The Aviator

11 minute read

A childhood friend recently returned to Tony Fernandes his old tuck box—a chest containing his belongings from his five years of boarding school. On its surface, still, were three stickers: one for the West Ham soccer club, one for the Williams Formula One racing team, one for the Australian airline Qantas.

Nearly four decades on, Fernandes could reflect on three childhood dreams fulfilled. He does not own West Ham, but he bought the club’s erstwhile Premier League rivals Queens Park Rangers in 2011; until last summer he owned the Caterham Formula One team; and, most important, his no-frills airline, AirAsia, is a market leader boasting some 17,000 employees. “Dreams do come true,” he tells TIME, sporting the suit-jacket-over-T-shirt-and-jeans look that only men worth over half a billion dollars can pull off. “If I get hit by a bus tomorrow, not many people can say they’ve done the things I’ve done.”

Fernandes is a curious mix of gushing sentimentality and hard-nosed pragmatism. In 2001 he bought a creaky Malaysian state air carrier for a token 1 ringgit (around 26¢ at the time). AirAsia then had just two aging planes and $11 million in debt. Despite the cold post-9/11 marketplace, Fernandes turned the business around rapidly and posted a profit in his second year. He streamlined the unwieldy corporate structure and introduced a steeply gradated pricing scheme, trumpeting the lowest promotional fares in a bold advertising campaign.

Today, AirAsia is ubiquitous across the world’s largest continent, boasting 199 aircraft flying over 200 flight routes between 22 countries. It has been voted the world’s best low-cost carrier seven years running by aviation-rating service Skytrax and has flown over 300 million passengers, many of whom might never have flown before. “AirAsia’s timing and strategic positioning were impeccable,” says Brendan Sobie, chief analyst for CAPA Centre for Aviation. “It provided a new low-fare option for Southeast Asia just as the region was on the cusp of rapid economic and middle-class growth.”

AirAsia charms customers through its lack of pretension. While other airlines strive (and usually fail) to mimic the comforts of a five-star hotel, AirAsia succeeds at a pretty honest impersonation of a supermarket café. The company’s aircraft boast colossal murals for Queens Park Rangers or the Asian incarnation of The Apprentice, in which Fernandes stars in the Donald Trump role. (The second season is slated to start filming in October.) Overhead lockers are slathered with advertising for partner companies like the telecom firm Vine. The bland Muzak of state-run carriers is replaced by a medley of Taylor Swift and Eminem, and the Chainsmokers’ pumping dance anthem “#SELFIE” segues into the roar of Rolls-Royce jet engines.

The new headquarters of Fernandes’ Tune Group—which now dabbles in everything from hotels and insurance to prepaid SIM cards and education—echoes this corporate casualness. The Tune Talk office, to pick one, is littered with beanbags and boasts a chill-out room with a flat-screen TV. Shoes must be removed at the door. There is a punching bag for stress relief, while outsize logos of competitors adorn the meeting rooms, “to keep reminding us who we have to beat,” says one employee, grinning.

It’s a major departure from typical Asian companies where hierarchy and bureaucracy can choke innovation. “Air­Asia is a meritocracy; we’re very flat-structured­,” says Fernandes. “We’ve had boys who carried bags who are now captains, and check-in staff who are CEOs.”

It was fairy-tale stuff until Dec. 28. Flight 8501, run by AirAsia’s Indonesian affiliate, crashed into the Java Sea en route from Surabaya to Singapore. All 162 passengers and crew were lost. Describing the tragedy as “my worst nightmare,” Fernandes was at the scene within hours and earned plaudits for heartfelt tweets to his million followers and personal consoling of the bereaved.

The tragedy came at a fraught time for carriers from Southeast Asia. First, Malaysia Airlines Flight 370 vanished on March 8, 2014, with 239 people aboard, and then the same carrier’s MH 17 was shot down over war-torn eastern Ukraine; all 298 aboard died. On July 29, a flaperon likely to be from MH 370 washed ashore on French-administrated Réunion Island in the southwest Indian Ocean, perhaps the first conclusive evidence that the jetliner had indeed crashed. (On Aug. 16 a small local Indonesian flight crashed in remote Papua province.)

A final report on why AirAsia’s Flight 8501 came down is due this month. Fernandes hopes that unraveling the causes of these disasters will help repair the image of airlines, especially low-cost ones, which was further tarnished by the apparently deliberate crash of Germanwings Flight 9525 in the Alps on March 24. Critics have equated the bargain fares and brash advertising campaigns of the budget airlines with a lack of professionalism—a perception Fernandes contests. “It makes no sense,” he says. “Whether you’re a low-cost or full-service airline you’re controlled by the same regulator.” Fernandes points to Irish budget carrier Ryanair, by far the world’s most flown international airline last year with 81.3 million passengers, but one that has yet to have so much as a serious passenger injury. “The business model does not make any difference to safety,” he says.

It’s not quite that simple. Each nation has its own air-travel regulator, and the International Civil Aviation Organization rates them in category one, which meets international standards, or category two, which does not. So while AirAsia flights operating out of Malaysia or Singapore will be ranked category one, those run by its Indonesian affiliate are ranked two. “Different national regulators have different requirements and capabilities to ensure safety,” says Michael Daniel, an international aviation-safety consultant with more than three decades’ experience at the U.S. Federal Aviation Administration. “I feel safer flying on airlines that meet international standards.”

Fernandes’ disarming English estuary accent reflects his own international pedigree. Born in Kuala Lumpur in 1964, just one year after the nation-state of Malaysia was established, he fondly recalls plane-spotting as a child with his doctor father, and continuing this obsessive hobby in Britain while at the Epsom boarding school. (His mother was a music teacher who grew relatively well-to-do by peddling Tupperware.)

Fernandes loved Epsom, set in an archetypical redbrick English manor house built in 1853 amid palatial grounds just south of London, and played plenty of rugby, soccer and cricket. The experience also planted seeds for one of his later business endeavors. “I remember calling my mom during half-term and asking to come home to Malaysia, but she said it was too expensive,” Fernandes recalls. “I thought then that one day I’d make it cheap to fly.”

It was clearly a memory that stuck. When AirAsia finally did start flying long haul, first to Australia and China, Fernandes personally shunned those new routes until the London service was launched in March 2009. Only then did he reserve himself a seat to Kuala Lumpur, ordering a cab to collect him from Epsom, just as he’d craved some 28 years earlier. “It was very emotional,” he says. “The only difference was we flew from Stansted rather than Heathrow.”

But then there is the pragmatism. That cherished London route was shuttered within three years because of high taxes and fuel prices. Fernandes may be a music-loving sports fanatic, but he has an accountant’s ­discipline—he studied the subject at the ­London School of Economics (LSE). Under his stewardship, revenue increased from $41 million in 2001 to $1.3 billion last year.

In a June 10 report, Hong Kong–based GMT Research claimed that AirAsia uses transactions with associate companies to boost its recorded profits to make the company appear more favorable to investors. Shares of AirAsia have since plummeted, halving in value from a high in January. “Real profits have collapsed, and AirAsia needs a recapitalization­,” said GMT Research founder Gillem Tulloch in a statement. Fernandes calls the report “rubbish” and insists his business is sound. “You can’t run away from numbers,” he says. “No matter what your industry, it’s all about maximizing the top line, minimizing costs, then marketing your product.”

Marketing is where AirAsia unquestionably excels, with expertise Fernandes gleaned from the cutthroat music industry. The owner of some 14,000 albums—including by artists as obscure as the Hungarian electronic outfit Neo—Fernandes­ still describes music as his “first love.” After graduating from LSE, he got his start at Richard Branson’s Virgin group, and later became Southeast Asia vice president of Warner Music, before quitting to pursue his fledgling airline business amid the ill-fated AOL merger (which then included TIME’s parent Time Inc., now a stand-alone listed company). “Marketing in the music industry is the hardest thing in the world, as you’re not just marketing an artist these days but a song, and there are thousands of songs out there,” he says. “So when I came into the airline business, I thought, This is easy.”

Easy does not mean flawless. Shortly after MH 370 went missing, the new AirAsia inflight magazine was published containing an unfortunate boast: “Rest assured that your captain is well prepared to ensure your plane will never get lost.” Fernandes immediately tweeted an apology and withdrew the issue, which was printed long before MH 370 disappeared.

Fernandes pins his ambitions to the aspirations of Southeast Asia’s burgeoning middle classes. With a promise of “Now everyone can fly,” which is Air­Asia’s slogan, he shunned the conventional wisdom that had airlines pandering to regional superpowers India and China—sharing a third of the world’s population between them—and instead homed in on the forgotten 600 million people sandwiched between. He saw that this poorly connected hodgepodge of tourist-friendly archipelago nations like Indonesia and the Philippines that ring the vibrant Greater Mekong region was crying out for cheap air travel. Whereas state-owned carriers typically link capitals, entailing inconvenient transfers for those living elsewhere, AirAsia looks at where customers are and where they want to be—launching­ obscure but popular routes between the populous Indonesian cities of Medan and Yogyakarta, for example.

The 10 members of the Association of Southeast Asian Nations, or ASEAN, have plenty going for them: cheap labor, bountiful natural resources and an enviable geographical position. While the grouping’s aim to forge a single economic community won’t be easy to achieve, if tariffs are reduced and regulations streamlined, the subsequent business boost would profit AirAsia too. “The economic union will be a success, but there will be a lot of powerful lobbies who don’t want to open up their markets,” says Fernandes. “It’s not going to be perfect.”

Even less perfect are the many ASEAN members that have regressed on democracy and human rights. Cambodia is rife with egregious abuses. Burma has elections in November, but opposition leader Aung San Suu Kyi is barred from the nation’s highest office, and tens of thousands of stateless Rohingya Muslims currently fester in squalid displacement camps, deprived of adequate food and medical care. Junta rule remains entrenched in Thailand following last year’s military coup.

Fernandes’ home country of Malaysia, a strategic partner of the U.S., also faces criticism. Opposition leader Anwar Ibrahim is serving five years in prison for sodomy charges deemed politically motivated by groups such as Amnesty International and Human Rights Watch. On the day TIME met Fernandes in Kuala Lumpur, the outspoken cartoonist Zulkiflee Anwar Ulhaque, better known by his nom de plume Zunar, appeared in court to answer nine counts of sedition, a colonial-era charge that is increasingly being deployed to quash dissent. Fernandes says Malaysia could do with better leadership in business and politics. “There are people who fail in Malaysia but who are still considered for top jobs,” he says, “If I fail at AirAsia, I’m out. I did fail at Caterham, and I was out.” (After four years of spiraling costs, he sold the team to a Swiss and Middle Eastern consortium without having won a point.)

Fernandes’ next goal is a return to Europe and routes to North America. But he is also thinking beyond his airline. Nestled in that old tuck box, alongside the packets of fiery instant noodles “that were a must for any spice-deprived Asian kid,” was a cassette of 1970s British rock group Electric Light Orchestra. “I would love to get back into the music game,” says Fernandes, “maybe on the board of Warner Music. That would be a dream.” Says the man whose dreams do come true.

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Write to Charlie Campbell / Kuala Lumpur at