Bloomberg News

AirAsia’s Fernandes to Move to Jakarta as Airline Expands

May 25, 2012

AirAsia (AIRA) Bhd. Chief Executive Officer Tony Fernandes, one of Malaysia’s most successful businessmen, said he’s moving to live in Jakarta to help accelerate the regional expansion of Asia’s biggest budget carrier.

Fernandes has steered AirAsia’s growth from a two-plane operation to 110 aircraft in just over a decade, overtaking Malaysian Airline Systems Bhd. (MAS:US) as the country’s largest carrier by market value. He’ll move to live in the Indonesian capital in about two weeks where the group is setting up a regional office, while keeping Malaysia as its headquarters.

“Part of AirAsia’s success might require him to move away from the epicenter in Malaysia so that he can see the woods instead of the tree,” said Gerald Ambrose, who oversees 5.4 billion ringgit ($1.7 billion) in assets as managing director of Aberdeen Asset Management Sdn. in Kuala Lumpur.

The carrier has grown from its Malaysian roots to establish budget spin-offs in countries including Indonesia, Thailand and most recently the Philippines and Japan. Fernandes wants to form similar airline partnerships in South Korea, Vietnam and the Middle East.

“I get over-involved in the Malaysian operation,” Fernandes told reporters in Toulouse, southern France, where he was taking delivery of the airline’s 100th Airbus SAS A320 plane. “I should also be looking at Japan, Indonesia.”

About 20 AirAsia head office staff are moving to join him and help with regional strategy, Fernandes said.

More Planes

The group placed an order last year for 200 advanced A320neo planes to facilitate route expansion. It’s considering additional orders for Airbus single-aisle jets, he said.

AirAsia rose 4.1 percent to close at 3.60 ringgit in Kuala Lumpur today after news of its potential fleet expansion. The benchmark FTSE Bursa Malaysia KLCI Index gained 0.2 percent.

The parent of AirAsia’s Thai unit is slated to list shares in Bangkok this month. The airline’s Indonesian venture is also planning an initial public offering this year, it said last year.

Fernandes’s decision to move comes as AirAsia and Malaysian Air’s biggest shareholders this month unwound a share swap following protests by the national carrier’s biggest union.

He has had a “rough ride here in the past three months in the uncertainty with Malaysian Air,” Ambrose said. “He might think he wants to stand back and focus on the business.”

To contact the reporter on this story: Chong Pooi Koon in Kuala Lumpur at pchong17@bloomberg.net; Andrea Rothman in Paris at aerothman@bloomberg.net

To contact the editors responsible for this story: Barry Porter at bporter10@bloomberg.net; Neil Denslow in Hong Kong at ndenslow@bloomberg.net


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