Tony Fernandes move to Jakarta is to grow profit by five-fold

SEPANG: Growing profits by four to five-fold is the aim of Tan Sri Tony Fernandes as he moves to Jakarta to drive AirAsia's regional expansion after handing over the reins of the airline's Malaysian operations to 38-year-old Aireen Omar .
“AirAsia
has been dependent on the Malaysia operations for growth and yet
Malaysia has only 28 million people. If we can get the other operations
to grow, the potential of increasing profits by 400% to 500% over time
is there,” said Fernandes who is AirAsia group chief executive officer.
However, he did not set targets for when this would be achieved.

“But in six months, we will be able to say (when it is achievable). The
impetus is in trying to deliver profitability to the countries that the
group is not generating as much as Malaysia, and I believe we can do
that with the right emphasis and the right drive.
“We want to
focus on creating a powerful Asean-Asian airline and make Japan,
Indonesia, Thailand and the Philippines as profitable as Malaysia.
That's our goal to realise the potential of what we've built,”
Fernandes added after announcing Aireen's appointment.
The Malaysian operations contribute 75% to group profit despite AirAsia having subsidiaries in other countries.
AirAsia
has set up a regional base in Jakarta known as AirAsia Asean as part of
its regional expansion strategy. With presence in five countries now,
the aim is to have joint ventures in five more countries in the region.
The set-up in Jakarta will have a staff strength of 20 people,
comprising the core team of AirAsia and the relocation cost is about
RM1mil.
“We need to pivot to a wider, regional lens from the
first decade's focus, which was largely domestic. The enormous
potential in an underserved market of three billion people spread
across Asean, North-East Asia and South Asia offers huge opportunities.
AirAsia, we are convinced, is ideally positioned to reap huge dividend
by serving this market,” he said.
Fernandes would be moving to
Jakarta next month to head the group while the day-to-day running of
the Malaysian operations would be handled by Aireen.
In a statement to Bursa Malaysia,
AirAsia said Aireen would be the CEO and executive director while
Fernandes and Kamarudin would quit their posts as group CEO and deputy
group CEO respectively by June 30. They would become non-independent
non-executive directors of AirAsia.
Aireen said at the press conference that AirAsia would maintain the 60% domestic market share it currently enjoys.
“I know I have a big shoe to fill and I am confident to keep the target alive. Everyone can fly not only now but forever.
“We
have 60% domestic and 40% international market share. We intend to
maintain that and grow it,” she said, adding that AirAsia's local
operations would continue to be creative and innovative.
She said maintaining market lead, cost discipline and increasing revenue would be among the main challenges going forward.
Aireen
joined AirAsia in January 2006 as director of corporate finance and is
now regional head of corporate finance and treasury.
She holds
an economics degree from the London School of Economics and Political
Science, and a masters in economics from New York University. She
started as associate with Deutsche Bank Securities Inc, New York in September 1997 till August 2000. She returned to Malaysia to join Maybank Investment Bank
as assistant vice-president from March 2001 to November 2003. In
December 2003 she joined Bumiwerks Capital Management as director until
December 2005.
Fernandes described her as “tough and aggressive”
while Kamarudin credited her for being able to lock up aircraft
financing at very competitive rates during the crisis.
Aireen said had no inkling that she would become CEO of AirAsia.
“I
was shocked to know that I was one of the four candidates the founders
and the board were looking for because in whatever I do, I did not have
a thought that I would be in that position. I just go on doing my best
and stay ahead of the curve.
“So when, they (Fernandes and
Kamarudin) called me to a board meeting to tell me that I was chosen, I
was overwhelmed and excited.
“It was all mixed feelings at that
point. It is a huge responsibility and there will be lot of people
monitoring my progress, but I am honoured and humbled by the trust and
confidence placed on me by Fernandes, Kamarudin and the board,” she
said.