An AirAsia full-service airline would be ‘disastrous’, says CEO Tony Fernandes

An AirAsia full-service airline would be ‘disastrous’, says CEO Tony Fernandes

MANILA: Starting a full-service airline to take on the world’s best-rated carriers is not something low-cost aviation giant AirAsia will be considering, according to group chief executive Tony Fernandes.

Speaking to Channel NewsAsia, Mr Fernandes implored regional airlines to stick to what they do best, as the battle to dominate Asian skies intensifies.

“If AirAsia decided to start a full-service airline, we’d be disastrous at it. It’s not in our DNA,” he said.

“I think airlines should just stick to what they’re good at. You don’t get Rolls-Royce trying to start a budget car company.”

Mr Fernandes, whose fast-growing budget brand will fly out of the new Changi Terminal 4 in Singapore later this year, had some choice advice particularly for Singapore Airlines, which recently merged its Scoot and Tigerair brands to create a more formidable low-cost carrier.

“If I was Singapore Airlines, I’d just focus on the Singapore Airlines product,” he said. "It should focus on what it’s good at. It’s a good premium product.

“Airlines, because they’ve been monopolies, are scared to lose any sort of control. One of my biggest mistakes is losing focus. You try to do too many things and you lose focus."

Mr Fernandes said disrupting traditional flying hubs like Singapore and Hong Kong and creating new large-scale transit options in Kuala Lumpur and Bangkok has been key to his strategy of regional expansion. He says he is a strong believer in point-to-point travel, which means passengers can avoid the stopovers that previously might have inconvenienced their journey.

But he also admitted the low-cost sector is healthier for having strong competition in different countries.

“This isn’t a zero sum game. Asia has over 3 billion people, I don’t think one airline could serve all of that,” he said.

“Competition makes you better. It makes you try harder. It makes you stay on your toes. You become fat, lazy and complacent when you have no competition.

“That’s one of the problems of the airline business; they spend too long trying to kill each other rather than focusing on what they’re good at.”

AirAsia now flies to more than 300 destinations and is in a strong financial position, recording a 37 per cent increase in operating profit at the end of the second quarter of this year. Fast growth in India is expected to bring more sizable profits in 2018.

The company has largely rebounded from the crash of one of its aircraft in Indonesia in late 2014, which resulted in the deaths of 162 passengers and crew.

Mr Fernandes said AirAsia has improved since then and, through regionalisation, the company is making its own consistent standards across its various international operations.

“Safety is a marathon. No airline CEO can say we’re the safest in the world, there’s no such thing.

“We minimise, we’re open, we’re transparent, we want to have similar standards and we want to be the best.” 

Source: CNA/jb