Air Asia’s CEO Tony Fernandes hands over reins to Omar

19-June-2012

Growing profits by four to five-fold is the aim of Tony Fernandes, AirAsia group chief executive officer, as he moves to Jakarta to drive the airline'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 per cent over time is there,” Fernandes said yesterday after announcing Aireen's appointment.

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.

The Malaysian operations contribute 75 per cent 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 1 million ringgit (US$317,107).

“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 per cent 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 per cent domestic and 40 per cent 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.