Air Asia: CEO Tony Fernandes Pledges To Focus On Airline Business Again To Improve Performance

Air Asia Boss Tony Fernandes has pledged in an interview this weekend that he will focus more intensely on the airlines business again after he admittedly paid too much attention to other business ventures in the past few years.

Air Asia CEOThe past two years were difficult times for the Air Asia group of companies after one of their planes crashed and business performance started to slide.

CEO Tony Fernandes who purchased the indebted airline in 2001 for a symbolic value of 1 Malaysian Ringgit grew the budget brand into many different Air Asia brands all over Asia and also spun off companies such as Tune Hotels admitted that his primary focus was not always on the airline which might have impacted it’s business performance.

Fernandes ventured out into a U.K. football team and Formula One racing team mentioned that he grew tired of the airline business and started to focus on his other enterprises which eventually hurt the airline as it was missing his creative input.

Mr. Fernandes gave these statements in an interview with The Sunday Times (access here).

Flight QZ8501’s crash and other internal matters prompted Tony Fernandes to become a hands-on boss again.

He admits he took his eye off the ball: in hindsight, a bad move. And the airline empire he had created from practically nothing paid the price, said AirAsia boss Tony Fernandes.

“I was getting a bit tired (of running the airline) so I backed off, watched football and did all those other things. I was on my way to retirement,” he said. …

His ventures made him an international face and AirAsia, a global brand. “I don’t regret it but from AirAsia’s perspective, it wasn’t the best thing to do. The airline suffered from the lack of (my) attention” Mr Fernandes said.

He added in his typical unabashed manner: “When you have a very strong leader, which I am – not to say I am a good leader but a strong personality – and then you disappear, all the little Napoleons become much stronger and they all try and fight each other and we become disharmonious.”

It’s obviously not good if an owner remains technically the CEO of a company and isn’t really following the day to day business and operational management. There is only so much time of which a company can function with an absentee CEO, especially if said company lived off this persons creative input and philosophy. It’s like Richard Branson would leave Virgin and Steve Jobs left Apple and the company would go on autopilot for an indefinite period.

In the case of Air Asia, the crash of OZ8501 in December of 2014 woke everybody up again. And then it was 2015 already which brought more problems for the airline group including allegations that the company was ‘cooking the books’ (LoyaltyLobby reported about it here). Other reports said that Thai Air Asia was the only profitable airline of the whole group by the third quarter of 2015.

Fernandes continued in the interview:

“QZ8501 gave me a big impetus to try and make things better,” he said.

A few years before the tragedy, the most devastating in AirAsia’s 14-year history, he had decided to take a back seat and leave the day-to-day running of the group to the different country heads and other senior management at its Kuala Lumpur head office.

But the 2014 crash and other internal matters have put him firmly back in the captain’s chair.

Mr Fernandes said: “A leader needs to know when to step down. Sometimes, people overstay because they like the attention. I don’t need my ego massaged. At the moment, I think I’m still effective but the time will come to go,” he said, revealing that he already has a successor in mind.

Who? He did not say.

It’s understandable when a founder of a company wants to venture out and follow different interests for a while but in this case usually an interim CEO or Managing Director is appointed which was apparently not the case with Air Asia as Fernandes kept his positions without being involved in the way he used to be.

Conclusion

I think Air Asia is a good company with a well rounded product. Tony Fernandes deserves credit for fessing up to the fact that he somewhat neglected his position, not many managers and owners would expose themselves in such a manner.

In any way I hope that he will be able to steer the Air Asia Group into clear waters again as the region still has a massive growth in air traffic and market share is available to be picked up.

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