Four months ago, Malaysian Tony Fernandes was the envy of his peers at Warner Music. Only 37, he controlled a swath of territory from India to Indonesia as the record label's vice president for Southeast Asia. He drove a company Jaguar, had a $10,000 stereo system in his office and jetted around the region to hobnob with recording stars and entertainment executives. Then in July, Fernandes quit Warner, mortgaged his home, and sank his savings into a venture aimed at reviving Malaysia's loss-making second airline, Air Asia. Even before Sept. 11, the world's airlines were in trouble, and this move was not universally hailed as a wise career choice. "Most people thought I was crazy," says Fernandes.

Events since that plunge have hardly improved the situation. But Fernandes thinks he can make Air Asia work, and that conviction was a godsend for the former owner of the airline, government-linked conglomerate DRB-Hicom, which had been trying to unload the company for nearly two years. Given that the airline is running at a loss and has racked up $37 million in debt, finding a buyer hasn't been easy. Enter Fernandes, who convinced DRB-Hicom, the Malaysian government and airplane leasing partner General Electric that he could make Air Asia work as a no-frills carrier.

The deal was for Fernandes and three other partners to pay 1 ringgit and assume $12 million of Air Asia debt. That leaves him, four months after quitting a cushy job and two months after what was undoubtedly the worst day in the history of commercial aviation, relaunching a failing airline. "Considering that many airlines are cutting back, and domestic airlines rarely make money anyway, [Fernandes] must be a very brave man," says Sebastian Chang of DBS Vickers Research in Kuala Lumpur.

Fernandes says in fact his timing was perfect: Since Sept. 11, aircraft leasing costs are down 40%. "I can get newer [Boeing models] than the airline had before at the same price," he says. Also, airline layoffs mean experienced staff are readily available. Fernandes believes Malaysian travelers will embrace a cut-rate air service that will save them time and money, especially in a tight economy. That's why he's copying one of the world's most successful no-frills carriers, Ryanair out of Ireland (which in turn is modeled after Southwest Airlines in the U.S.). In fact, Conor McCarthy, a former Ryanair chief operating officer, will be a part-owner in the new Air Asia and chief advisor to Fernandes.

The new Air Asia business model will slash fares on heavily traveled routes, turn around planes much faster than before, and stop serving complimentary food and drinks. "Just stacking, storing and serving 200 meals on a flight is very expensive," says Fernandes. Eliminating meals will also mean the normal complement of cabin crew can be cut from six to three. And as for keeping the planes in the air more, Fernandes says flights will be expected to spend only 25 minutes on the ground at one time. If passengers are late, he says they'll simply forfeit their ticket: "We are not going to wait."

The goal of all this is to get ticket prices to a level where they're competitive with alternatives. "If Fernandes wants to make a go of this, he has to compete against the buses," says Chang. The old Air Asia didn't even try to compete. Its only regular route on Peninsular Malaysia was between Kuala Lumpur and the resort island of Langkawi near Penang. But the new carrier is adding three leased commercial jets to the two it already has. And Fernandes says it will offer the critical Kuala Lumpur-Penang route for $30 one-way. That undercuts the $47 fare of Malaysia's flag carrier, Malaysian Airlines, and is close enough to the average $15 bus fare to entice those travelers. "Our whole business model is constructed to meet that challenge," says Fernandes.

The would-be airline mogul is now spending his last days in his old Warner Music office in a downtown Kuala Lumpur high-rise. As a parting gift, Warner gave him use of the office until the lease expires in a couple of weeks. Warner also gave him the Jaguar, but he probably won't get the stereo. That's okay. Fernandes's new life will be no-frills.

Malaysia’s AirAsia Sdn. is Asia’s only no-frills carrier outside of Japan, and it’s the greatest entrepreneurial success story out of Malaysia–if not all of Asia–in a long while. Fernandes’s airline began flights in December 2001, with two planes and already boasts that rarest of things among carriers: profits.

The secret? “I decided that I would run the airline my way, not as others might,” Fernandes explains.

Just like UK billionaire Branson, who owns Virgin Blue Airlines Pty, the Australian budget carrier, Fernandes found an untapped market and tackled it with a mix of ingenuity, drive and panache. Basically, he’s succeeding where observers thought he would fail.

Asia could use more entrepreneurs like Fernandes, people who aren’t afraid to chase a vision, take risks and compete with the corporate behemoths towering over most of the region’s economies. Now that it’s made a huge splash in Malaysia, AirAsia, wants to go regional; it’s considering routes to Indonesia, the Philippines, Singapore and Thailand.

Seven planes

AirAsia’s story is bigger than the company itself; it has all of seven planes so far. It’s really a story of what could be here in Asia. What Fernandes did is a microcosm of Asia’s challenge to support scrappy and unconventional startups that create competition and jobs. Too often, governments protect monopolies, leaving less room for new ideas and businesses to take root.

Fernandes is the first to admit he hasn’t reinvented the bargain-airline wheel. AirAsia’s low-cost model isn’t all that different from those of EasyJet Plc and Ryanair Holdings Plc. What’s extraordinary, though, is that Fernandes did it in Asia.

You don’t see loads of budget airlines here because the industry is heavily regulated and hard to enter. To get off the ground, Fernandes had to score a meeting with Malaysian Prime Minister Mahathir Mohamad. He got the go-ahead–not bad for a British-educated Malaysian of Indian descent who claims to have no high-level political connections.

“If the Malaysian government didn’t give us a fair playing field, we wouldn’t be here,” Fernandes says.

Sells AOL stock

The former managing director of Warner Bros. in Malaysia sold his AOL Time Warner Inc. stock options and bought AirAsia for 1 ringgit and the assumption of $18 million of debt. Barely a year later, his airline was flying domestic routs in competition with state-controlled national carrier Malaysian Airlines System Bhd. The point is this: while foreigners carp about cronyism in Southeast Asia, Fernandes is living proof someone without politicians in his pocket can set up shop and compete directly with a government-owned entity. AirAsia, which expects to report a profit of 20 million ringgit ($5.3 million) on sales of 330 million ringgit for the year ended June 30, may go public in as early as 2006.

Trouble is, AirAsia is the exception, not the rule, in a region that desperately needs more entrepreneurship. Fernandes is becoming a celebrity not only here in Malaysia, but throughout the region. Last month, that notoriety helped AirAsia sell a 26-percent stake to three foreign investors for $26 million.

Takes on big guys

The airline will need the money. Its expansion plans will run up against other regional giants, including Singapore Airlines Ltd. and Thai Airways International. Fernandes is adding 11 Boeing Co. 737 planes to his fleet at a time when bigger players want to follow him into the budget airline business

Fernandes isn’t losing sleep, though. He reckons AirAsia’s head start, its bargain-basement fares and proven ability to operate at minimal cost give it an edge over the big guys, including Singapore Air, Asia’s most profitable carrier.

“Singapore Airlines is a premier brand,” Fernandes says. “You don’t get the Ritz-Carlton creating budget hotels. If you lose your focus, you are going to lose.”

Something Fernandes certainly hasn’t lost is the risk-taking that served him well during his music industry days. For example, his airline relies far more heavily on the Internet for ticket sales than rivals. He’s also looking to sell merchandise around the AirAsia brand and may use his planes as advertising space to keep airfares low.

The Branson comparison

Such ideas earned him a Branson-like reputation as a maverick here in Asia. Like the flamboyant Branson, Fernandes has a knack for witty turns of phrase and getting the media’s attention.

Fernandes also isn’t afraid to deviate from established business practices. “Many Malaysian companies are top heavy, inflexible and don’t listen to employees,” he says, adding that AirAsia strives to avoid all of these pitfalls.

Six years after the start of the Asian financial crisis, the region’s economies are back on track. Missing in many countries, though, are innovative, ground-up business ventures that create jobs, competition and inspiration for other would-be visionaries. Equally absent in many cases are government efforts to draw them forward.

AirAsia is proof enough of the good that can come from governments letting business people pursue their ambitions. It’s also proof that while Asia has come a long way since the crisis, it still has a way to go.
-- Bloomberg

Though Fernandes refused to state the price band for an Air Asia India-Malaysia ticket fare, industry insiders pointed out that the fare is expected to be under Rs 4,500 for a one-way ticket, which is cheaper than a Delhi-Mumbai fare.

Fernandes believes Indian and Malaysian travellers will embrace a cut-rate air service that will save them time and money, considering a tight economy.

“There is a lot of potential with a huge Indian population in Malaysia . Disposable incomes have grown in India but international air fares are still very high for many. We are just going to make this affordable. This will also increase trade between the two countries as more and more small businessmen will now be able to venture out and seek opportunities.”

But Fernandes does not intend to have flights to all points across India . “We will just look at South India because to cater to south Indian population in Malaysia .” The airline will operate a Boeing 737 aircraft with refreshments, excluding cigarettes and liquor, being sold on-board.

“It is a total no frills airline, but we will go with a clean image. There will be beverages on our flights but no liquor,” he says. As for ticketing outlets, the airline intends to operate through some direct sales agents, via internet and call centres.

Till recently Warner Music’s vice president for Southeast Asia , Fernandes quit his high profile job, mortgaged his home and sank all his savings into a venture aimed at reviving Malaysia ’s loss-making second airline, Air Asia.

“Most people thought I was crazy but I saw an opportunity as asset prices in the aviation industry had hit historical lows.”

AirAsia's 38-year-old half-Goan CEO Tony Fernandes is in the process of finalising plans for landing into India . "We intend to start flights to the southern part of the country and are keenly awaiting liberalisation of civil aviation regulations in India ," Haridas Pillai, senior director (operations) of AirAsia said.

The firm is planning to start an joint venture with one of the local partner for the India foray. "We will go the branchising route as we have followed in Thailand . We are preparing to spread our wings to Indonesia , the Phillipines and then India ," he said.

The airline is planning to provide connectivity from Delhi , Chennai, Thiruvanthapuram, Madurai , Hyderabad and Bangalore to Malaysian destinations like Kuala Lumpur , Penang and other regional centres.

Pillai said the airline intends to deploy a Boeing 737 on the southern Indian routes and bigger aircraft for the other centres.

AirAsia on Wednesday joined hands with Shin Corporation to invest in a low fare airline business in Thailand . The investment is aimed to develop the transportation infrastructure in Thailand , expand the domestic aviation market by providing another transportation alternative for the people of Thailand and ultimately contribute to the growth of the country’s tourism industry which will, in turn, stimulate the country’s economic growth, Fernandes said.

"The partnership exemplifies the beginning of an Asean brand. AirAsia is excited because the deal is very significant in the name of the Asean spirit of economic cooperation and integration," Fernandes added.

The venture will commence its services in the beginning of 2004 with three Boeing 737-300. The initial routes include Bangkok , Chaing Mai, Phuket, Hat Yai, Kon Kaen and Nakornrachasima. The average fares offered for a single trip is normally 40-50 per cent lower than other airlines.

Fernandes has surely come a long way. Till recently Warner Music's vice president for Southeast Asia , Fernandes quit his high profile job, mortgaged his home and sank all his savings into a venture aimed at reviving Malaysia 's loss-making second airline, Air Asia.

However, in an interview with Business Times, Fernandes said he and Branson are as different as chalk and cheese.

“Everyone thinks that I’m trying to emulate him. Big difference. He owns a record company (Virgin Records). I worked for one (when Fernandes was working for Virgin and Warner Music International’s London Office). The airline (Virgin Atlantic Airways) he runs is also different from the one we run,” said Fernandes.

“He (Branson) is flamboyant while I’m not. He is not a hands-on manager while I am. He puts people to manage his businesses while most of the time my partners and myself manage AirAsia ourselves.

“He likes to start something new and then move on to another when he gets bored. I just have this (AirAsia) and I can’t see myself doing anything else for a long, long time, except as an investor,” said Fernandes.

Still, he understands the comparison to Branson. “I think maybe it stems from the fact that Branson and I both share the same passion for music and having fun. Our management style is also different from other CEOs’,” Fernandes said.

Since taking over the reins at AirAsia in 2001, Fernandes has become one of the most aggressive CEOs in the country. He has been named the joint winner of the CEO of the Year 2003 award by American Express Corporate Services and Business Times .

The 39-year-old graduated from the UK in accountancy in 1987. It took a brief stint as an auditor with a firm in London for Fernandes to realise that he wasn’t interested in becoming a full-fledged accountant. “I really hated the job, so six months later I left to join Virgin as a financial analyst and then financial controller in the company’s television division in London, where I worked for two years,” he recalled.

In the course of his work with Virgin he got to know Branson. “I was there when Branson started his airline (Virgin Atlantic in 1984). We all thought he was mad when he started it just as I think many people thought I was mad (when I took over AirAsia),” Fernandes said.

Fernandes then moved to join Warner Music in 1989 and was transferred back to Malaysia in 1999. Fernandes was 27 when he became the youngest-ever managing director of Warner Music (Malaysia) Sdn Bhd. His last serving role at Warner Music was as vice-president for the Asean region.

Two years later, Fernandes traded in his high-flying job for a chance to create his own low-cost carrier. He started a company under the name TuneAir Sdn Bhd in partnership with chairman Datuk Pahamin A. Rajab and directors Abdul Aziz Abu Bakar and Kamarudin Meranun; on December 8 2001, TuneAir officially acquired 99.25 per cent equity of 51.68 million shares from DRB-HICOM Bhd and took over AirAsia, Malaysia’s second national carrier.

“I wanted to do that because I was fed up with the politics in the workplace and tired of working for others and being told what to do. I told myself, ‘I am still young and if I don’t start now it will eventually be too late. Even if it fails, I can always go back to being an accountant’.

“And I don’t want to look back 20 years from now and say, ‘I should have tried it’. It is better to try and fail, then not try at all. That’s my philosophy,” said Fernandes.

Fernandes said the idea of starting an airline came from him. “I had this desire to start an airline and I thought a low-fare airline would work very well in Malaysia. So I went around and started putting the plans together. I roped in three partners — Datuk Pahamin, Aziz and Kamarudin, for starters. Datuk Pahamin helped arrange a meeting with then Prime Minister Tun Dr Mahathir Mohamad.

“It was Dr Mahathir who said that he would rather us buy an existing airline than to start a new one. I think Dr Mahathir’s vision was all about turning companies around as opposed to starting new ones. And it was the greatest thing that could ever have happened because one, AirAsia has a strong brand. Two, it was a good airline that DRB-HICOM had started. Operationally, the airline is a safe airline, with good pilots and good staff.

“So, we didn’t have to go through the painful process of recruiting and training people. We had a working model from day one. We just had to change the strategy a bit,” said Fernandes.

Today, Fernandes operates out of a modest, unglamorous office at KL International Airport in Sepang. He has no intention of moving out of his office or relocating AirAsia’s headquarters to one of the office towers in Kuala Lumpur.

“Never. It will always be at the airport. If you run an airline, you have to be at the airport and this is one of the main reasons for our success.

“You’ve got to be close to your business. You’ve got to be able to talk to your guests (a term used by AirAsia to describe its passengers), see why there are flight delays and what’s happening.”

Fernandes has also instilled a unique corporate culture that emphasises having fun. Thus, it is not surprising to walk into his office and find him deep at work with rock music blasting away. The 1,000-strong AirAsia staff also get to dress in smart casuals.

Fernandes, who has no background in the airline industry, readily admits to not knowing everything. “Our fifth partner, who came from Ryanair, (director) Conor McCarthy, is very much my ‘sifu’. And I learn from the staff themselves.

“But most of the time, I learn by doing the job. I don’t pretend to know everything. Stuff I don’t know, I just ask. And there’s no substitute for hard work,” he said.

“I like being close to the operations. I enjoy working with people and half of my job is to motivate my staff. Because no matter how good I am, my staff are the ones who make me who I am,” Fernandes said.

“We are only as good as the people below us. Without my staff, we are nowhere.”

"It was very emotional for me. As a young kid, I used to fly on MSA (Malaysia-Sinapore Airlines) to come to Singapore with my mum," Fernandes told reporters travelling on the inaugural flight.

"So to actually fly in on your own company is kind of cool. So I had to be there. I requested the captain whether I could sit with him."

Fernandes' trail-blazing effort is revolutionizing air travel in the region as more budget airlines prepare to bring the flying experience to millions of Asians who have never taken a plane in their lives because of prohibitive prices.

The Malaysian budget carrier has expanded hub operations to Thailand and is keen on setting up a joint venture in Singapore, where two more no-frills rivals — Tiger Airways and ValuAir — are set to take flight this year.

Peter Harbison, managing director of the Australia-based Centre for Asia Pacific Aviation, said "dozens" of no-frills carriers were expected to emerge in the next 10 years.

Fernandes relishes an encounter with a Singapore taxi driver who thanked him because he and his family flew on an airplane for the first time to have a holiday to Kota Kinabalu, Malaysia.

AirAsia's call centre in Bangkok is a beehive of activity as 40 young Thais process 6,000 calls daily, including inquiries and bookings from first-time flyers, its manager Nuanphan Manuk said.

Star buys are tickets to Phuket and Chiang Mai, both popular Thai resorts.

Flying a budget airline is a pleasant experience for short-haul flights, even without the amenities offered by standard carriers, such as free meals, wine and in-flight movies or music.

On AirAsia for example, the cabin is clean despite the quick turnaround time at airports. Seats are covered with black leather and the floor is laid out with a red carpet.

Passengers have to pay for food, water and other beverages sold by flight stewardesses, dressed in glaring red suits. But for one who has had a heavy meal before boarding, in-flight meals are unnecessary.

To those who need food, prices are affordable. For the two-hour Singapore-Bangkok flight, prices range between 20 baht (51 U.S. cents) for a hot drink and 100 baht for a snack pack of light food, a fruit drink and a pen.

But the ultimate attraction is the ticket cost which can be 70% cheaper than those charged by regular airlines.

British tourist Alex Alden, 25, who was aboard the maiden Singapore-Bangkok flight on February 16, said he was happy to give up services normally seen as routine on premium carriers to get a cheaper ticket.

"I don't care about any pampering. It's a short-haul flight," said Alden of St. Albans, England. "The price is good for my budget."

Singaporean businessman Ronald Chen, 29, said he was impressed with the service despite having to pay for water and snacks that normally come free.

"The price makes travelling more accessible to everybody for holidays. It will encourage young people like myself to travel," Chen said.

Kahan Singh Gill, the leading crew member on the Singapore-Bangkok flight, said flight attendants performed multiple tasks to keep costs down.

They clean the plane as soon as the passengers disembark, without any regard for rank.

Analysts said budget airlines would become formidable rivals to the regular carriers, normally seen as bigger boys with deeper pockets.

Global aviation consultant Mo Garfinkle said these new kids on the block operated in a culture radically different from traditional airlines, where operations were regimented.

This culture is exemplified by the budget airlines' flamboyant, risk-taking chief executives such as British tycoon Richard Branson of Virgin Blue.

AirAsia's Fernandes, a former music industry executive, also prefers a casual management approach where staff are on a first name basis.

His frank, no-holds-barred repartees have made him his company's own best public relations advocate.

Fernandes hired his airline's Singapore operations chief — a leading crew of another airline — at Changi Airport after interviewing him on the spot.

"I came into Changi about three to four weeks ago. This guy came up to me and said he would like to work for AirAsia," he recalled. "After we talked, I told him to meet me outside after my passport is stamped. We met and I said 'okay you're hired.'"

On the inaugural Singapore-Bangkok flight, Fernandes sat near the tail of the plane and at one point walked the aisle to press hands with passengers.

Kahan, the air steward, said that during the Christmas, Lunar New Year and Hari Raya holidays, Fernandes would wait at the door and give packets containing money to children as they disembarked.

Garfinkle, the chief executive of US-based aviation consultants GCW Consulting, said at a conference here this month many traditional airlines still did not understand their low-cost competitors and tended to underestimate their management.

"I believe we haven't seen the restructuring of the industry that will be forced upon traditional airlines. And those changes are not just about cost, but also about culture," Garfinkle said

When Tony Fernandes, AirAsia's chief executive, recently announced a new joint venture, he made sure he was photographed in front of the headquarters of Singapore Airlines, just to goad his rival. “You've got to have fun once in a while,” he says, echoing his own tag line. Like his friend, Sir Richard Branson of Virgin, Mr Fernandes has turned himself into his company's most effective marketing tool. Just 38, he sports a trademark red baseball cap, fondness for playing drums and an unconventional background—he is part Goan, part Malay-Portuguese and he used to make music videos for Virgin.

Sceptics have long argued that, when it comes to air travel, Asia is different from America and Europe. The élite will insist on being pampered on board and happily pay for it. And Asia's protected national markets, long distances and paucity of cheap, secondary airports means that prices remain out of most people's reach.

Mr Fernandes is proving such thinking wrong. His airline was founded on the premise that Asians, even rich ones, like a bargain as much as anyone else and that ruthless attention to costs can make ticket prices affordable for almost everybody. Timothy Ross, airlines analyst for UBS, argues that the region's lower average incomes should boost rather than restrain the appetite for cheap fares. Bargain prices, such as AirAsia's 499 baht (about $13) deal between Thailand and Singapore, are helping the airline expand the market.

The target consumer base for budget airlines is also enormous: 500m people live within three hours of AirAsia's hubs in Kuala Lumpur and Bangkok, more than Western Europe's entire population. And the boost to local tourism in towns served by low-cost airlines is so great that other barriers to entry are proving relatively easy to get around. To avoid the restrictive sovereign air-service agreement between Thailand and Malaysia, for example, AirAsia has set up a local joint venture with Shin Corp, the family company of Thaksin Shinawatra, the Thai prime minister. Secondary airports, such as Macau, are virtually begging the company to set up a base there by offering to reduce landing fees.

Experience in other countries shows that, once the rules start to relax, growth is bound to take off. In America, budget carriers saw their passenger numbers rise 48% annually in the five years following deregulation, compared with 4% for traditional airlines. The low-cost carriers now have roughly a third of the market. In Australia, the no-frills airline Virgin Blue took only three years to win a 30% market share.

AirAsia has similarly been a soaring success. Starting with two planes bought from a Malaysian conglomerate in late 2001, the airline will have 30 by the end of 2004. It operates 19 routes across Malaysia, recently started Singapore-Thailand flights and, from next month, starts flying to Indonesia. The company has no debt and has been profitable from the start. Its profit margins (before interest, depreciation, amortisation and aircraft leasing costs) at around 35% are the highest in the world, according to Michael McGhee, CSFB's airline analyst. For the current half-year,AirAsia expects to make a profit of 42m ringgit ($11m), more than twice what it made in the entire previous year. No wonder bankers seem to be falling over themselves to help Mr Fernandes take the company public, probably later this year.

His success is spawning a host of copycat carriers. In the past seven months, the number of budget airlines either flying or about to launch has doubled from seven to 15. Most are spin-offs from traditional airlines such as Thai Airways' Nok and Tiger Airways, run by Singapore Airlines. These tend to have neither the cost discipline nor the culture of genuine budget start-ups. Thai Airways, for example, has hired an advertising executive to run Nok who seems to be a pale imitation of Mr Fernandes, both in his marketing and operational ability. Eric Kohn, deputy chairman of dba—a company that did poorly as a low-cost offshoot of Britain's BA in its previous incarnation—believes that older airlines cannot easily make such projects work: “People at big airlines don't have accountability or a focus on costs. It is a lot easier to start an airline from scratch than to take a legacy airline and make a profit.”

As Mr Fernandes is proving. He has been helped by timing. During the air-travel slump that followed the September 11th terrorist attacks, AirAsia was able to negotiate sweet deals with aircraft manufacturers, airports and other suppliers. However, Mr Fernandes is keen to be more than just a flamboyant entrepreneur. “I am there at 2am studying the plane's engines. I know the price of every part,” he says. Guided by his operations chief Conor McCarthy, pinched from Ryanair, Mr Fernandes is obsessive about costs.

Low-cost carriers require such obsession. Drew Magill, director of market analysis at Boeing Commercial Airplanes, estimates that low-cost airlines earn around 45% less revenue per mile than full-service airlines (which can charge more for long-haul flights) and so need 50% lower costs. AirAsia achieves this by taking bookings via the internet rather than through travel agents; charging for meals; and having only one type of aircraft—Boeing 737s—to save on training overheads. The crew help to clean the aircraft to shorten turnaround times. But Mr Fernandes has gone much further, persuading his pilots, with whom he regularly shares the company profit-and-loss account, not to take off at full throttle and to fly their aircraft to cruising altitude immediately—saving some 26% on fuel costs, an airline's second biggest overhead. At 2.5 American cents per available seat-kilometre, AirAsia's operating costs are the lowest in the industry, calculates UBS.

Mr Fernandes's biggest challenges will be to manage growth, and to avoid both a destructive price war and the temptation to enter markets with fundamentally different economics, such as long-haul flights. For now, his lead over competitors looks unassailable. For Mr Fernandes, at least, flying should remain fun.

His long-distance targets include India, the country he traces his roots to, and Asia's other colossal market, China.

In person Fernandes appears surprisingly relaxed considering he's in charge of the most successful low-cost carrier in the region.

He comes across as affable rather than driven, more gracious than commanding, and surprisingly direct.

Tell us a little bit about your background.

My parents are both Indian, but I was born in Kuala Lumpur and studied in England where I did accountancy at the Epsom Business School and then went to the London School of Economics.

You started out in the music industry, right?

Well, I worked in an accountants firm for five months and then joined Virgin Records.

I've always been crazy over music and own at least 8,000 CDs.

My Mum used to play the piano, jam with musicians, and I grew up [listening to] Ray Charles, the Supremes and so many other great artists.

When did you get your big break?

When I did a report for the chairman about why a certain artist was not selling. He thought it was the best report he had read. I was sent to Malaysia and became managing director within six months.

I even worked for a while in Mumbai [Bombay] while handling the South Asian market, and set up licences, etc. I became good friends with many film stars like Shah Rukh Khan and Salman Khan!

When did your interest in aviation begin?

I always loved planes and in business school used to spend hours watching the planes flying overhead. From the time I was a young boy I had this yearning to own an airline, which everyone thought was stupid!

When did you begin pursuing this dream?

When I peaked at 36 years [of age] in the music industry, I decided to change track. That was when I saw the Easy Jet ad on TV, and called up my wife. The rest is history. I still maintain that I know more about music than aviation.

Many accuse you of using your connections to reach your goals.

I met Malaysian Prime Minister Mahathir [Mohamad] once and Thai Prime Minister Thaksin once, to explain my goals. They gave me an opportunity and I took it.

But I slogged to put it all together. Since we book by Internet, Shin Corp, with its good telecom structure, is good for us in Thailand.

Nothing has been easy for us. Singapore Air ridiculed us, Malaysian Air tried to obliterate us. It was so tough for us to get even a booth in Bangkok [International] Airport.

How important is Bangkok to your business strategy?

It's far exceeded our expectations and looks like it's going to become our most important hub. There's no doubt that Bangkok is the centre of Asean tourism and that's why we're here. Our policy is to make flying democratic, so that everyone can fly.

But you're going to be facing increased competition from new budget upstarts, are you ready?

We relish it, whether they are tigers, lions, monkeys, birds!

What is most central to your success?

My staff are my greatest asset. I know every one of them by name and we all share the same passion (not just for music but also for flying). I pay them well and we're transparent. We close our booth at midnight and have meetings after that. We discuss everything - our low and high points. There have been few low points till now.

What are the high points?

Our commitment, service, motivation. The red colour of the staff's uniform stands for our energy. We have zero debts. We made US$5 million [Bt200 million] last year and will make $25 million net this year.

What is your philosophy?

Believe the unbelievable. Dream the impossible.

And your other interests?

Cricket, football and of course music. I like to dress casual. I love Thai food. I have a wife and kids, but I've yet to take a holiday with them!