AirAsia Group CEO Tony Fernandes shares his views on his company’s Indonesian unit and his business strategy.Once an ailing airline struggling with debt, Malaysia-based budget carrier AirAsia has successfully transformed itself to become one of the most successful airlines in the region while working to achieve its noble vision: democratising air travel by offering low fares and high quality service. Despite a market slowdown, AirAsia has so far become the world’s best-performing airline stock this year.
In Indonesia, the company manages two units – Indonesia AirAsia (IAA), which operates a fleet of 29 Airbus A320s, and Indonesia AirAsia X, the country’s first long-haul, low-cost carrier – and has become a serious competitor for major local low-cost airlines, including Lion Air and Citilink. Last week, AirAsia Group CEO Tony Fernandes invited The Jakarta Post’s Farida Susanty to his office in Kuala Lumpur to discuss the company’s business strategy, his vision for the company’s Indonesian units and his response to the recent launch of the world’s biggest alliance of low-cost airlines to challenge the company’s stronghold in the business. The following are excerpts of the interview.
You keep saying that Indonesia is more than just Bali. How do you envision the country’s aviation industry in the next few years?
Tony Fernandes: We want to invest more in Indonesia. That’s why we’re after a change in Indonesian regulations. We think that domestic flights are already well-covered as Citilink, Lion Air and Sriwijaya Air are doing a good job. We also contribute a little. However, our strength is in international flights and this is the reason why our international flight to Bandung West Java, Indonesia’s fourth most-populous city is always full. No one flew to Bandung before us. So we want to do more Bandung [flights]. We have 55 million international passengers that we can bring to Indonesia. So, what do we need? Well, we need the regulations on ownership to change. We would like taxes for leasing and fuel to be more market-driven. We would like the Indonesian government to look at smaller airports. I said to the Indonesian government, for small airports that have no international flights, why don’t they bring down the charges for airlines, so at least we can try some direct flights from Thailand, Malaysia, Singapore or even China?