‘Swap gave me lots of energy’
In The Edge Financial Daily Today 2012
Written by Isabelle Francis
Friday, 15 June 2012 14:45
SEPANG: Tune Air Sdn Bhd shareholder and AirAsia group CEO Tan Sri Tony Fernandes said the aborted share swap with Khazanah Nasional Bhd gave his budget airline a much-needed wake-up call. As he bluntly puts it, the deal was a “kick up my backside”, and made him realise how crucial it was for his airline to get its edge back.
The aborted deal also gave him the opportunity to meet face-to-face with his detractors at Malaysian Airline System Bhd (MAS) and give them the opportunity to get to know him.
His biggest regret: not being able to complete the job of turning around MAS.
He said now that the swap has been unwound, both airlines have agreed to continue to collaborate in certain areas including training and procurement. He sees no benefit in any firm partnership because of the continuous resistance from MAS employees.
“We [MAS and AirAsia] have not met since the un-swap. Collaborating in the area of training makes complete sense, but there was massive resistance from pilot management, so we moved on. You reach a point of why waste time talking?” he told The Edge Financial Daily in a recent interview.
Fernandes also said AirAsia is highly unlikely to send its aircraft to MAS’ engineering unit for heavy maintenance.
“There’s just a headache for the MAS management to have anything to do with AirAsia. It’s MAS’ loss. Plus, it was not part of the four areas of collaboration to begin with,” he said.
Here are excerpts from the meeting with the AirAsia boss.
TEFD: What now, since the swap turned sour?
Fernandes: The share swap has given me a lot of energy. Sometimes you need a bit of kick up your backside. When we have built fantastic operations at AirAsia, we didn’t appreciate it until we [saw] something else.
I thought if I put in the same energy [put] in MAS into the regional development, the potential is enormous. Ten years doing this, sometimes you lose a bit of your edge. The share swap and ... un-swap, woke me up to the potential of AirAsia, gave me a new lease of life. The future is really good for us.
Were MAS’ problems too big to be fixed?
No. Could have been fixed. If you look at what SIA is doing, they talk about SilkAir. You look at what Qantas was doing with Emirates ... everything is laid out for MAS. The people I feel sorry for are the staff. Yes, there would have been a short-term pay.
You have to make the business successful, you can’t be on a life support system like sukuk or WAUs [widespread asset unbundling] or whatever forever. That has to stop at some stage. The ideas that we have put in would have transformed the airline into a profitable venture. The unions say they are not against change but dislike change being bulldozed without proper engagement ...
I can’t comment because I am not an executive. But what I can say about my style is ... If I dare say, I am the best engager of any CEO in Malaysia. I know the guy who carries my bag. But I wasn’t the CEO of MAS. I disagree with the statement because whatever you put in front of the unions, they don’t want change. There are arguments about why they stopped Buenos Aires, which was losing hundreds of millions of dollars. When you have that level of thinking, how can you implement change?
What’s your biggest gain, and biggest loss from the swap?
The biggest gain is that I have made friends with Khazanah and now I can pick up the phone and call AJ [Ahmad Jauhari Yahya, MAS CEO]. I made friends in MAS. I certainly couldn’t do that before. The biggest gain is that people who used to have a negative view of me have begun to see the real me.
My biggest regret is that we didn’t finish what we set out to do. That is not monetary, that’s nothing. As Malaysians, Din [Datuk Kamarudin Meranun, co-founder of Tune Group with Fernandes] and I could have done a lot for MAS. We did it for AirAsia, which was harder. Surely we could have done it for MAS. I’m not someone who cries over the past and I have taken out the positives over this deal.
Although the swap is off, the collaboration with MAS is still intact. What’s the progress?
MAS came the other day to say they are removing 50 Indian cabin crew and asked whether we can take them. So we did. That’s one part of the collaboration. We are growing. So, if cabin crews are mobile, we can absorb some, but not all.
We have not moved on the other areas of collaboration as yet.
How was it working with Danny (Mohammed Rashdan Yusof, deputy CEO of MAS)?
He is a decent guy. Don’t forget that Danny was the guy who tried to destroy us (AirAsia) at Binafikir [Sdn Bhd]. People say he doesn’t have the personality to make people warm and fuzzy, but he worked very hard to do his job.
Do you still have free first class tickets on MAS...?
I gave them back. I wrote to the chairman to say I’m returning the tickets.
With AirAsia’s regional plans, will Tune Air continue to own 23% of AirAsia?
Yes, thank God. That’s better than only 13%. Can you imagine looking at MAS’ share price [after the swap when Tune Air owned 20.5% equity interest in MAS]? It was a nightmare. I was off blood pressure pills as soon as the swap was off. I’m serious.
This article appeared in The Edge Financial Daily, June 15, 2012.