Relax - Low-cost AirAsia en route to the US?

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Low-cost AirAsia en route to the US?

my paper | Wed, Jan 27 2010

The company is negotiating with the authorities in Los Angeles, New York, San Francisco and Oakland to add services to the US as early as next year.

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ON A sultry night, Kuala Lumpur’s rooftop Luna Bar throbs with dance music as an overflowing crowd takes in the view of the Malaysian capital’s Petronas Twin Towers.

Champagne corks pop as men in suits mingle with women in little black dresses, joined by American football players and cheerleaders.

The scene is from a party held last June for AirAsia X, the long-haul unit of low-cost carrier AirAsia, a company that, in eight years, has grown from a two-plane start-up to South-east Asia’s biggest budget airline, Bloomberg Markets magazine reported in its issue for next month.

In the midst of the hubbub, AirAsia chief executive officer Tony Fernandes toasts his company’s sponsorship of the Oakland Raiders, three-time National Football League Super Bowl champions. Next to the outdoor pool, Mr Fernandes – dressed in a black Raiders T-shirt and his trademark red AirAsia cap – dances with three Raiderette cheerleaders.

“This is what AirAsia is all about,” Mr Fernandes, 45, says, sipping a glass of rum and Coca- Cola.

AirAsia X does not even fly to Oakland, California, and few Malaysians follow United States football. “We always disrupt, innovate and do something that no one ever thought of – and sponsoring an NFL team is all about becoming a global brand,” he adds.

He declines to say how much the airline will spend on the multi- year sponsorship.

The British-educated man is following in the footsteps of Virgin Group founder Richard Branson and EasyJet’s Stelios Haji-Ioannou, the British aviation entrepreneurs who built underdog empires to compete with state-run rivals.

AirAsia and its subsidiaries flew more than 24 million passengers last year, compared with 20,000 in 2001, mostly to destinations that are within a few hours’ flight time from Kuala Lumpur – such as Singapore, Thailand, Indonesia and Vietnam.

Mr Branson, 59, who founded Virgin Atlantic Airways and employed Fernandes in the 1980s, holds a 16 per cent stake in AirAsia X.

He says he is proud of his protege.

“I am flattered that people should call him the Richard Branson of Asia. He’s built a great airline that has transformed millions of people’s lives by enabling them to travel affordably.”

In 2007, Mr Fernandes started privately held long-haul carrier AirAsia X, which flies from its Kuala Lumpur hub to Australia, China, the United Arab Emirates and the United Kingdom.

He says AirAsia X will probably begin flying to Mumbai, New Delhi and Seoul in the second half of this year, and the company is negotiating with the authorities in Los Angeles, New York, San Francisco and Oakland to add services to the US as early as next year.

AirAsia’s dreams to become a global, no-frills, long-haul brand may be difficult to fulfil.

Says Mr Douglas McNeill, an airline analyst at Astaire Group in London: “What Mr Fernandes has in mind is something for which no precedent exists.

“Building a genuinely global brand is something that many airlines talk about, but it’s not something anyone has really managed to do.”

Mr Fernandes uses a mountain bike to get around AirAsia’s headquarters at the Low Cost Carrier Terminal outside Kuala Lumpur. Ground staff members in orange jumpsuits mingle with office workers who wear slacks and T-shirts in the cafeteria.

“It’s the corporate culture.

It’s about breaking down invisible walls,” he says.

“Seven years ago, we would never have dreamed of sponsoring an NFL team. So it goes – dare to dream, dream the impossible and never take ‘no’ for an answer.”

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