- Resilience key to overcoming crises, focusing on how businesses can adapt, pivot
- Innovation isn’t just about technology—it’s about creating meaningful change
At the I-Nation Global Summit 2024 held from 2-4 Dec in Kuala Lumpur, Tony Fernandes, the CEO of Capital A Bhd shared how resilience, innovation, and adopting a people-centric leadership style played critical roles in expanding a struggling airline he bought in 2001, AirAsia Sdn Bhd, into a diverse business ecosystem today.
“Dream big, take risks, and never give up.” This ethos, delivered by Fernandes, resonated with attendees as he took center stage on Day 2 of the summit, sharing his journey of turning a struggling airline in 2001 into the foundation of a diverse business ecosystem 23 years later.
Hard hit by the pandemic, that foundation was shaky throughout the pandemic era from early 2020 and post-pandemic too, with its financial troubles leading it to be classified by Bursa Malaysia as a PN17 status company from July 2020. However, four and a half years, and one name change in Jan 2022 – from Air Asia Group Bhd to Capital A – later, latest news reports quoting Fernandes has it that the PN17 status will finally be lifted by Q1 2025.
But as Fernandes shared to attendees of I-Nation Global, hosted by the Malaysian Research Accelerator for Technology and Innovation (MRANTI), there is opportunity in adverse operating environments as well. One just needs to be attuned to the circumstances and be bold in making decisions. In other words, dream big and dare to take risks.
From AirAsia to Capital A
As is familiar to many Malaysians, Fernandes began by reflecting on the evolution of AirAsia. Acquired in 2001 for a symbolic RM1 (US$0.224), along with a debt of US$8.95 million (RM40 million), the airline had just two planes and 200 staff. With no prior aviation experience but inspired by the success of Ryan Air in Ireland, Fernandes took a bold leap of faith. Today, AirAsia operates 246 aircraft, employs 24,000 people, and serves 136 destinations globally. (see background of main pic for more data points)
The COVID-19 pandemic marked a defining moment for AirAsia, he noted. Grounded planes and plummeting revenues forced Fernandes and his business partners to rethink their strategy. With his long-held belief in the power of dreaming big and confidence in taking risks to succeed, the crisis became a catalyst for reinvention, ultimately transforming AirAsia into Capital A, that today has become a diversified conglomerate spanning logistics, digital services, food & beverages and more.
Lessons in resilience and innovation
Drawing from his experiences, Fernandes reflected on the challenges he has faced—from economic downturns to the pandemic. “You can’t control the storms, but you can control how you navigate through them.” He emphasized resilience as the key to overcoming crises, focusing on how businesses can adapt and pivot to thrive.
As a digital run business where almost all its airline bookings come via the website and app, Capital A has long recognised and relied on data to help drive the business.
But during pandemic, data became a critical asset in overcoming challenges. “Understanding our customers better allows us to quickly pivot and deliver solutions that meet their needs,” he said.
An example was how AirAsia had hundreds of idle planes and pilots, letting go many during the pandemic, with around 10% layoffs in late 2020, according to media reports, followed by subsequent rounds in 2021.
Yes, while passenger fleets were grounded, cargo via sea and air had spiked to record levels. In Southeast Asia, another driver was eCommerce which really took off especially with goods from China heading into Southeast Asia.
“And we had people who couldn’t fly. So, we took all the seats off our planes and turned them into cargo planes.”
Fernandes was talking about Teleport, a logistics company that is a wholly owned subsidiary of Capital A, that repurposed grounded planes to transport cargo. “In just two years, with the use of data science and great people, Teleport has become a leading player in Southeast Asia,” Fernandes claimed, underscoring the success of turning adversity into innovation. Capital A’s 2023 annual report stated that Teleport delivered 30 million packages that year. Revenue increase by 56% YoY to RM731 million while posting an EBITDA of RM18 million.
[RM1 = US$0.223]
[Ed note: A day after Fernandes spoke at I-Nation Global, Teleport announced on 4 Dec that it expected to end 31 Dec 2024 with record revenue of RM1 billion, a 50% year on year increase. Teleport did not share what % of the revenue came from passenger planes that were converted into cargo planes arising from the pandemic, nor how much revenue came from using passenger plane bellies that pre-pandemic, was used exclusively for passenger luggage.]
Another key innovation was to launch an aircraft Maintenance, Repair and Overhaul business in Sept 2020 called, Asia Digital Engineering (ADE), which integrates blockchain and predictive maintenance to streamline aircraft operations.
“ADE has significantly reduced aircraft turnaround times, generating new revenue streams for clients,” Fernandes said.
In April 2023 Fernandes had gushed about the potential of ADE during the announcement of a US$100 million deal from Singapore based OCP Asia Ltd which focuses on privately negotiated Secured Direct Lending. “This is a very cash lucrative, profitable business. It was quite an eye opener for me when I started seeing the kind of margins they made.”
People: The heart of the business
At the heart of any conversation or talk given by Fernandes about his journey is the subject of people and nurturing their talent.
“At AirAsia, our people are our greatest asset,” he enthused. “Many companies claim to put customers first, but for me, it’s simple: happy staff lead to happy customers. We’ve fostered a culture of inclusivity and opportunity, where anyone can dream, innovate and rise to their potential.”
He spoke on the success of AirAsia Academy, launched during the pandemic, which reskilled employees across various roles. “Many of our cabin crew have transitioned into roles like flight instructors and even pilots. Before AirAsia, there were no female pilots in Southeast Asia,” he claimed. “Today, we have the highest number of female pilots in the world,” he proudly said.
Fernandes emphasized the importance of investing in people, creating a workplace culture that reflects this commitment. “We’ve created a community-like environment—with kindergartens, hair salons, and even a dog shelter. The idea is to offer services that support employees in their daily lives, making it easier for them to balance work with personal commitments.”
He also pointed out, “A leader is only as effective as the team behind them. I make it a point to understand every role in the company, from flying planes to changing wheels, because this builds trust and respect.”
Branding as an investment
“Branding has always been at the core of my strategy,” Fernandes said, emphasizing its critical role in building lasting relationships with stakeholders. “Branding is an investment. While accountants may struggle to quantify its ROI, it’s branding that keeps both customers and employees committed,” he stressed
At AirAsia, Fernandes said, the brand goes beyond just travel—it embodies aspiration, inclusivity, and the belief that anything is possible. “It’s about creating a connection that fosters trust and loyalty,” he added, highlighting the deeper values that shape the company’s brand identity.
He also spoke of the transformation of the digital strategy. “When I proposed turning our website into a super app (in 2021), there was initial resistance,” Fernandes recalled. “But standing still wasn’t an option, especially with platforms like Booking.com dominating the ticketing space.”
Today, the AirAsia Super App, rebranded as MOVE Digital since Sept 2023, is a thriving marketplace for travel, food, and lifestyle services. Based on its Bursa Malaysia filing, in 4Q2023, MOVE achieved nearly 17 million Monthly Active Users, completed 5.4 million e-hailing rides, and processed RM4.5 billion in BigPay transactions, showcasing its successful integration of travel, mobility, and fintech services. Revenue for 2023 saw a 40% increase to RM379 million
Sustainability: Doing what matters
At Capital A, sustainability extends beyond superficial gestures. “We focus on practical measures that truly make a difference,” he said. For example, AirAsia has adopted electric vehicles for airport operations and uses lightweight materials in aircraft to reduce fuel consumption, minimizing its environmental impact.
Fernandes also highlighted the broader implications of tourism, stressing the importance of responsible practices. “Bringing a million tourists to an island isn’t sustainable unless it benefits the local community,” he explained. “We take our role seriously in ensuring that tourism not only brings economic benefits but also protects the local environment and culture.”
Inspiration for the future
Concluding his keynote, Fernandes offered words of encouragement for aspiring entrepreneurs, urging them to dream big and take bold risks. “Don’t be afraid to venture into uncharted territories,” he advised. He also emphasized the importance of building strong teams, saying, “Invest in your team—they are the backbone of every successful venture.”
Reflecting on his own journey, Fernandes shared his philosophy on change and innovation: “Change is inevitable, but it’s how you adapt that defines your success.” On innovation, he said, “Innovation isn’t just about technology—it’s about creating meaningful change that drives progress and leaves a lasting impact.”
Lan Ghafar is a Contributing Editor at DNA.
Related Stories :
Keyword(s) :
Author Name :