AirAsia Boss Tony Fernandes on #PaxEx, Social Commerce and Digital Dreams
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AirAsia Boss Tony Fernandes on #PaxEx, Social Commerce and Digital Dreams


Hi everyone, you’re watching APEX Insider and I’m your host Maryann Simson. Today we’re in Kuala Lumpur at the very
uncorporate-feeling corporate headquarters of AirAsia and AirAsia X. Alright, so Tony, thank you so much for having us here. What an amazing space. — Well, we love it, I love it. It’s an evolving process, I’ve caused a lot of headaches
because I keep changing things, but yeah people are happy here, so much so
that actually when I I told some of them they were going to move out into town — Already? You just moved in! — Well, we’re just growing the dot com business, no one wanted to leave, so this is far away from town, but people have grown to love it so success, so far. — Wicked. I feel like it
really embodies AirAsia’s attitude towards company culture and
brand building and the internal marketing as well as external marketing,
would you agree with that? — Yeah, wow you really did your research. Yeah, I always said that branding starts at home first, you know staff have got to understand what our message is before we can sell it and it’s about transparency, it’s about openness, it’s
about democracy, it’s about a flat structure. So I couldn’t get everyone on
one floor, so I cut a hole in the middle so everyone can see everybody and
our lounge and our food is for everybody and yeah it embodies, you got it in the one. — Well we’ve done the tour around here and it really is amazing to see it,
I had no idea what I was in for so that’s really fun. — That’s good to hear. — So on the
back of this sort of ethos of putting people first, you also had incredible economic success with the airline, can you just tell us about the journey a little bit from beginning to now? — Come
December it will be 18 years since I took over AirAsia and when I go to any airport and I, you know I just came here from Bangkok, and we had so
many planes there and so much activity and obviously at KLIA we’re kind of dominant here. It has been an incredible story and it encompasses your first point which is
really people-led. I think if we didn’t have this culture,
we wouldn’t have had the economics, we wouldn’t have the buy in and the
transparency to have the margins that have enabled us to grow, but also what’s key
is that breaking down all these invisible silos so we can take a lot of
cost out and bring down fares. The growth has been predicated on creating a market that just wasn’t there before, only 6% of Malaysians flew, 3% of Thais and less than 1% of Indonesians. That has been turned upside down through low
fares. — You’ve done a great job of keeping the fares low by just keeping
the frills out of the way, I guess, but I think your passenger experience is still pretty good, so how would you describe the passenger experience? — so I start off with a simple one, that it doesn’t cost anything to smile. I
find some value low-cost brands, not just in aviation, almost find it gimmicky
to be rude, that they don’t need to give you any service, you know some
restaurants are famous for treating you badly in London because they’re
cheap. So I always said to my staff it doesn’t cost anything to smile. We have our rules, people respect them, but we can be nice about it and treat everyone equally. So that’s the
number one ethos and then, look, we invest in trying to make our seats
nicer, we invest in having good Wi-Fi products on the plane, we have great food. Our food is simple, yet incredibly popular and now we’re opening up our
own fast-food restaurants downtown in KL. People take it away, they
love it so much. I just thought well you know we’ve been surrounded by American fast food brands, why don’t we try a Southeast Asian fast-food brand. We’re opening our first one in December and I took a
tweet of the building and the response was unbelievable. So you’re right,
low-cost doesn’t mean low quality, it’s just high efficiency and taking out
things that you may not have wanted and giving you an option to pay for it.
— Awesome. Okay let’s talk a little bit about your vision for the future of the
company now, it’s a complete paradigm shift isn’t it? — Yeah, I mean I don’t want
to be an airline forever. I want to be more than an airline, I
want to be a transport mobility company that transforms into an everyday life. I
take it from my staff, right? What I’ve provided here, you can almost live here.
We have sleep pods, we have a kindergarten, we have hairdressers, we
have gyms, we have basketball courts. You name it, we’ve got it and so I
suddenly realize that well, AirAsia with some of my other companies,
insurance company, mobile-phone, actually play a large part in people’s lives as
they have done in the workforce, so we’re going for this transformation in trying
to be first of all an online travel agency and then onto an everyday app and be relevant to people. Not easy, but then it wasn’t easy to start an airline with
no money, no experience from the music days. One of our big plusses, well two of our big plusses. Maybe three actually, one is kind of linked to the other, is that we
have a huge amount of data. We have a positive data acquisition model vis a vis
many of the tech companies that have to give away promos, have to spend a fortune in acquiring customers. We have a hundred million people flying with us, we
have 60 million unique visitors to our website every month and second we have a very strong loyalty program which can be a currency, so the third being a business
that actually makes money as opposed to draining cash, but one and three are
really linked together. — So I was going to say I really like the way that you are
using the airline and using the airline data to acquire customers. Are there any
sort of ethical questions in there when people are giving their data for the
flight and you might be using it to target them with offers? — We’re not targeting so much, we are a platform, you come
onto the platform, you have the option of using other things on the platform. In
terms of targeting, yes there’ll be a little bit for sure we know you’re
traveling or you’re in KL, we can give you an offer. It’s all up to the consumer
to say whether they want it or not. We don’t sell our databases, we
never have, I’ve never worked with a company that does that, so that’s
something different from others, but we want to give our customers a
better experience. If you are a vegetarian, why should we push
a meat dish to you in the menu, for a simple reason, using data in a
positive manner to give you a better experience. — One of the things that I
heard you speak about recently was trying to create like a social
marketplace and that was really compelling, I loved the idea of sort of
encouraging people to be more entrepreneurial, removing some of the
barriers for them and leveraging the cargo opportunities as well, can you talk about
that? Alright, well my whole life has been about inclusivity, right from the moment I
turned up in a boarding school in England where everyone was white and I was the only Malaysian, I’ve always thought it’s great to include everyone
into everything, so AirAsia was about including people into flying. What
we’ve done for passengers, I feel we can do for boxes and similarly our culture
has been an entrepreneurial culture, that’s where we came from
right? So one of many projects I’m doing in this digital field is to do to boxes
what we did to people, allowing it not to be a complicated mystified product and
by doing that we open up a whole new market of small companies and
entrepreneurs, even single entrepreneurs who are selling stuff on Instagram, who
generally are only selling it in their own city can now sell it worldwide.
It’s an ambitious project but I think from my reading, social e-commerce
could become bigger than e-commerce, It came from my mother’s roots, my mother was the first kind of social e-commerce person by
selling Tupperware in the party plan system, you go around to many homes
in Malaysia selling Tupperware, having parties, that’s the first
form of social ecommerce if you think about it, so it’s in my roots.
We have the assets to be able to do it, we have the data, so let’s try and do
something for the little man which has always been our our goal. — Okay awesome and then just going back to the connectivity part of the puzzle. If
you’re gonna create a social marketplace like this your most captive
audience is still the passenger while they’re on the plane, so you’re
creating a platform to do e-commerce, I mean those are the ones who’ve got
nothing better to do so the in-flight Wi-Fi must be a big part of the puzzle. — That is, that is and the speed
now, I just came off a new Ka-band and I was blown away, it was nothing short
of spectacular for me and Wi-Fi has become a big part of my life, to enhance productivity I’ll always try and find a plane with Wi-Fi,
but yeah you have a captive audience for one and a half hours, but I hope it’s not
just the Wi-Fi. That’s a great way of getting people in eyeballs
in front of it, but obviously when they come home we hope they continue to buy on our social e-commerce platform and we continue to register people like that. —
Okay and then one final question. I asked Twitter if anybody had a question that
they would like to ask you ,and Florian from Switzerland had a good one and he
just wanted to know since you began AirAsia to this point have you made a
business decision with regard to the airline that you wish you hadn’t made or
that you would do differently now? — Oh wow. Good question. No, I don’t think so to be honest, not saying I’m perfect, we’ve made hundreds of mistakes, but I think mistakes are part of making it better and realizing the good thing about this airline is there’s no ego, if we
screw up we stick our hands up and screw up. Maybe my mouth, maybe I piss off
politicians by speaking my mind and Asia wasn’t ready for me eighteen years ago,
some governments didn’t take so kindly to me, but even that, if I was a pussycat
on the wall we would have been steamrolled. — You can’t bake a cake without breaking a few eggs, can you? –I No, that’s right. So far lots of mistakes, lots and lots of
mistakes, but not one I say oh boy I wish I could turn back and do that again. — That’s good to hear. Alright well
thank you so much for your time today. — Pleasure, I hope you enjoy the flight to Singapore. — Thank you so much. The AirAsia story really has become a celebrated case study in
agility, perseverance and success in business. I think I speak for a lot of us
when I say I can’t wait to see what happens right here in the next few years.
A huge thank you of course to AirAsia for having us here today, thank you as well
to our sponsor Inmarsat for making this episode possible. If you enjoyed this
video, please subscribe to the channel for more great aviation content and be
sure to follow the APEX association on social media.

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