any organization”
One strategy the team uses to confront bureaucracy is simply having fun. “I think too many business leaders take life too seriously,” Fernandes says. “Too many entrepreneurs get too stressed. Have a balance. You don’t have to work 18 hours a day. Make sure you give time to your family and your kids and your friends.”
In Fernandes’s view, this juggling act is worth it in pursuit of building a great team. “You’ve gotta surround yourself with good people, and you’ve gotta be prepared to listen,” he says. “Too many founder CEOs think they know it all. … You can have all the ideas you want in the world, but the execution is what it’s about, and you need a good team.”
Luckily, developing a great team has always been fundamental to Fernandes’s vision for AirAsia.
“My vision was to create a great place to work—a fair place to work, where it didn’t matter whether you…had money or a great education, but if you had a great brain and you had the will and belief, you could achieve anything in this airline,” he says. “To turn a raw diamond into a diamond—and we have so many of those. … If you really push me, it’s allowing a lot of my staff to live their dreams—that would be something I’d be most proud about.”
That spirit of affirmation and inclusivity extends from AirAsia’s team members to its customers. In spite of the many ways that Fernandes and his airline have reinvented themselves over the years, the company’s slogan has remained the same since Fernandes first developed his vision all those years ago: Now everyone can fly.
5 Mini-Lessons in Entrepreneurship from Tony Fernandes
- Spend Money on Branding and PR
“Great ideas are great ideas…only people know about them,” Fernandes says. “Too many businesses don’t spend enough on branding and marketing. Keep a budget for that.”
- Always Be Reinventing
“The world is littered with products that didn’t reinvent themselves,” Fernandes says. For example, he references Nokia. “Who believe a world without Nokia phones? They were it.” Today, of course, the phone landscape is very different.
- Balance Focus With Innovation.
“You have to live within your means and live within your resources,” Fernandes concedes. “But you also can’t stand still. It’s a balance. But life is a balance. Everything you do is a balance.”
- Don’t Worry so Much About Failure
“Failure doesn’t worry me, because I’d rather fail than not try at all,” Fernandes says. “Many people are too worried about failing, so they don’t do anything. I’ve had many failures… I don’t have any regrets, because if I didn’t try I didn’t know.”
- Go With Your Gut
“You can do all the marketing research you want,” Fernandes says. “You just gotta go with your heart sometimes and do it.”
Key Takeaways
- Tony’s background in the music industry and how he wound up interested in airlines
- The wild story behind how he purchased AirAsia for 30 Australian cents
- The fundamental growth strategies he used on AirAsia
- His thoughts on funding
- AirAsia’s digital strategy
- On expanding your product line and trusting your gut
- AirAsia’s culture and why he thinks it’s the single most important factor in their success
- His advice on building a founding team
- How he came to host The Apprentice Asia
- His thoughts on personal branding as a CEO or founder
- How he views failure
Full Transcript of Podcast with Tony Fernandes
Nathan: Hey, guys. Nathan Chan here, CEO of Foundr Magazine. Today, I’m in the AirAsia office in Kuala Lumpur, their HQ, and I’m speaking to Tony Fernandes, the AirAsia Group CEO, and we’re gonna find out how the hell did he start this thing. Tony, thanks so much for taking the time.
Tony: Pleasure. Thanks for coming into our office.
Nathan: Thank you for having us. The first question that I ask everyone that comes on is how did you get your job?
Tony: My first job?
Nathan: Just how did you find yourself doing the work you’re doing today?
Tony: Oh, today. Wow. Well, I was in the music business for 12 years. I was an accountant before that. It was in 2001, it was the beginning of this digital age. Napster had come along, and Spotify was just starting. I thought “Wow, this is super exciting for the music industry,” but I was a lone voice. No one at Warner Music or Time Warner, which became AOL, which was an internet company, thought it was a good idea. They thought the internet would destroy music.
My premise, which was that you can’t hold technology back and that this was a fantastic distribution model to create more revenue. I was a lone voice as I said early, so I decided that, cutting a long story short, I was also against the AOL merger, and I just quit in New York. I flew to London, sitting at a bar having some alcohol thinking about what I’m gonna do for the rest of my life. Should I set up Foundr Magazine, or should I become an accountant again, or should I start my own record label? Right? While I was there I saw Stelios, who owns an airline called easyJet in the UK. I didn’t see him. I saw on TV.
Nathan: Yup.
Tony: I always liked planes. I always, from a very, very young age, I told my dad I’m going to own an airline one day. That’s one those things you say that you’re not entirely convinced you’re going to do, but I said it. I thought, “Well, this could be the time that when I told my father when I was five years old I’m going to start an airline.” I took a bus from … I was in a pub in Hampstead up to Luton Airport and was blown away. People were flying to Barcelona for £8 to Paris for £6. Everything was orange, and I had never heard of a low-cost airline route. What an amazing concept!
It was a very fine line between brilliance and stupidity. It’s very narrow. I thought, “I’m going to do this. You only live once. If I fail, I fail. It’s okay. I’ll go get a job doing something else,” but I didn’t want to sit there at 55 and say, “I wish I did it.” I came back to Malaysia, got a meeting to see the prime minister along with a couple of my other partners. He gave his blessing, but he said, “No new licence. You got to go buy an airline,” which is the best thing ever because we had no money to start an airline anyway. We ended up buying AirAsia three days before 9/11 for one ringgit which is about 30 Australian cents and about 10 million or debt.
On December the 8th 2001, we took over AirAsia with 265 terrified staff because they only seen me on music TV shows and now, as the owner of their airline. I’m taking over from a very large company in Malaysia which made cars and all kinds of things. I think there was a lot of nerves with, “Who is this character?” Going from a very solid base, we’re not doing anything, we’re not making any money, but we’re getting paid every month to some guy who’s got no experience in the airline business, no money, and I think they were very nervous, but we’ve had a great run since then.
Nathan: Yeah, so talk to me around what has been some of the fundamental growth strategies that you’ve been able to apply? In 2017, you flew over 70 million passengers.
Tony: Yeah.
Nathan: Yeah.
Tony: Actually, we’ll do 90 as a group, which to me, I mean, the fourth largest airline in Asia. Only the Chinese airlines are bigger, but they have an inherent advantage of 1.3 billion people in their country. That’s a slight advantage, but yeah, I mean, I think two bits to growth, which I think may be useful to your listeners, which is not directly answering your question, but the first thing is growth is critical in a startup because ideas are never exclusive. You can’t patent everything. Right? Anyway, this is not my idea. It came from Southwest and Ryanair and easyJet.
It was very clear to me, once we started moving, that this wasn’t something I was going to pussyfoot around. I had to put the foot in the accelerator because there were some big mamas around me in SIA and Malaysia who could replicate this model and put us out of business. While it’s not answering your question directly, I think it’s useful for your viewers that when you have something, scaling up is important. The way that I see the growth, there was one figure that hit me when I started this airline. Only 6% of Malaysians flew. I’m trying to market the 94% apart from the 6% who may have flown once a year or once every two year. Right?
The second was I saw a fantastic market which no one else saw, which was Southeast Asia, ASEAN, everyone was fixated by China and India, and I was like, “Well, we got 700 million people here.” That’s where I predicated my story around, and from very early days, I talked about, “ASEAN, ASEAN, ASEAN,” and a lot of our growth has come from destinations that no one did before.
Nathan: I see. When you took over the company, you didn’t know anything about-
Tony: Zero. Only stewardesses.
Nathan: Did you look at companies like Southwest and-
Tony: Yeah, 100%.
Nathan: You’re like, “This is a good market.”
Tony: Yeah. Well, easyJet was the first start.
Nathan: Yup.
Tony: Then I, through my music context.
Nathan: Yeah.
Tony: I know U2 very well, and they mentioned Ryanair to me. Edge mentioned Ryanair to me, and I went over to Dublin, stayed in their hotel, The Clarence Hotel, and flew Ryanair, and I thought, “This is an even better model.”
Nathan: Yeah.
Tony: I had bought Herb Kelleher’s book. Those were the three inspirations. I never read books. This was the only book I ever had read since Wilbur Smith and Jeffrey Archer when I was 15 and coupled with flying on Ryanair, which I thought was and incredible model, and obviously, easyJet.
Nathan: How did you learn? Did you have mentors or anyone that-\
Tony: Well, I had … Well, you learn … The ability to learn is the ability for you to want to learn, so I really threw myself in. Right? I mean, I was sitting with engineers. I was sitting with pilots. I went to simulators. I learned how to change a wheel. I hang out with cabin crew. I was a sponge.
Nathan: Yeah.
Tony: I took everything in, but look, I had a great mentor Conor McCarthy who was COO of Ryanair, and had left to set up his consultancy and GE Capital had introduced me to him. He was a fantastic teacher, mentor. Less a mentor, more a teacher in terms of giving me the model and a fantastic partner. He became a shareholder in AirAsia.
Nathan: Yup. To fuel growth, you talked about when you’re first startup, you’ve got to grow, or you’ve got to scale this thing.
Tony: Yeah.
Nathan: Have you guys accepted outside capital funding to scale?
Tony: No, we didn’t. I mean, when you look at today and you see some of these business models, I mean, let’s be real. Right? Three guys from the music business coming to start an airline, it’s not the most convincing business case. Right? I was involved with rooArt and Wendy Matthews and INXS and Crowded House and suddenly, I’m talking about airline. No bank gave me a cup of coffee. Do we want capital? Of course, but we didn’t have it. Again, that should be a motivational to any of your listeners that we built a massive airline with very little capital. Right?
Now, when you look at all these unicorns now, look at Grab, I was with Anthony Tan yesterday. It’s raised 6.8 billion. I mean, that’s more than my market cap right now. We did one $30 million after about three years, and then we did the IPO. That’s it. We never raised capital since then.
Nathan: Do you think that startups should look more to self-fund and just sacrifice profit for growth?
Tony: Yeah. I’m old-fashioned in that aspect. This new business model is subsidised growth. Right? You give away things to build up customers. We’re going into that model with some of our digital ventures, but we have customers from AirAsia. I’m an old-fashioned guy. I believe in cash. I believe in makings and profits. Right?
Nathan: Yeah.
Tony: I don’t understand some of these tech models. Obviously, a lot of them have gone onto great things like Amazon, et cetera, but I sit there and look at some of these food delivery services and look at their valuations. I think, “Wow,” it’s scary because where is the profitability coming from, and yet people are throwing money at it, crazy. If you have a model that you can make money, make money. Of course, reinvest some of that money, which we did.
Nathan: Yeah.
Tony: We reinvest in building an academy because you can have all the metal you want, but if you don’t have the right people, then forget it. We reinvested in sponsoring to make our brand bigger, et cetera. It’s not always about outside capital, but build a business that’s robust and can stand on its own two feet without outside funding.
Nathan: Talk to me about the digital side you guys are starting to kind of go vertical and look at your existing customer base and how you can further serve them.
Tony: Yeah. I mean, there’s two parts to this digital strategy. One is digitising everything that’s in our company. Right? We can make processes and make it more efficient to work here and digitise it so our passengers have a better experience.
Nathan: Yeah.
Tony: The third part of this digital strategy is to develop new business using the data and creating a travel ecosystem that people would use us for things that they may have used other people for, whether it’s booking train tickets when you arrive in Melbourne, or a concert ticket, or having financial services, foreign exchange, et cetera. We’re using and building platforms that will provide more value to my customer, not necessarily linked to the airline, but linked to the travel ecosystem. It’s exciting vision. Implementation is … It’s easier to talk an idea. I rather do it, and then talk about, but there’s a huge potential if we can execute well.
Nathan: You guys are spending a significant amount of improving and digitising internally here and then turning that cost centre into a profit centre by using that.
Tony: Correct. Correct.
Nathan: Yes.
Tony: Yeah, the first thing is to get the data right. We spent over the last two years with Palantir and Google getting all the data right, and then we start using that data now. It’s a phenomenal time to start a business and be in business. The cost of entering a business has come down so radically with digital tools.
Nathan: Yeah.
Tony: Even in old business in music, you can record an album at home now with pro tools and you own a very simple board. If you think of AirAsia, what was the chief differentiator from all the other airlines, we used the internet. Back in 2001, most people didn’t even have internet here, but I said, “Trust me, when I put a fair at $2 Australian, people are going to find their way to an internet.” I created the demand. Right?
Everyone said to me, “Ah, no one is going to use the internet.” You put it right off, and people will find a way there. I was very religious about keeping our data. I didn’t have the foresight that we’re going to have this huge data revolution, but I wanted to keep the contact with my customer.
Nathan: Yup.
Tony: I didn’t want to be a middle man. I didn’t want to have the travel agent have the relationship. I wanted to have a relationship. That’s good and bad. If you look at our Facebook, we’ll have … Nothing is bad by the way, but we have thousands of complaints there because we’re very accessible. I tell my staff, “Why are you complaining because that’s free market research. That’s telling you what’s wrong with our airline. You should be fixing those issues.” My TV screen, which is down at the moment is the complaints board because I keep telling my staff that’s free market research.
We were early into the game with data through the internet. Why I say it’s a great thing is we were seven generations ahead of Qantas and MAS and SIA who had huge legacy systems, so we could be very nimble. Again, for entrepreneurs, now, the tech world has give a huge option to start doing some great things, and coupled with … I’m going away from your question, but trying to relate into your audience. Great ideas are great ideas and they stay as great ideas until people know about them.
Too many great businesses don’t spend enough time on marketing and branding. Right? I think, keep a budget for that because the world, there’s a lot of things happening right now, and a lot of distraction points, where last time, you could just go and advertise on TV or do a newspaper interview and everyone would know about you. It’s dispersed. I see too many great companies who don’t put enough into branding and marketing.
Nathan: In the early days, what kind of percentage or split could you say? Just an estimate back in the early days-
Tony: Well, we didn’t have much money, but it’s not always about money.
Nathan: Yeah.
Tony: Where this came from was, it wasn’t my idea, but our head our marketing said, “Look, Tony, wear this cap everywhere and say controversial things and then the press will take pictures of you. Right?” I said, “Okay, that was quite easy.” It came natural to me. I’m good at pissing off people. That’s how the hate came. Right?
Nathan: Yeah.
Tony: I don’t wear it often now because everywhere I walk, someone says, “Can I have it?” It becomes costly now.” That was the simplicity of marketing. When we saw social media, we leaped on it before everyone knew what it was. We saw Facebook as enormous opportunity. I have 1.3 million followers on Twitter. I started that very early on. I thought social media was immensely … It’s not always about dollars and cents.
Nathan: Yeah.
Tony: Invariably, you do have to spend. We sponsored Manchester United when we were a tiny little brand, which was painful was I hate that football club, but you got to be a prostitute once in a while. I think PR is a great way of getting efficient brand spend. Right? I can’t remember the exact percentage, but we’re always, from a revenue standpoint, 5, 6%, but the PR value and the sponsorship value was much greater.
Nathan: I see. One thing that I’ve seen, and this is a common one across our audience, is you get one product out. It’s doing well. Right? Then how do you know when to take focus and add on another product, but focus is so key, and with the way that you guys are expanding and doing all these different things and so many opportunities to grow in Asia, how do you know which is the right ones to pursue?
Tony: You don’t, ultimately. I mean, you have so many products now, but when I first started, we had four destinations. Right? That was our product, flying to these four places. The first big decision is adding another frequency. I mean, that was a big decision. Right? Kota Kinabalu, we fly twice a day, and we were like, “Oh, third time. Can we do it?” Right?
Nathan: Yeah.
Tony: You can do all the market research you want, but you just got to go with your heart sometimes and do it right. Now, we even have 20 flights a day now.
Nathan: Yeah.
Tony: Sometimes, you can be paralysis by analysis and do too much research. You got to go with your gut sometimes. You got to keep reinventing yourself. Right? We couldn’t stand still. We kept adding routes and adding new destinations. The product, for us, was going to places that no one else wanted to go. Now, we’re doing it in Australia.
Nathan: Yeah.
Tony: We’re going to go to Avalon. Right? Most people, I don’t understand people in Melbourne because it’s like, they say it’s far away. I’m like, “Come to Jakarta.”
Nathan: I’ve never flown to Avalon.
Tony: I know. I know. You guys are spoiled. You can walk everywhere. You don’t know what traffic is like. Right?
Nathan: Yeah.
Tony: Like, “Avalon?” It’s like, wow, the way someone in Melbourne says it, it’s like in another universe. Right?
Nathan: Yeah.
Tony: I thought, “I went there. It’s like 25 minutes.” Okay. You go through a few farm fields, but we’re doing that. We’re doing that. We’re not worried about it. We’re excited about it. I know some of the guys in Australia are a bit nervous, but I think it’s going to be a big hit. Product is about doing things differently as well. It’s about reinventing yourselves. We had a product going to Melbourne, and we decided, “Well, we’re going to take that product and be more adventurous and have the ability to lower the fairs and hopefully go to the market even more by going to Avalon. You have to keep renewing yourself. The world is littered with products that didn’t reinvent themselves. Right? Blackberry, I mean, that was the king.
Nathan: Yeah.
Tony: Nokia, who can believe a world with Nokia phones? Right? They were it. I think it’s important that you keep looking, and it’s hard. You’re making good money. It’s there. It’s like, “Whoa, why do I want to take that money and reinvest?” Well, if you don’t, you die because you’re only as good as tomorrow.
Nathan: Talk to me about culture.
Tony: Sorry. Going back, it’s important. I’m also not saying that do 25,000 products. Right?
Nathan: Yeah.
Tony: Focus is key, and my life has been anything but focus in some ways, and I failed miserably. Go start a football team. Go do Formula 1, and when you try to do it yourself, it fails. Our football club is doing well now because there are other people running it as opposed to me trying to do an airline and a football club. Focus is important.
Nathan: Yeah.
Tony: It is important. You have to live within your means and live within your resources, but you also cannot stand still. There’s a balance. Life is a balance. Everything you do is a balance. Right?
Nathan: Yeah. Coming back, just talk to me about culture, your team? What are those things that you’re doing that-
Tony: It’s the most important thing in AirAsia and everyone is going to talk about it. When I say it I’m going to sound like Miss World, like Nelson Mandela or something, but it is what it is. The culture, we have 24,000 people. Alan Joyce or Robert Milton came to visit me once. They were walking around the office and pilots were coming up to me and shaking my hands and taking my picture. They were like, “Wow, this is a new experience.” I said, “What do you mean?” He said, “Your pilots actually like you. They want to kill us.” I was like, “Oh, really?”
Culture is really important. To me, we have, as I said, 24,000 staff, no unions, there’s transparency, there’s trust. It is by complete choice that we’re open plan because when you have an office, you create all these invisible walls. People say, “I have an open-door policy,” but the door is closed. Right? Some guy will say, “Well, his office is bigger, his is wider, and his faces the sun.” One day, I just came in and smashed all the offices. I brought a contractor and then just tore them all down, and then we’ve been an open plan ever since.
Culture is, I think, the single most important thing in the success of AirAsia. What is culture in AirAsia? Transparency, openness, 20,000 brains working for us as opposed to 10. Chris told me nothing about this interview. I was just commanded to come here. You’re an important magazine. They like you. They think it’s great. I came. Right? I mean, I see other CEOs will get briefing, this, that. I mean he’s basically telling me, “Hurry up with your interview. They’re waiting.” He’s pointing time. We’re fairly a flat structure in that aspect.
Nathan: Yeah.
Tony: I think most Asian companies, their top 10 decides everything, and the rest are implementers. I like to think that we utilise everyone’s brain. Teamwork is critical. It’s a problem in AirAsia because we’ve got big, and politics and bureaucracy creeps in. There’s 20 camps in Australia and only people. Trying to keep everyone together is a problem, but it’s not something I want to run away from.
Nathan: Yeah.
Tony: I confront it because bureaucracy and politics is the cancer of any organisation. We confronted. We deal with it. We have a culture department. We have lots of parties because alcohol is a great leveller in bringing everyone together. We put everyone in the same office. Right? I don’t see many airlines when you walk around, you got pilots, cabin crew, accountants, everyone is in the same building. Everyone eats in the same place. Everyone here goes to the same gym.
I want people who believe they can do a lot more and grow and develop in this company. We have boys who’ve carried bags for us are now pilots. We have the largest percentage of female pilots of any airline in the world. When I joined, there were no female pilots. I said, “Why are there no female pilots?” I can never repeat what my chief pilot said. I said, “If a woman can run a country, she can certainly fly a plane. Right?” We embraced diversity. We don’t care what race, creed, colour, sexual preference you are.
I think that’s a strength because that gives us a huge diversity in our workplace and a huge ability to attract great talent and great ideas. The culture is the single most important thing. I could spend 20 episodes on it from turning raw diamonds into diamonds, from going outside of the box in terms of recruiting and giving people the ability to find talents in themselves that they didn’t even know themselves, just to really grow that whole talent pool that we have.
Nathan: That’s actually a good one because, for a lot of our audience, they’re just getting started. They’re starting to build their founding team. What advice would you have to a founder or CEO watching things thing and wanting to help their team do their best work in the early days because that’s critical? Right?
Tony: I think the number one advice is you as a founder or CEO don’t know everything, and you’ve got to surround yourself with good people, and you’ve got to be prepared to listen. Too many founders, CEOs think they know it all. That’s where they lose good people or they just have yes men because they’re passionate about what they do. I’m super passionate about everything I do, but I also know I don’t know everything and so I surround myself with good people.
You can have all the ideas you want in the world, but execution is what it’s about, and you need a good team. The advice, and this is very … I hate advising people because everyone has their own ideas, but I can only tell you my own experience is that I have hired people who add value, who are good communicators, who are team players, and give them the platform to be the very best and don’t feel intimidated and hold them back. I think most of the people who started AirAsia with me are still here, and a lot have developed and are into bigger and greater things.
Nathan: We saw your personal brand. You have The Apprentice. Right? Can you tell me about that?
Tony: Yeah, that was done by the commercial department. For many years, I turned it down because I didn’t think I was Donald Trump. Right? By the way, he stole my red cap. He saw me when I was wearing it. We all had an Apprentice get together, and I came in with my AirAsia cap. I think he took the idea from me, the Make America Great one. Where was I? I lost my mind when I mentioned Donald Trump.
Apprentice, yeah, so the guys wanted me to do it. As I say, two, three years, I kind of turned it down. Then they say, “It’s great for AirAsia, great for marketing.” I did it. I told the producers, “Look, I can’t be Donald Trump, and I can’t be Alan Sugar.” They said, “Just be yourself.” You do become a little bit of an asshole when you’re in that room. People say, “Wow, you’re really scary, man,” and like, “Really?” I watch myself, and I’m a bit of an asshole, so yeah. I think it was fun. They wanted me to do it again, and I’ve kind of stalled a little bit on it, but yeah, maybe.
Nathan: Okay. One thing that I’ve noticed as well in today’s day and age is consumers are much more interested and concerned with the people the leadership team or the CEO or founder behind the company, and you see a massive rise in personal brands and all that side of things. Do you think this is something that founders should be focused on in the early days, or were you … Because you had a bit of a personal brand beforehand like …
Tony: Each, their own, right?
Nathan: Yeah.
Tony: Some people can carry it. Some people can’t. Some people feel comfortable with it.
Nathan: Yup.
Tony: Some people can’t. It’s definitely worked in our favour. They may not agree, but it’s helped, I think. It’s dangerous because, sometimes, you come too synonymous the brand, and when you go, it’s like there’s a big void. Right?
Nathan: Yeah.
Tony: I’m very conscious of succession management. We had a press conference today, and I made sure I didn’t speak and other guys speak, and I tried to do less on that front now. I think it’s important. There’s never ever a press release in AirAsia that I’m aware of which doesn’t put a name there. I think people want to know who’s behind it. Right?
You want to know the captain flying the plane. You want to know who is behind this. Right? When we had the worst day of my life when we lost a plane, the lawyer said I don’t have to go there. I said, “Are you crazy? I have to go. I have to go for my staff, and I have to go for the families because I’m the leader of the company and I can’t hide behind it. You can’t just take the good things.”
I think it’s important that people know who you are, and you stand behind your brand. I think it’s better, but it really depends on the individual whether they can carry it. I think if you stand behind your brand, you give it a little bit more confidence. Right? You stand behind your brand, good or bad, you’re there. I’ve had a lot of bad as well. Right? People know that I’m there.
Nathan: Have you ever failed?
Tony: Oh, yeah. Loads of times. Loads of times. Failure doesn’t worry me because I rather fail than not try at all. Many people are too worried about failure, so they don’t do anything. Right? How many women did you regret not going up and approaching, thinking, “Damn, I should’ve done that.”? Right? At least, if you approach and she said, “Go to hell,” you knew. Right? I think I’ve had many failures, too long for this programme.
Two things about me in that I don’t have any regrets because if I didn’t try, I wouldn’t know. Two, as soon as I know it’s wrong, stick your hand up and admit and say you screwed up and move on. Too many guys hang in there and their ego doesn’t allow them, guys and girls, don’t allow them to make that mistake, and then they carry on and add more to that error. Right?
Nathan: It’s an interesting one, like persistence versus giving up and moving on. There’s a lot of people-
Tony: Oh, yeah. I’m not saying give up straight away, but realise when you need to give up. I always say never say no for an answers and dare to dream and go for it and all those kind of things. No, I’m not saying give up straight away, but know when you should give up and stick your hand up and say, “I give up.”
Nathan: How do you know though when to keep going and when to give up?
Tony: You know in your heart. Yeah. That’s not difficult for me.
Nathan: Well, look, I have to work towards wrapping up. I’m curious, what’s exciting for you right now with everything that’s going on AirAsia?
Tony: Yeah. This whole digital side is exciting. It’s a challenge. We’re up against big guys FinTech, you got Alipay. I’m like, “I don’t mind. I’ll take them on.” Everybody thinks I’m mad. Right? I mean, they got a billion users and I got 500,000, but hey, I started an airline with two lines against Singapore Airlines, and Malaysian Airlines, and all these other big guys. I’m not worried about that. That’s exciting. I love that challenge. Right? I could fail, but hey, we’ll give it a shot.
That side is exciting. The digital side is really exciting for me. In a strange way, we’ve had a tough time in Australia, a tough time. Qantas and all these guys have not made it easy for us. Of course, they’ll say, “No, we had nothing to do with anything,” but everything gets blown out of proportion when it’s AirAsia, I mean, really blown out of proportion. That’s because we’re good, and so people don’t really want us to come in.
I love that challenge. I love the fact we’re doing Avalon. That’s a big thing for me to do that. We’d like to do more in Australia. We’ve hired some Australian crew. We hired some Australian pilot. It’s a natural part to be in, so that’s exciting for me. Doing tie-up with the surfers. I mean Gold Coast was fantastic. If you push me, this whole digital revolution in AirAsia is exciting. It’s irritating to some of my guys because I suddenly say, “We’re not going to use Microsoft anymore. We’d do Google tomorrow.” They all stabbed my doll and say he’s an asshole. That’s part of the advantage of being the owner that you can do it.
Yeah, Asianization, creating one airline. I hate race and religion and cultures. I want to create a multi-ethnic company that … If you look at Emirates and you see … They have all kinds of nationalities, but they all gang up together. Right? You’ll see the Bulgarians on one side, and the Australians on another side, et cetera, et cetera. I want to have a fantastic, multi-ethnic, diverse company. I think we’re not far from that. That’s exciting to me to show the world what we can do as an Asian company.
Nathan: Amazing. When it comes to your vision, has it changed since the early days, or it’s still …
Tony: Still the same. It was all about … I thought in the shower, my tagline was now everyone can fly. It’s still that. I wanted to build a brand that was as big as Coca-Cola, which is a huge, lofty ambition. I think we succeeded in parts of Asia that we’re as well-known as Coca-Cola. My vision was to create a great place to work, a fair place to work, a place where it didn’t matter where you went to university. You’d be given a chance. It didn’t matter whether you had money and didn’t get a great education, but if you had a great brain and you had the will and belief, you could achieve anything in this airline.
To turn a raw diamond into a diamond is … We have so many of those. That is … If you ask me, what would I be remember for, is building a great working environment that create a lot of people’s dreams come true coupled with the other two things. Then make sure we have fun. Right? It was a fun place to work. We do crazy things like build slides and rooftops with running tracks up there and all kinds of crazy things. We got to have fun coming to work.
I think if you were to really push me, it is allowing a lot of my staff here to live their dreams. That would be something that I’d be most proud about. To see Kugan who was a dispatch boy who’s now a first officer and about to be a captain, money can’t buy that kind of satisfaction when you see that, and like, “Wow.” I changed his life, and that’s worth more than all the dollars anyone can give me.
Nathan: Amazing. Well, look, thank you so much for your time, Tony.
Tony: Pleasure.
Nathan: Last question. What advice would you … Well, two more. What advice would you just love to just give to finish off to our audience, anyone that wants to start a business, doesn’t know where to start, or anyone who has just launched, or just found product/market fit, and the last one is, where can people find out more about yourself and AirAsia?
Tony: Oh, wow. There’s enough articles out there both good and bad, search Google. Buy my book. I think advice I’d give to any budding entrepreneur is follow your heart. Advice from Tony Fernandes or yourself or anyone is useful. I got advice from books, et cetera, et cetera, but 90% is just to go do what you want to do. If anyone wants to advise you, then they would’ve done it themselves. You’ve got to follow your heart and do it, and you’ve got to be determined to do it and make that difference, as Nike says, just do it.
Second, I reemphasize, keep some money for branding. It’s really important, and surround yourself with great people and have fun because it’s fun coming to work. Right? You want to get up in the morning and be, oh, my God. I’m going to see Chris. How fun? Yeah. Great, Chris is here, and he’s going to drive me mad and say, “You’re late. Come here. Be on time. I’ve got a very important PR contact here.” I think too many business leaders take life too seriously, too many entrepreneurs get too stressed, and have a balance. You don’t have to work 18 hours a day. Make sure you give time to your family and your kids and your friends.
Nathan: You haven’t worked 18 hours a day to get here?
Tony: Yeah, I have. I have, but not every day.
Nathan: Yeah.
Tony: I had fun.
Nathan: Yeah.
Tony: Maybe too much.
Nathan: Awesome. Look, thank you so much, Tony Chan. Absolutely pleasure, mate.
Tony: Thanks a lot. Enjoy AirAsia.
Nathan: Thank you so much.
Tony: Keep flying us.
Nathan: Yeah. Yeah.
Key Resources From Our Interview With Tony Fernandes
- Visit AirAsia.com
- Check out Tony’s book, Flying High
Subscribe to The Podcast on iTunes, Soundcloud, Stitcher and Spotify
This is a really inspiring piece, I’ve flown with Air Asian in Thailand and it’s true, they have amazing deals and you feel really like ‘now everyone can fly!’
Also long time listeners, but this interview was one of my favourites all time.
So much advice about thinking outside the box, creating a team, helping others, marketing.
Thank you so much!
This would have to be my favourite podcast interview so far. What an interesting person with such practical advice. Something for all mangers in all industries to follow.