Airasia’s Fernandes predicts short-haul flying to recover first

Short-haul flying is likely to recover first from the impact of Covid-19 on travel, Airasia founder, Tony Fernandes, believes.

Speaking in a video-link interview to the EY Entrepreneur of the Year CEO Retreat on Monday, Mr Fernandes argued that “we live in too globalised a world” for air travel not to recover.

He pointed out that air travel breaks down into four divisions – long-haul, short-haul, business and leisure.

"I think the one that's going to recover fastest is short-haul," he said. "In Ireland's case, you're more likely to go to Spain than to Asia or America.

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“I think business travel is going to be affected for a while, people are beginning to question whether there is a need for it with Zoom and all of these things, but it will come back.”

Mr Fernandes predicted that current barriers to travel would ease. “A vaccine will come, treatments will come and tests will be quicker,” he said. “So travel will come back; we are too globalised a world for it not to.”

Mr Fernandes established Airasia in 2001, inspired by flying from Dublin to Paris with Irish giant Ryanair.

Airasia flew 52 million passengers last year. Mr Fernandes remarked that people in many of its key markets, including Thailand, Malaysia, Singapore and the Philippines, choose the airline ahead of their national carriers.

Businessman Conor McCarthy, now head of aircraft maintenance specialist, Dublin Aerospace, was one of Airasia's "founding fathers", Mr Fernandes said.

The airline boss originally worked in the music business. He told the audience that an encounter with some "famous musicians" in Dublin's Clarence Hotel and Kitchen nightclub, owned by rock band U2, led to his trip on Ryanair.

"I took a Ryanair flight from Dublin to what I thought was Paris but was actually Beauvais, " he recalled. "But, I thought the whole process was amazing."

He told the interview that Ireland continued to be a special place for him. He also pointed out that many of the players in Queens Park Rangers, the English football championship club that he owns, have come from here.

Mr Fernandes acknowledged that he had never seen a crisis on the scale of the Covid-19 pandemic, which grounded about 98 per cent of air travel.

“But there is only one thing you can do in this life, and that is to fight right back. And that’s the challenge, you have to regroup, rebrand, re-pivot, re-everything really, and come back stronger,” he said.

He described his airline’s staff’s “will to win” as phenomenal. “Airasia will survive,” Mr Fernandes stressed.

Emerging businesses

In terms of the future, he sees several distinct businesses emerging as the airline develops – logistics, financial technology (fintech) based on its considerable data store and technology.

“Technology has been very much part of our DNA,” he explained, saying that Airasia was one of the first carriers to sell seats over the internet.

The company is also developing a fast-food franchise from its inflight menus, a business he hopes can rival McDonald’s.

“Who would have thought airline food can be monetised into a fast-food franchise?” he asked.

Mr Fernandes even hinted that he was open to offers from potential Irish franchisors.

He confirmed that he was considering retiring from the airline until the pandemic struck early this year, but indicated that this was still the long-term plan.

Even though his name has been very much tied to the airline he founded, Mr Fernandes argued that the organisation was bigger than one man and would continue long after he had left.

He also stressed that he would not stay on in any role once he had gone. “When I leave Airasia, I will leave it,” he said.