Tony Fernandes, CEO, AirAsia Group: Interview

Interview: Tony Fernandes

Which roadblocks do entrepreneurs face in ASEAN economies, and where are there opportunities?

TONY FERNANDES: There are some countries where entrepreneurship is difficult because the government owns everything. The government should create and enable entrepreneurs instead of interfering with their businesses. For example, there is potential for a huge conflict of interest when you own an airline or an airport and private entrepreneurs are involved. All stakeholders have to understand their role in order to compete on a regional and international level.

The potential this region holds is immense in terms of opportunities for the emergence of burgeoning businesses, especially on the digital front, and is not only limited to the aviation, travel and tourism industries. If all 10 member countries combine to form a single market and production base, this will create a community of over 700m to tap into. ASEAN can provide a much bigger platform and a much larger stage on which businesses can be noticed and grow.

What is the correlation between the expansion of the aviation industry and the growth of entrepreneurship in secondary and tertiary cities in ASEAN?

FERNANDES: The importance of aviation in a globalised world is beyond question, and macro-urban planning should prioritise the construction of airports. Job creation, increased tourism and economic development are all spill-over effects of a global aviation hub. With a city-state attached, this would also be a catalyst for the future economic competitiveness of any secondary and tertiary cities within ASEAN. Developments such as highways, tourist attractions and landmarks, rail links and modern utilities will be required to meet increased demand, and this translates to widespread job creation.

The potential within ASEAN countries for new hubs is great. Standout examples are the Philippines, with international airports in Clark and Manila, and Thailand’s airports in Don Mueang, Suvarnabhumi and U-Tapao.

What these countries have in common is that they are among the fastest-developing ASEAN members, and it is clear that their respective authorities are advocates for these airports being catalysts for development, evidenced by current expansion plans.

How do you perceive the progress made towards the development of a single ASEAN market?

FERNANDES: It is not easy to become a global brand from a country like Malaysia, but we became relevant because we are were a part of ASEAN. It is time the ASEAN business community takes a bold step towards commonality and standardisation. We should have one ASEAN regulator to ensure unified standards without relying on a consensus that requires approval from all 10 countries for important initiatives to move forward. Within aviation, a unified economic community would help reduce costs by having common standards, such as one air traffic control system and one engineering system, as well as truly open skies and common ownership. As an ASEAN company, we should be able to own 100% of a Filipino airline and vice versa.

Is the dominance of legacy, family-run conglomerates in some ASEAN markets restricting space for start-ups and young entrepreneurs to flourish?

FERNANDES: The dominance of family-run conglomerates that monopolise the market signifies that there is competition – especially for start-ups to flourish. From my perspective, competition is what helps people, businesses, industries and, ultimately, economies grow.

I am an advocate of fair competition, simply because it makes us better. There have been various examples where the monopoly of an industry has had a detrimental effect because the corporation does not care about its customers, but the customers simply have no other option. Healthy competition is the way forward for start-ups to flourish into new national and regional champions, as long as they respect their competitors.