:00:13. > :00:20.Welcome to HARDtalk. I am Stephen Sackur. There is a special breed of
:00:21. > :00:24.business leaders who acquire a public profile far beyond their core
:00:25. > :00:29.business. Think of Donald Trump, Richard Branson, and many others. Is
:00:30. > :00:35.a flamboyant style and versification into sport and media necessarily
:00:36. > :00:43.good for the bottom line? My guest today is one of Asia's best-known
:00:44. > :00:48.businessmen, Tony Fernandes, boss of AirAsia, Formula 1 investor,
:00:49. > :00:53.football owner, and dabbler in reality TV. Is it easy to lose sight
:00:54. > :01:14.of what matters most to the success of business?
:01:15. > :01:28.Tony Fernandes, welcome to HARDtalk. Thank you very much. You have been
:01:29. > :01:31.in business for three decades now. Is the Tony Fernandes that does
:01:32. > :01:37.business today different from the young man who set out? I had to
:01:38. > :01:40.think a little bit smarter, a little bit older and wiser, but in
:01:41. > :01:46.principle the same Tony Fernandes from 30 years ago. What about the
:01:47. > :01:50.attitude to risk? Umm, maybe a little bit more cautious, thinking
:01:51. > :01:53.it a bit more. But overall I don't see much difference. I think
:01:54. > :01:57.decisions have to be made critically. I think changing
:01:58. > :02:02.management is critical, especially in this day and age, and sometimes
:02:03. > :02:09.procrastination, analysis, paralysis by analysis, is a detriment to
:02:10. > :02:12.business. That is what I call it. I talk to my management team all the
:02:13. > :02:16.time about changing and adapting quickly. One of the fascinating
:02:17. > :02:23.things about you is cultural as much as business. You, and I said it in
:02:24. > :02:27.the introduction, you made your fortune and your name by introducing
:02:28. > :02:35.a new form of cheaper budget aviation travel to Asia. And you are
:02:36. > :02:47.of course proud to be again. And yet as people listen to your voice in
:02:48. > :02:50.the attitudes as well, you seem culturally quite Western educated,
:02:51. > :02:56.in the UK, working for Branson for a while. -- Asian. Do you see yourself
:02:57. > :03:02.as a combination of East and West? Yeah. I never thought I would work
:03:03. > :03:07.in Malaysia. But business is business. I have the ability to be a
:03:08. > :03:13.chameleon. You can put me in any part of the world, China, Korea,
:03:14. > :03:18.humour is humour, businesses business... Is that really true?
:03:19. > :03:22.From the little time I spent in cultures like Japan, for example, it
:03:23. > :03:25.struck me, not speaking Japanese, but Japanese business culture is
:03:26. > :03:33.fundamentally quite different to Europe. That is true, that is true,
:03:34. > :03:40.but alcohol is a great leveller. It is also big in those countries.
:03:41. > :03:43.Fine, social occasions, I bring to business a lot of the relationship.
:03:44. > :03:52.Much of it is done socially. Creating relationships goes beyond
:03:53. > :04:08.the office. It doesn't matter if you are in Japan, India, the Middle
:04:09. > :04:11.East, people would say they want all the frills, low-cost will never
:04:12. > :04:16.work, they say. They are surprised. When you get something in Japan they
:04:17. > :04:22.wrap it in 35 pieces of paper. But if you strip it down, people want
:04:23. > :04:27.simplicity and a low fare, and... Did you make enemies in Asia? You
:04:28. > :04:36.brought a European model of airlines to Asia. Be transformed it. You had
:04:37. > :04:43.seen what O'Leary was doing in the US and the UK with SouthWest
:04:44. > :04:49.Airlines. I wonder how much difficulty you had persuading Asian
:04:50. > :04:55.consumers and governments there was a market for a low-budget concept in
:04:56. > :05:01.Asia. Consumers were easy. Governments were much tougher. In
:05:02. > :05:05.our part of the world, governments own the national carrier is 90% of
:05:06. > :05:15.the time and the airports. I am only beginning, after 15 years, people
:05:16. > :05:19.are starting to say, wow, this will make a difference to our economy.
:05:20. > :05:22.But it has been hard and we made many enemies, definitely. Also, you
:05:23. > :05:26.learn some of your marketing skills at the feet of Richard Branson,
:05:27. > :05:31.working quite a while for Virgin Records. Was he an inspiration for
:05:32. > :05:37.you? You model yourself on his iconoclastic approach to business? I
:05:38. > :05:41.always say the last person I want to be is Richard because I have no
:05:42. > :05:53.preconception of going into a balloon at dirty 6000 feet, or even
:05:54. > :06:06.a balloon... -- 36,000 he was definitely an inspiration. He
:06:07. > :06:09.challenged the norm. He set up AirAtlanta to do something different
:06:10. > :06:12.against British Airways at that time. Anyone who said he was not
:06:13. > :06:15.inspirational who worked for him, they are lying. He set a new
:06:16. > :06:21.paradigms. He challenged the establishment. In some ways that
:06:22. > :06:26.affected me. And he also saw there was a value to projecting a very
:06:27. > :06:33.strong personal rant to drive the business. -- brand. Have you done
:06:34. > :06:40.that yourself? That came out of necessity. We had no money when we
:06:41. > :06:44.started AirAsia. My marketing director said we have to make some
:06:45. > :06:50.controversial statements. They will take photographs of you. I am a
:06:51. > :06:59.gregarious person anyway. It wasn't difficult to do that. Ego-driven
:07:00. > :07:02.business can go too far. 100%. As soon as used start believing your
:07:03. > :07:07.own press, that is the end of his. Let us talk about the fine line
:07:08. > :07:14.between being a successful brand yourself, using that to drive your
:07:15. > :07:23.business, looking like an egomaniac, let's look at you in 2013, like
:07:24. > :07:28.Donald Trump, you wanted to get into the business of reality TV. Here is
:07:29. > :07:34.a promotional video of a show he launched in 2013. He asks the hard
:07:35. > :07:44.questions. Whose fault is this? He is very sharp? Either ganging up a
:07:45. > :07:49.new? It was messy. Who is telling the truth? It is a disaster. And he
:07:50. > :08:00.will fire someone. I have had enough. You are fired. Tony
:08:01. > :08:04.Fernandes. Compared to Donald Trump you are actually quite polite. It is
:08:05. > :08:08.funny you say that. A couple of things, looking at that makes me
:08:09. > :08:14.cringe, to be honest the big I turned it down for two years. I kept
:08:15. > :08:18.saying I am not a Donald Trump. In the end they said do it how you want
:08:19. > :08:25.to. The marketing team in AirAsia were very keen for me to do this.
:08:26. > :08:30.Did you get bored running AirAsia? Is that why you began to look for
:08:31. > :08:39.these other things? I will talk in just a moment about your activities
:08:40. > :08:48.in sports and the whole diverse idea of your brand you have. Is that
:08:49. > :08:53.because you got bored? My first global event was sponsoring
:08:54. > :08:59.Manchester United. It was painful for me because I hate that football
:09:00. > :09:09.club. That became, umm, building a brand. Based in the UK, Richard gets
:09:10. > :09:14.a phenomenal amount of media. Ourselves in Malaysia, it is hard to
:09:15. > :09:17.get heard. We saw sport and music as a way to build the brand. It is
:09:18. > :09:29.about priority is getting distracted. -- priorities. You are
:09:30. > :09:34.committed to aviation. But as you become more ambitious and take more
:09:35. > :09:45.on, you, watcher three, I telling the staff you have taken over a
:09:46. > :09:52.football club. -- Tony Fernandes. You are correct. I did it for 11
:09:53. > :09:57.years. I felt it was time for me to move other things. Formula 1 was
:09:58. > :10:03.getting involved in a business we still have. Football was a passion.
:10:04. > :10:08.There was no business sense in football. On this programme I have
:10:09. > :10:17.said it many times publicly, focus is key. Did you lose it? AirAsia
:10:18. > :10:24.suffered a little bit, yeah. In Indonesia we lost an aircraft. 160
:10:25. > :10:30.people died. It brought me back to reality. I felt I needed to refocus.
:10:31. > :10:42.Since then that has been my number one priority, exit Formula 1.
:10:43. > :10:58.Football is run by Les and the boys. Yes. Is football like any other
:10:59. > :11:01.sport? Two days ago it was very moral. It was a great ad for
:11:02. > :11:05.football. It is the market. If someone wants to pay ?200 million
:11:06. > :11:11.for the player, that is the market. I am for the free market. It has
:11:12. > :11:15.immense highs and lows. I have been incredibly high and incredibly low.
:11:16. > :11:21.It is a phenomenal passion. It can be run as a business, and many are
:11:22. > :11:27.running it very well as a business. You have lost money big-time.
:11:28. > :11:32.Big-time. This is from the Times newspaper us. This was written
:11:33. > :11:40.almost two years ago. It was talking about your first four years at QPR.
:11:41. > :11:47.He promised to rough up the diamond. The debts were 20 million. Now they
:11:48. > :11:54.are ten times that thanks largely to money wasted on the wages of players
:11:55. > :11:58.and agencies. Tony Fernandes has practically nothing to show for it.
:11:59. > :12:04.I obviously disagreed that the many people went down that road. We had a
:12:05. > :12:09.solid squad, a nice academy, we are well on our way to building a new
:12:10. > :12:13.stadium. You have not got the Premier League. Without it the
:12:14. > :12:18.income is not there and you will lose money. We still have good
:12:19. > :12:24.income from the Paris payments. Two years. We want to get back to the
:12:25. > :12:30.Premier League, without doubt. You also stand accused of flouting the
:12:31. > :12:35.financial rules that govern how much clubs can spend. The financial fair
:12:36. > :12:41.play rules means you are still in dispute with the football league,
:12:42. > :12:47.facing a vast fine which could kill off the club if you are forced to
:12:48. > :12:57.pay it. We will wait for that to come. Ever since we have been
:12:58. > :13:02.completely aligned with the rules. I don't want a comment. There must be
:13:03. > :13:12.a Plan B. It would be insane to bet the house. We would not be in the
:13:13. > :13:20.airline business to be didn't have a Plan B, C, D... That goes for QPR as
:13:21. > :13:27.well. Lots of potential. Five years is the life of a football club. They
:13:28. > :13:30.have been around for a long time. Southampton was down in the third
:13:31. > :13:37.division. You have to be strategic. A basic problem is the stadium for
:13:38. > :13:44.Queen's Park Rangers does not hold a thousand people. Arsenal built one
:13:45. > :13:49.for 60,000 people. You cannot survive in English football without
:13:50. > :14:00.a decent stadium. What will you do? I agree. That is why we have been
:14:01. > :14:04.working busily with the Mayor of London and the local authorities.
:14:05. > :14:09.Your original plan was knocked back. No, it is still there. No one I
:14:10. > :14:13.speak to things it will be built. That is what they said to Daniel at
:14:14. > :14:17.Tottenham and he is on to building. Building in London is tougher than
:14:18. > :14:21.building an airline. With patience and the right emphasis we will get
:14:22. > :14:25.there. Will you sell the club given everything we have talked about, the
:14:26. > :14:29.frank admission that you have lost money every year, will you sell
:14:30. > :14:33.Queens Park Rangers? No. In the same way with the airline has had other
:14:34. > :14:38.and downs and people asked us to close down AirAsia Indonesia and
:14:39. > :14:42.Philippines and we said no, we are not a short-term quarterly company,
:14:43. > :14:48.I am not a short-term person. We see a plan and so we will see the plan
:14:49. > :14:53.through. And I remain positively optimistic. No plans to sell. Let's
:14:54. > :14:58.get back to aviation and something that you alluded to earlier. That is
:14:59. > :15:02.the personal impact and perhaps the worst thing that has happened to you
:15:03. > :15:06.in your business life, which was the crash of one of your aircraft, which
:15:07. > :15:13.I believe was flying from Indonesia to Singapore. It crashed into the
:15:14. > :15:21.Java Sea, loss of more than 160 lives. You took it very personally.
:15:22. > :15:26.Absolutely. You know, it was a body blow. Probably the worst nightmare
:15:27. > :15:34.of any CEO. We are one big family in AirAsia. We lost four crew, two
:15:35. > :15:39.pilots and an engineer and all those families. You gave the families your
:15:40. > :15:43.mobile phone number at one point, saying if you want to reach out, if
:15:44. > :15:48.you want to call you can reach me direct. It is an extraordinary thing
:15:49. > :15:54.for a boss to do. We were sitting in Malaysia, and the lawyers were
:15:55. > :15:57.saying don't go out, it is an Indonesian airline, you don't need
:15:58. > :16:03.to go out. I sat there for five minutes and I said, this is our baby
:16:04. > :16:07.and brand. I have to go out. I have to go out there for the families.
:16:08. > :16:12.They all know about me. And I have to go out there for my staff. You
:16:13. > :16:16.can't just be there for the good thing. You have to lead from the
:16:17. > :16:20.front for the bad things. Was there an element of guilt in the way that
:16:21. > :16:26.you responded? Obviously you didn't know at the get go what caused it.
:16:27. > :16:30.It has become clear that your two pilots, I am quoting the
:16:31. > :16:34.investigation, this is not to be taken lightly, the investigation did
:16:35. > :16:38.indicate that the pilot and the co-pilot had frankly mishandled what
:16:39. > :16:43.was a technical problem with the writer. And it raised questions
:16:44. > :16:48.about the training of your staff -- rudder. I don't think that is
:16:49. > :16:52.correct. It was cataclysmic, loads of things happening at the same
:16:53. > :17:01.time. The pilots were one element of many things that had not gone right.
:17:02. > :17:06.And so, no, there wasn't killed. My job, though, I was determined -
:17:07. > :17:11.safety is a marathon. No airline can say it is safe. You have to keep
:17:12. > :17:15.looking at things, how to make it better. I am determined for the
:17:16. > :17:20.people we lost that we will do the very best that we can. In that sense
:17:21. > :17:26.aviation is probably more sensitive to safety issues than any other
:17:27. > :17:32.industry that I can think of. 100%. Have you fully recovered from the
:17:33. > :17:37.perception fallout of what happened? In some ways we came out of it quite
:17:38. > :17:44.well, the way we handled it. And in Indonesia we were very popular. From
:17:45. > :17:49.a financial perspective, we had our best year last year and we are
:17:50. > :17:54.looking very good this year. We are growing. You never come out of it.
:17:55. > :17:59.You know. It is in the back of your mind all the time. All you can do is
:18:00. > :18:02.to make sure you do the best at whatever you do. There is no
:18:03. > :18:08.guarantee. There is no guarantee, and it was me every day. Does it?
:18:09. > :18:12.Without a doubt, it does. You say you are determined to keep growing.
:18:13. > :18:18.Aviation is an interesting crossroads right now. You know, a
:18:19. > :18:24.lot of people travel. But the number is still forecast is a lot of
:18:25. > :18:28.potential to grow. But for you, you haven't succeeded in getting into
:18:29. > :18:36.international long haul. I think you looked at flying Europe... We have
:18:37. > :18:40.two airlines, AirAsia, easyJet and Ryanair, then AirAsia X, which has
:18:41. > :18:45.grown to over 40 aircraft. I have always said it was a medium haul
:18:46. > :18:50.model, so, four hours to about eight or nine, we do 10-hour flight.
:18:51. > :18:56.Europe is a bloodbath right now. All the Middle East carriers, you know,
:18:57. > :19:00.you look at the results. You are not interested in Europe to Asia? Not at
:19:01. > :19:04.the moment. Let them clean it up. The competition will sort itself
:19:05. > :19:10.out. Then we will go in. We are happy going to Asia and Australia
:19:11. > :19:14.and creating something we haven't before, and hub in Bangkok and Kuala
:19:15. > :19:19.Lumpur. If you want to grow rapidly in Asia it means, and I think your
:19:20. > :19:25.strategic view is the same, it means you are going to have to get deep
:19:26. > :19:29.into China, and the sort of secondary and tertiary airports in
:19:30. > :19:32.China. Correct. The problem there is the Chinese government clearly
:19:33. > :19:40.favours its own big three state airlines. I don't... How are you
:19:41. > :19:44.going to move into China? We are the first airline to be given a foreign
:19:45. > :19:50.airline, the first foreign airline to be given a local licence. China
:19:51. > :19:55.and certainly the state government see the tremendous value we give to
:19:56. > :20:01.the tertiary cities. We have gone into cities that have never had
:20:02. > :20:07.direct connectivity. So, China values us. Asia is not a one trick
:20:08. > :20:12.pony. India, we are also in. The first airline in India and China
:20:13. > :20:15.with a fantastic south-east Asian market and Japan starting in two
:20:16. > :20:21.weeks. We are nicely covered in Asia. A transport analyst in
:20:22. > :20:25.Singapore says the risk for AirAsia is that it will spread itself too
:20:26. > :20:31.thin. That has been set for 16 years. I have been written off many
:20:32. > :20:38.times. It could come true. Could do. 16 years... I have been through
:20:39. > :20:46.everything, earthquakes, bird flu, tsunamis, HARDtalk. We are still
:20:47. > :20:51.here. Before the end, as an aviation boss I need to ask you about
:20:52. > :20:54.emissions and your view of your responsibilities when it comes to
:20:55. > :20:58.climate change. The Paris accord tells us that there will be a
:20:59. > :21:04.wholesale de-carbonisation of the world economy by 2050. Aviation is
:21:05. > :21:09.one sector which, unless technology fundamentally changes, cannot
:21:10. > :21:15.de-carbonise. Well, no, aviation gives off 3% of nitrous oxides.
:21:16. > :21:18.Right now. The share of aviation is emissions is going to go
:21:19. > :21:23.exponentially up as other people massively cut their emissions.
:21:24. > :21:28.Yours, relatively... As they do. That is really out of my hands. The
:21:29. > :21:32.manufacturers will have to do it. From our part we have the newest
:21:33. > :21:38.engines in terms of the new GE engines. And we probably have the
:21:39. > :21:46.most seats per square foot of any airline. So we are doing. You mean
:21:47. > :21:50.you cram people in like cattle? Not like cattle but we don't put them in
:21:51. > :22:00.like FirstClass for instance. We are flying economically well and we work
:22:01. > :22:04.well with aircraft. Do you think the climate change moves that are being
:22:05. > :22:09.made is that passengers, looking forward to 2050, will have to accept
:22:10. > :22:13.they will have to pay effectively as sort of carbon price on the airline
:22:14. > :22:18.ticket price? 100%. I think that goes without doubt. I think the
:22:19. > :22:22.manufacturers have to find ways. We are working with a manufacturer who
:22:23. > :22:26.has taken a Formula One technique and trying to establish that on
:22:27. > :22:31.breaks to use that power. All our vehicles on the ground will be
:22:32. > :22:35.electric very soon. So we are working with the manufacturers to
:22:36. > :22:40.find ways. We have a lightweight seat which is three kilograms versus
:22:41. > :22:43.a normal seat of eight kilograms. A final thought for you which takes us
:22:44. > :22:46.back to the beginning of this conversation. I wonder whether one
:22:47. > :22:51.of the life and business lessons you have learned through these 30
:22:52. > :22:59.dramatic years is that you from now on will focus like a laser beam on
:23:00. > :23:03.your core business, aviation, or will you develop an interest? While
:23:04. > :23:08.I am at AirAsia that is my priority and I am laser focused on that. I
:23:09. > :23:12.won't be doing this for ever. You know, and when I do I have the
:23:13. > :23:18.dreams and passions. But they have to be done one at a time, or get the
:23:19. > :23:22.right management to do it. AirAsia, we are the lowest cost airline in
:23:23. > :23:25.the world is by far. We still have the best margins. A lot of growth. I
:23:26. > :23:31.don't think we are spreading ourselves thin. And I am very
:23:32. > :23:35.excited. One great aspect of aviation is data and that is going
:23:36. > :23:39.to be a very exciting times for airlines because we have fantastic
:23:40. > :23:43.data. If you want to share with us your next dream, do you want to do
:23:44. > :23:47.that? I would love to do low-cost hospitals. That would be a dream. My
:23:48. > :23:51.father was a very left-wing doctor and never believed in private
:23:52. > :23:55.medicine. I believe medicine is as inefficient as airlines were when I
:23:56. > :24:00.came in from the music business 16 years ago. And when you move into
:24:01. > :24:04.that sector, we will have you back on the show. But for now, Tony
:24:05. > :24:05.Fernandez, thanks for being on HARDtalk. Thanks very much. Thank
:24:06. > :24:26.you, Tony. Hot on the heels of
:24:27. > :24:29.Hurricane Harvey comes Irma, and this has the potential to be
:24:30. > :24:34.a catastrophic hurricane. Already a Category 5,
:24:35. > :24:37.we have sustained winds of 185mph,