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Communication in a Crisis: Indonesia AirAsia
ABOUT INDONESIA AIRASIA
In 2001, Tony Fernandes (Fernandes), a British-trained accountant, had plans to start Malaysia’s first discount airline, but he could not obtain a license. It was at this time that he heard that Malaysia’s state-owned airline, AirAsia, which had gone bankrupt with a US$ 11 million debt and two Boeing aircraft, could be bought from the government of Malaysia. Fernandes had to sell his idea to Malaysia’s then Prime Minister Mahathir Mohammad (Mohammad). In October 2001, the two of them met and Fernandes told Mohammad that a discount carrier could revolutionize air travel in Southeast Asia and boost tourism at a time when airlines worldwide were grappling with the impact of the September 11, 2001 terrorist attacks in the US. Mohammad was convinced and Fernandes had to pay 26 cents to buy the carrier. Airlines analysts were, however, skeptical about Fernandes’ idea of trying to run a bankrupt airline. Commenting on the analysts’ reaction, Fernandes said, “When we started, they said it wouldn’t work. They said we would die........ |
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In 2002, Fernandes launched AirAsia in Malaysia, pioneering the regional low-cost airline in Southeast Asia. He became known for breaking the dominance of national carriers and making flying affordable to millions of Asians belonging to the middle-class segment. Fernandes introduced one-way fares as low as US$ 2.5, persuading thousands of Malaysians to fly. It was reported that Fernandes was able to keep costs low with short-haul fights, a high rate of aircraft utilization, and a faster turnaround rate. He also made money by selling drinks on board, marketing tie-ups with other companies, and running a lucrative cargo service.........
