Tony Fernandes — who bought an airline for 26 cents and turned into a billion dollar company — lands in trouble

• Entrepreneur Tony Fernandes, the man who built AirAsia is facing trouble amid bribery allegations.
  
• He bought a state-owned AirAsia which was sinking fast into a whirlpool of debt for 26 cents in 2001 — and and turned into a billion dollar company.
  
• He turned it around from $11 million debt to break even in two years.
  
• In September 2019, the 55 year old Fernandes announced his retirement to let the next generation leaders in AirAsia to come to the forefront.

Tony Fernandes’ rise to the top mirrors that of a Bollywood movie where a hero left with a single coin soon turns into a millionaire. After all, he bought a state-owned AirAsia which was sinking fast into a whirlpool of debt for 26 cents in 2001 — and and turned into a billion dollar company.

But his fall also came as dramatically after aerospace company Airbus said that it paid $50 million to the Malaysian airline. He had to step down as the CEO temporarily for 2 months, and denied the allegations.

Fernandes who promised to cooperate with the authorities is no stranger to controversy. His company which has in a joint venture with Tatas in India was also investigated for playing a part in relaxing a rule that needs an airline to be operational for five years with 20 planes before they are allowed to fly overseas.

Cyrus Mistry, the former chairman of Tata Sons too had expressed discomfort with his association with the airline. “Board members and trustees are also aware that in the case of Air Asia, ethical concerns have been raised with respect to certain transactions as well as the overall prevailing culture within the organization,” he said in a letter to the board.

In Malaysia too, Fernandes is known to be close to many politicians and even painted one of the parties’ slogans on the plane — landing him in trouble. While many of his maverick branding bets gave wonderful results, they also landed him in trouble enough times.

The boy who wanted to be a pilot

After completing his education from Britain’s Epsom College, Fernandes worked for Richard Branson and entertainment companies like Warner Music. But his childhood dream of becoming a pilot brought him into the aviation sector.

After he bought the airline, he turned it around from $11 million debt to break even in two years. It started with two planes but now has a fleet of over 260 planes and flies as many as 100 million passengers.

A major part of his success comes from his consistent efforts in building a brand. “The first thing you need is a great product, the second thing, you got to invest in branding. There are so many great ideas, and nobody knows about them,” he had said at a conference in Hong Kong.

Early bird technology investments

Fernandes lived by the idea of investing in events where he saw potential — which expanded his clientele. He spent generously on sponsorships — including a football club Manchester United. And, this was when AirAsia had merely seven planes. It had also invested in esports. He also made a personal investment to create a football club Queens Park Rangers (QPR) in London. According to Forbes, he has a net worth of $530 million.

He did not hold back even when the time came to invest in technology. AirAsia was one of the early birds to deploy cloud technologies with an online ticketing system. This data of customers turned out to be goldmine — which was then used to implement technologies like facial recognition.

“I didn’t see the digital revolution that was to come. Now we have a massive amount of data, not just in Malaysia but across ASEAN,” he said.

Dating on the plane

Since then, the airline has introduced several consumer friendly initiatives like partnering with the dating apps for the passengers to ‘connect’ on the plane. Come 2019, the airline also became the first to set up a restaurant selling in-flight fare on land.

“Who would have thought: airline food to restaurant? ASEAN’s first fast food restaurant,” Fernandes had said.

In September 2019, the 55 year old Fernandes announced his retirement to let the next generation leaders in AirAsia to come to the forefront.

“For clarity: I will remain CEO of AirAsia group and CEO of AirAsia.com. Rest of my positions in the boards and management will go to my young amazing leaders. So so many of them. Leadership is about succession planning, always giving youth a chance,” he said. But, it looks like everything is not going according to his plans.

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