1.

0 Introduction
1.1AirAsia
AirAsia was established in 1994 and began operations on 18 November 1996. It
was originally founded by a government-owned conglomerate, DRB-Hicom. On 2
December 2001, the heavily-indebted airline was bought by former Time Warner
executive Tony Fernandes' company Tune Air Sdn Bhd for the token sum of one ringgit
(about USD 0.26 at the time) with USD 11 million (MYR 40 million) worth of debts.
Fernandes turned the company around, producing a profit in 2002 and launching new
routes from its hub in Kuala Lumpur, undercutting former monopoly operator Malaysia
Airlines with promotional fares as low as MYR 1 (US$0.27). In 2003, AirAsia opened a
second hub at Senai International Airport in Johor Bahru near Singapore and launched
its first international flight to Bangkok.
AirAsia has since started a Thai affiliate, added Singapore itself to the destination
list, and started flights to Indonesia. Flights to Macau began in June 2004, and flights to
mainland China (Xiamen) and the Philippines (Manila) in April 2005. Flights to
Vietnam and Cambodia followed later in 2005 and to Brunei and Myanmar in 2006, the
latter by Thai AirAsia. In August 2006, AirAsia took over Malaysia Airlines's Rural
Air Service routes in Sabah and Sarawak, operating under the FlyAsianXpress brand.
The routes were subsequently returned to MASwings a year later, citing commercial
reasons.
At the end of 2006, Fernandes unveiled a five-year plan to further enhance
AirAsia's presence in Asia. Under the plan, AirAsia proposed strengthening and
enhancing its route network by connecting all of its the existing destinations throughout
the region and expanding further into Vietnam, Indonesia, Southern China (Kunming,
Xiamen, Shenzhen) and India. Through its sister companies, Thai AirAsia and
Indonesia AirAsia, the plan called for a focus on developing its hub in Bangkok and
Jakarta. With increased frequency and the addition of new routes, AirAsia increased
passenger volume to 13.9 million in its 2007 fiscal year.
An AirAsia A320 with the Malaysian flag on the tail and Cartoon drawings on the
fuselage.
On 27 September 2008, the company announced 106 new routes to be added to its
then-current list of 60. The number of old routes discontinued has not been publicly
disclosed.
In August 2011, AirAsia agreed to form an alliance with Malaysia Airlines by
means of a share swap. The alliance was struck down by the Malaysian government, in
effect voiding the agreement of both airlines.
By early 2013, AirAsia saw a steep increase in its profitability. The year-over-year
comparison had shown a 168% increase in profits versus the same period in 2012. For
the quarter ending 31 December 2012, the airline's net profit stood at 350.65 million
ringgit (US$114.08 million). Despite a 1% rise in the average fuel price, the airline
recorded profits of 1.88 billion ringgit for its full 2012 fiscal year.
In February 2013, AirAsia submitted an application to the Indian Foreign
Investment Promotion Board, through its investment arm, AirAsia Investment Limited,
to seek approval for commencing its operations in India. AirAsia asked to take a 49%
stake in the Indian sister airline, which was the maximum allowed by the Indian
government at that time. Initially, AirAsia committed to invest up to US$50 million in
the new airline. Operations would begin in Chennai, expanding its network throughout
South India, where AirAsia already operates flights from Malaysia and Thailand.
http://en.wikipedia.org/wiki/AirAsia

2.0 Tony Fernandes
Tony Fernandes was born on 30 April 1964 in Kuala Lumpur to an Indian father who
was originally from Chennai, India and a Christian Eurasian mother of mixed
Portuguese and Malaccan descent. He was educated at Epsom College from 1977 to
1983 and graduated from London School of Economics in 1987. He had
worked briefly with Virgin Atlantic as a Financial Controller. He was also the
youngest CEO to lead the Warner Music Records (Malaysia) before deciding to set up
Tune Air Sdn. Bhd. and ventured into the airlines business. Fernandes initial intention
during his meeting with the then Prime Minister, Tun Dr. Mahathir Mohamad, in June
2001 was to get the prime ministers official endorsement to become a new operator
in the Malaysian aviation industry (Ismail, 2010).
At the time of the meeting, Fernandes had already registered a company called
Tune Air Sdn. Bhd. in Kuala Lumpur with three other partners. Instead of issuing a
new license, Mahathir suggested that Tune Air could acquire an airline by taking over
the ailing AirAsia, a sister airline of Malaysias national carrier, Malaysia Airlines,
that was set up to cater flying domestic routes not serviced by the national carrier.
Mahathir felt that the needs of the Government and Fernandes ambition were deemed
to be suitable and a good match at the time. Fernandes had reinvented and remodelled
AirAsia based on the highly successful Irish budget airline, Ryannair. It targeted
millions of Asians who had never flown and wanted inexpensive basic transportation,
fitting well with its slogan of Now everyone can fly. As a Low-Cost Carrier,
AirAsia imposed major cost-cutting measures such as using a single type of aircraft,
online and paperless ticketing to eliminate travel agents commission, charging for
in-flight meals and seating, reducing turnaround time on the ground and ensuring
frequent flights. By the year ended 30
th
.
June 2006, AirAsia had served 65 cities and carried 9.3 million passengers
(Ismail, 2010). Fernandes is now running a profitable enterprise, a remarkable revival
of the loss making state-owned enterprise that he took over from the Malaysian
Government.
2.1 Tony Fernandes in Position Held
He subsequently became the South East Asian regional vice-president for Warner
Music Group from 1992-2001. When Time Warner Inc announced its merger with
America Online Inc., Fernandes left to pursue his dream of starting a budget no-frills
airline. However, his application for a license from the Malaysian government was
rejected.

It was through Datuk Pahamin A. Rejab, the former secretary-general of the
Malaysian Domestic Trade and Consumer Affairs Ministry that Fernandes got to meet
up with the then Prime Minister, Tun Dr. Mahathir Mohamad in October 2001. The
wily Malaysian prime minister had a cropper in his hand, which he had been trying to
unload for nearly two years.

AirAsia, the heavily-indebted subsidiary of the Malaysian government-owned
conglomerate, DRB-Hicom, was losing money big-time. Instead of starting from
scratch, Mahathir advised Fernandes to buy an existing airline instead. Fernandes
mortgaged his home and sank his savings to acquire the company, comprising two
ageing Boeing 737-300 jets (9M-AAA and 9M-AAB) and USD$11 million (RM40
million) worth of debts, for 26 US cents (one ringgit), and transformed it into an
industry player.

Coming just after the September 11, 2001, undoubtedly the worst day in the history of
commercial aviation when nobody wanted to fly, everyone thought that Fernandes had
gone "crazy", predicting that the company would fail miserably. Yet, just one year
after his takeover, AirAsia had broken even and cleared all its debts. Its initial public
offering (IPO) in November 2004 was oversubscribed by 130 per cent.

Fernandes says his timing was in fact perfect: Since September 11, 2001, aircraft
leasing costs were down 40%. Also, airline lay-offs mean experienced staff were
readily available. He believed Malaysian travellers would embrace a cut-rate air
service that will save them time and money, especially in a tight economy. That was
why he copied one of the world's most successful no-frills carriers, Ryanair out of
Ireland (which in turn is modelled after Southwest Airlines in the United States).
Fernandes reckons that about 50 per cent of the travellers on Asias budget airlines are
first-time flyers. Before AirAsia, he estimates that only six per cent of Malaysians had
ever travelled in a plane.

In 2007, Tony Fernandes has again created a "first" in Asia by starting a hotel chain,
Tune Hotels which is based on the no-frills concept. The first Tune Hotel was opened
at the intersection of Jalan Sultan Ismail and Jalan Tuanku Abdul Rahman in the heart
of Kuala Lumpur. Expansions are in the works as more hotels will be opened up
throughout Malaysia.
TAN SRI DR. TONY FERNANDES has a personal credo - "Believe the
unbelievable. Dream the impossible. Never take no for an answer." He studied at
Epsom College, UK, and the London School of Economics and qualified as an
Associate Member of the Association of Chartered Certified Accountants in 1991. He
became a Fellow Member in 1996. He was admitted as a member of the Institute of
Chartered Accountants in England and Wales (ICAEW) in 2008.

Tony has been the Group CEO of AirAsia since December 2001. Prior to AirAsia, he
was the Financial Controller of Virgin Communications London before joining Warner
Music International London in 1989. He was promoted to Managing Director, Warner
Music Malaysia in 1992 and to Regional Managing Director, Warner Music South East
Asia in 1996. In 1999, he became the Vice President of Warner Music South East Asia.
Tony's many awards include: Honor of the Commander of the Order of the British
Empire, conferred by Her Majesty Queen Elizabeth II in 2011 for services to promote
commercial and educational links between the UK and Malaysia. In 2010, the French
government had conferred on him the award of Officer of the Legion d'Honneur, the
highest award that can be conferred on a non-French national.
He was named as one of the world's 100 most creative people in business for 2011 by
New York-based business magazine Fast Company, and awarded the Inaugural Travel
Business Leaders Award winner by CNBC.
http://www.airasia.com/my/en/about-us/ir-directors-biography.page
http://www.scribd.com/doc/34150260/Dato-Tony-Fernandes-Biography

















2.2 Tony Fernandes in Responsibilities
2.2.1 Approach, Attitude and Behavior

Chosen Right Approach
With the 11th September 2011 disaster, this event was said to be the worst day in the
history of commercial aviation, people were afraid to travel by air. At that point of time,
setting up an aviation business was totally ridiculous decision. But, on the point of an
entrepreneur, crisis creates opportunity, and Tony Fernandes had proved it by
proceeding to set up AirAsia in 2001. Tony Fernandes turned the company around,
producing a profit in 2002 and launching new routes from its hub in Kuala Lumpur,
undercutting former monopoly operator Malaysia Airlines with promotional fares as
low as MYR 1 (USD 0.27). He had pay the responsibilities for chosen the right
approach to prevent from failure in his business.

Having Good Attitude
An entrepreneur assembles and then integrates all the resources needed - the money, the
people, the business model, the strategy and the risk-bearing ability to transform the
invention into a viable business. Tonys persistent and intent in going through the
motion was setting up AirAsia in this time and epitomizes his attitude towards
achieving his vision of low cost air travel. Tony Fernandes says his timing was in fact
perfect: Since 11 September 2001, aircraft leasing costs were down 40%. Also, airline
lay-offs mean experienced staffs were readily available. He believed Malaysian
travellers would embrace a cut-rate air service that will save them time and money,
especially in a tight economy. His having a attitude to see the positive side instead of
negative side of the September 11th crisis and make the business successful had proven
his entrepreneur instincts. He were pay the responsibilities for doing the right thing
with his attitude.
Having Good Behavior
The self-confidence, energy flexibility, risk taking and opportunism associated with
entrepreneurial behaviour suggests that entrepreneurs are individuals who are
accustomed to getting involved and that they expect positive results from their
involvement. Tony Fernandes is a big believer of big dreams. Many people would
think that he was crazy when he decided to mortgage his house and shrank his saving to
buy a debt riddled airline. But, with the behaviour of an entrepreneurship, he had pay
the responsibilities and proved to everyone that what he believed in is right and
achievable with his good behavior.

























2.2.2 Incidents and accidents
1.On 10 January 2011, AirAsia Flight 5218 skidded on the runway whilst landing.
The incident occurred around 10:15pm during a heavy downpour. Four passengers
were rushed to Sarawak General Hospital, believed to have suffered from health
complications.
2.On 3 August 2012 - On AirAsia Flight 5187 from Miri to Kuala Lumpur was
scheduled to take off at 7.40pm.
Furious passengers had their journey delayed for over an hour as a result of a man's
emphatic decision not to remain on the plane until take off. A witness said that as the
plane was about to take off, the man suddenly opened the emergency doors and leapt
out. On-duty flight attendants reportedly said they were powerless to stop him from
opening the emergency exit and jumping out once the plane had started to move on the
runway.

3. AirAsia A320 near Kolkata on Jun 9th 2013, engine shut down in flight

An AirAsia Airbus A320-200, registration 9M-AFB performing flight AK-1242
from Kolkata (India) to Kuala Lumpur (Malaysia) with 144 passengers, was climbing
out of Kolkata when the crew needed to shut down an engine (CFM56) and returned
to Kolkata for a safe landing about one hour after departure.

4. AirAsia A320 at Phuket on Dec 27th 2013, bird strike
An Air Asia Airbus A320-200, registration HS-ABB performing flight FD-3167
from Phuket to Chiang Mai (Thailand) with 181 people on board, was climbing out of
Phuket when an engine (CFM56) ingested a number of small birds and an odour of
roast feathers developed on board. The crew announced they suspected a bird strike and
decided to return to Phuket for a safe landing about 30 minutes after departure.
Maintenance inspected and cleaned the engine, the aircraft was able to depart again
with about 110 minutes delay and reached Chiang Mai without further odour but with a
delay of about 105 minutes.
5. AirAsia A320 at Taipei on Feb 28th 2014, engine fire indication
An AirAsia Airbus A320-200, registration 9M-AFL performing flight AK-1519
from Taipei (Taiwan) to Kota Kinabalu (Malaysia) with 133 people on board, was in
the initial climb out of Taipei when the crew stopped the climb at 5000 feet reporting a
fire indication of the right hand engine (CFM56). The crew worked the relevant
checklist, shut the engine down, activated the fire suppression and returned to Taipei
for a safe landing about 15 minutes after departure. Attending emergency services
found no trace of fire.

The flight was cancelled.The airline later reported the indication had been false.
Taiwan's Civil Aviation Authority reported there had been no fire, the fire indication
was the result of a malfunction of the fire detection system. No investigation has been
opened.

http://www.aeroinside.com/incidents/airline/airasia















Other ventures
Tony Fernandes having a leadership style that is participating,the leader and
followers share in decision making,and plays a significant role of the leader is
facilitating and communicating to make the decision to participate in variety of
business, for examples:
In 2007, Fernandes started a hotel chain, Tune Hotels, based on the no-frills concept.
It has properties in Britain, Australia and the Far East.
[6]

As of 2013, Fernandes is also involved in a reality TV series: The Apprentice Asia
is an Asian reality game show in which a group of aspiring young businessmen and
women compete for the chance to work with Fernandes, who also serves as the host of
the show.
In March 2012, Tony Fernandes Served on the International Advisory Board of
Global March to Jerusalem, which aims to "mobilize the international community in
solidarity with Palestinians and to protect Jerusalem."
[7]
A Joint Statement was issued,
signed by the various members of the Board, including Fernandes.

http://en.wikipedia.org/wiki/Tony_Fernandes#Other_ventures













2.3 Tony Fernandes in Achievements

Fernandes' biggest achievement has been to turn AirAsia into an international
carrier. Before the creation of AirAsia, countries in the region did not have open-skies
agreements. In mid-2003, Fernandes' lobbying pushed Dr Mahathir to raise the idea
with the leaders of neighbouring Thailand, Indonesia, and Singapore. As a result,
those nations have granted landing rights to AirAsia and other discount carriers.
Fernandes has indeed set in motion the advent of budget carriers in the region. Now,
South east Asia hosts a number of low-price carriers such as: Singapores Tiger
Airways (owned by Singapore Airlines); Singapores Valuair, and Jetstar Asia (partly
owned by Qantas Airways) (both airlines merged in 2005); Thailand's Nok Air; and
Indonesia's Lion Air.
In 2004, AirAsia formed successful joint ventures in Thailand and Indonesia
where AirAsia holds 49% stake in both companies. Thai AirAsia, a joint venture with
Shin Corporation, Thailands largest telecommunication conglomerate, took to the
skies in Feb 2004 and has to date carried over 1 million guests in its first year of
operations. PT AWAIR, re-launched as a low fare airline on Dec 8th 2004 presently
serves 5 domestic destinations in Indonesia.

Fernandes has received several awards for his outstanding achievements:
International Herald Tribune Award for the "Visionaries & Leadership Series", for his
outstanding work in AirAsia; "Malaysian CEO of the Year 2003" in December 2003
a highly acclaimed recognition, so far awarded to only nine other recipients in the
country, by American Express and Business Times. The award was an initiative to
recognize entrepreneurial and managerial expertise and performance among leaders of
Malaysian corporations.
Named the joint winner of the CEO of the Year 2003 award by American Express
Corporate Services and Business Times . "Emerging Entrepreneur of the Year" in
the Ernst & Young "Entrepreneur Of The Year Awards" in 2003; Made the list of
Business Week's "25 Stars of Asia" in 2005. "Malaysian Ernst & Young Entrepreneur
of the Year 2006". Fernandes has also been honoured by the Malaysian government
with title Dato.
https://smallbusiness.yahoo.com/advisor/answers/corporations-20071215053919A
ALosUK.html





































2.4 Tony Fernandes in Management
Tony Fernandes focus in applications of statistic, optimization models, information
models, and computer simulations to management activities that involves in
quantitative approach. He use the quantitative approach, especially when making
decisions, as they plan and control work activities such as allocating resources,
improving quality, scheduling work, or determining optimum inventory levels.

2.4.1 Strategies
When Tony Fernandes bought over the loss making and debt riddled AirAsia in 2001,
the enterprising group quickly settle the debts, rebranding and relaunching AirAsia as
the low cost carrier. AirAsia entire business model centres around a low-cost
philosophy which requires its operations to be clean, simple and efficient. By using
Total Quality Management(TQM) several key strategies have been employed
towards this effect, including:
A low-cost carrier (also known as no-frills or discount carrier)is an airline that offers
low fares but eliminate all non-essential services. The typical low-cost carrier
business model is based on:
-a single passenger class
-a single type a airplane(reducing training and servicing costs)
-a simple fare scheme (typically fares increase as the plane fills up, which rewards
early reservation)
-free seating (which encourages passengers to board early)
-direct, point to point flights with no transfers
-flying to cheaper, less congested secondary airports
-shorts flights and fast turnaround times (allowing maximum utilization of planes)
-Free in-flight catering and other complimentary services are eliminated, and
replaced by optional paid-for in-flight food and drink.


Simple product
A typical low cost airline product is extremely basic. It focuses on getting passengers
from point A to B, cutting out all the extras. This means there are no meals, drinks
or snacks served free on board. In certain airlines, these may be purchased on request.
The aircraft have Narrow seating to permit greater capacity. Low cost airlines offer
all-economy flights, with no additional space requirements for wider business class
seating. This means more passengers can be accommodated on each sector. There are
no facilities for seat allocations as this free-seating makes passengers board the
flights early to get themselves a decent seat. The pricing structures of low cost airlines
allow for no additional schemes or sales promotion activities, including frequent-flyer
programmes.

Positioning
The low cost airlines the world over are known to target Non-business passengers,
leisure traffic and the price-conscious business passenger segment. The low cost
model works best on short-haul point-to-point traffic with high frequencies. These
airlines have aggressive marketing strategies and compete with all transportation
carries, including the road and railway networks. Most Western low cost airlines fly
to secondary airports which are cheaper to land into. However, this is not yet option
available in India.

Low Operating Costs
Low cost airlines have a very lean organization structure and operating costs are kept
to the bare minimum with low wages (as crew/staff requirements are low and
generally freshers are preferred), low airport fees, low costs for maintenance and
cockpit training (as these are typically outsourced). There is no requirement for
standby crews due to a homogeneous aircraft fleet. Low cost carries aim at achieving
high resource productivity. This is generally achieved due to short ground waits (as
turn around times kept minimal due to simple boarding process, no air freight, no hub
services and short cleaning times). Selling costs are also minimized as high
percentage (if no 100%) of ticket sales is generated online, eliminating the margins
that would otherwise need to be passed on as commissions to travel agents.
http://www.scribd.com/doc/14214973/Air-Asia-Strategic-Analysis