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