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Interesting Article About AirAsia's Comments

Tue Feb 17, 2004 1:01 am

SINGAPORE : Buoyed by the success of his one-month-old venture in Thailand, AirAsia founder and chief executive Tony Fernandes is brimming with confidence as he slugs it out with Singapore Airlines (SIA) to establish the region's leading low-cost carrier.

He views SIA's decision to jump on the no-frills bandwagon as a compliment and is unfazed by the prospects of facing Tiger Airways, which is backed by the formidable war chest of the national carrier.


SIA holds a 49 percent stake in Tiger Airways in a four-way venture that also includes European budget carrier Ryanair's founder, Tony Ryan.

"To get SIA imitating you, that's flattering isn't it," Fernandes told AFP last week in Singapore, where he was a speaker at a two-day symposium on the challenges facing the low cost airline industry in Asia.

"Not just for me... it's for my whole company and staff.

"They should be very proud to have SIA, one of the world's most famous airlines, trying to imitate it."

Fernandes, 39, is clearly relishing the challenge from SIA, taking the fight into the carrier's home turf by roping in a Singaporean partner to apply for a licence to operate an airline in the city-state.

"We're going to create a lot of people (passengers) who haven't flown before," said Fernandes, who does not see Singapore's tiny population of four million as a drawback.

"We have some interesting ideas for the routes which many people wouldn't even have thought of doing," he said, but refused to be drawn into giving more details until he gets the green light for his 120-million-Singapore dollar (71.42-million-US dollar) venture.

Fernandes said he wanted to have the airline operating as soon as possible, but he had not been given any indication from the government as to how long it will take to get regulatory approval.

The Singapore venture is the latest step taken by the two-year-old Malaysian company to become Southeast Asia's version of European budget carrier Ryanair.

From its humble beginning with just two Boeing 737-300 jets in 2001 plying Malaysia's domestic routes, AirAsia has expanded at a furious pace under the helm of Fernandes, an accountant by training who previously had no experience of running an airline.

It now has a fleet of 14 Boeing 737-300 aircraft and aims to increase that to 30 before December.

It already flies to Thailand and is keen to spread its wings to Indonesia.

In Thailand, its joint-venture with Shin Corp., the family firm of Thai Prime Minister Thaksin Shinawatre, serves routes linking Bangkok, Chiang Mai, Phuket, Hat Yai, Kon Kaen and Nakornrachasima.

His lack of prior experience of running an airline did not deter Fernandes from pursuing his dream of starting AirAsia, a move which sceptics said was doomed to failure because the low-cost concept would not be warmly embraced by the region's travellers.

"I think we definitely take credit for that," was Fernandes' response when asked if AirAsia's success was the reason behind several premium service carriers' decisions to launch similar set-ups in the region.

Apart from SIA, Thai Airways and Qantas have also launched their own no-frills carriers.

Fernandes remains confident despite the growing number of rivals snapping at his heels on the field, attributing his success to the Thai venture which has proved he has the winning formula to fend off the competition.

AirAsia's Thai venture is already profitable ahead of initial projections and Fernandes is convinced his plans to extend the AirAsia brand to Singapore will also prove to be a winner.

"Yes, I am confident," Fernandes said.

"I am really thrilled to say that we are heading towards profit in our first month in Thailand which we are so excited about because we thought it would take us a year to make money."
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