Bought Air Asia for 26 Cents and Turned into Billions
Air Asia News :
Air Asia is currently flying into many countries across the world.Air Asia is rated as one of the best budget airlines in the world, having won the Skytrax World’s Best Low Cost Airline for the sixth year in a row as of August 2014. Like the current state of its sister company Malaysian Airlines, the Kuala Lumpur-based airline was once government-owned and virtually run into the ground until one brilliant entrepreneur turned the the diseased company into an empire.
In 2001, Air Asia only had two rickety Boeing 737 jets, 250 employees, one route and $11 million of debt. Entrepreneur and current CEO Tony Fernandes bought the dead company with several partners for one Malaysian ringgit — the equivalent of 26 cents at the time — and assumed the company’s massive debt under his holding group Tune Group.
Tony Fernandes was born in Malaysia but was educated at the London School of Economics. Before buying Air Asia, he had no experience working with planes. If you think the Air Asia logo looks familiar, you are right. A good deal of Fernandes’ charisma and style seems to come from his years working at Richard Branson’s Virgin Communications in the mid-80s as a financial controller. He eventually moved to Warner Music International in London, and then later to Malaysia, where his experience as a music executive gave him a sense of entrepreneurship and a feel for the Asian entertainment markets.
How did he turn a failing Air Asia into the now $1.5 billion-a-year company? The answer is almost annoyingly simple — he basically copied the same business model as Southwest Airlines for cheap tickets, good service and quick turnarounds for flights to keep planes in the air. The company reached profitability in 2002, and over the next 12 years, AirAsia expanded their flights to affiliates all over the region to become one of the the most efficient, low-cost airlines in the world. AirAsia now has over 10,000 employees while operating 169 Airbus A320 and A330 jets that transport 230 million passengers a year.
Tony Fernandes Says:
“What does the market want? Nine times out of 10, when you go for what the market wants, it’s something that’s different … But we weren’t the first to invent low-cost travel, we weren’t the first to invent a low-cost hotel … We’ve taken it to another level, but we’ve been a bit Japanese in taking it, and adapting it, and making it better for our part of the world.”
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