Airlines must bank on efficiency and shun jet fuel subsidies

Governments should encourage airlines to stand on their own feet by making them more efficient and independent, a leading aviation entrepreneur told the Jeddah Economic Forum (JEF) on Wednesday.
Tony Fernandes, group CEO of Air Asia, made this suggestion in response to a query about state incentives such as subsidized jet fuel for airlines.
“Subsidies are addictive… very hard to resist,” he said.
Fernandes believes that governments could redirect such funds to sectors such as education and health.
He acknowledged that oil accounted for around 45 percent of the low-cost carrier’s budget.
Fernandes, described as an Asian aviation guru, sees people as the “key asset” of any business and hopes to help develop their full potential, passions and dreams.
“We can never let talent go waste,” said the CEO of Asia’s No. 1 low-cost airline.
His business offices have no walls and he seeks ideas from his staff.
“I don’t have an office. I only have a desk,” said the CEO. He said that although jet fuel prices had increased over the years margins had become better now.
He said it took him more than seven years to consciously and consistently build up the Air Asia brand name and logo as distinct and internationally known.
“You can do anything, if you put your mind to it,” said Fernandes, who made an inspiring call to young Saudi entrepreneurs to pursue their goals with focus and discipline.
“We invest in branding. We use branding at very high level,” he said.
“Since the carrier was launched in 2001, we have gone through every crisis known to the mankind. We faced SARS, bird flu, earthquakes and tsunamis,” said the CEO.
But the group survived those disasters. “We learnt that there’s always a way out of crises,” he said.
Fernandes was a keynote speaker at Wednesday’s JEF sessions. His topic was "An integrated transportation vision for economic growth and youth job creation.”
The CEO believes in using digital technology for his businesses.
Much of his business comes from AirAsia.com. It is part of his clever marketing strategy to make passengers discover and enjoy his website.
The engagement via social media has no extra costs, he said, adding that digital platforms such as Facebook and Twitter provide a wonderful opportunity to catch up with the market and build enterprises.
The CEO has around 800,000 followers in his personal Twitter account — @tonyfernandes.
He said nearly 80 percent of the carrier’s business came from Internet and the airline was also now successfully expanding into mobile platforms.
When recruiting staff, he said the airline did not insist on industry experience. “We see what the candidates have done outside — their dreams and passion.”
He said the staff in his marketing and social media teams did not have previous experience in the aviation industry.
With a route network that spans through to more than 20 countries, Air Asia continues to pave the way for low-cost aviation through its innovative solutions, efficient processes and a passionate approach to business.
Fernandes said low-cost aviation helped open new routes or markets and creates fresh demand. Mass tourism also creates more job opportunities.
A one-trip from Jeddah to Kuala Lumpur on Air Asia X costs less than $160, he pointed out.