By James Hookway
The future growth of budget airline AirAsia could depend on how
its flamboyant founder Tony Fernandes responds to the loss of
Flight 8501.
Crisis management experts say that so far the former music
executive is doing all the right things. "His style is to face the
crisis head on and take control of the message," said Goh Moh Heng,
president of Asia-based business and crisis management consultancy,
BCM Institute.
The 50 year-old Malaysian entrepreneur was in Surabaya, where
Flight 8501 originated, within hours after its disappearance was
reported. He briefed relatives waiting for news of the 162 people
on board. Then, ditching his customary red baseball cap, Mr.
Fernandes told reporters that his priority was to do what he can
for the families of the passengers on the plane, which was en route
to Singapore.
Mr. Fernandes also took to Twitter to post a stream of messages
linking to the latest statements from AirAsia or offering thanks
for messages of support sent to the airline, which switched colors
on its social media sites to gray instead of its usual red.
"To all my staff, AirAsia all-stars, be strong, continue to be
the best, " he wrote in one message. "The warmth and support from
the people of Indonesia has been incredible. Everywhere I go.
Nothing but pure support, " he said in another. He referred to the
missing plane as "my worst nightmare."
AirAsia's reaction to loss of Flight 8501 contrasts sharply with
the diffuse and sometimes contradictory messages that initially
followed the disappearance in March of Malaysia Airlines Flight 370
with 239 people aboard. Both the Malaysian government and Malaysia
Airlines faced criticism from passengers' families and some foreign
governments for their handling of the crisis.
The continuing search for Flight 370 in the southern Indian
Ocean continues to spur controversy; disagreements among experts
have led to search vessels being deployed to two separate search
areas hundreds of miles apart.
Since then, airlines have focused on what to do in such
crises.
"Lots of lessons have been learned," said Shukor Yusof, an
aviation analyst at Malaysia-based Endau Analytics.
He said Mr. Fernandes and other AirAsia executives will have to
step up their game if the airline is to maintain or expand its
market share in what is one of the world's fastest-growing but also
most competitive air travel markets. There are nearly 50 budget
carriers operating in Asia-Pacific, up from 10 in 2007. They
account for a quarter of air travel in the region.
AirAsia's chief task will be to head off any suggestion that its
low-cost business model had anything to do with the disappearance
of Flight 8501. Mr. Fernandes said Monday in Surabaya that it was
too early to consider any changes to the AirAsia's operations, but
the company will look into the possibility once a full
investigation is completed. He added that AirAsia hasn't begun
compensation discussions with passengers' next of kin.
Investors also need to be reassured. AirAsia shares fell 12% on
opening at the Kuala Lumpur stock exchange on the first day of
trading since the accident, paring their losses to close 8.5%
down.
If it succeeds in managing the crisis, AirAsia wouldn't be the
first company to emerge with its reputation intact.
In 1982, Johnson & Johnson recalled and destroyed more than
30 million capsules of Tylenol after seven people died in the U.S.
from pills that had been poisoned with cyanide. The company also
introduced tamper-resistant packaging. Sales recovered after Chief
Executive James Burke appeared in television advertisements and at
news conferences to explain what the company had done.
AirAsia's Mr. Fernandes is playing a similarly visible role.
Indonesia AirAsia is 49%-owned by Malaysia-based AirAsia.
"It's like Richard Branson and Virgin," said Mr. Goh, referring
to the British founder of Virgin Group whose public persona plays a
major role in his airline's reputation.
Indeed, it's often hard to tell where Mr. Fernandes ends and
AirAsia begins. "Tony is AirAsia and AirAsia is Tony," Mr. Shukor
said.
Since taking over AirAsia in 2001 for the token sum of 1 ringgit
(29 cents) and relaunching it as Asia's first budget carrier, Mr.
Fernandes has transformed air travel in the region. His forté is
persuading aviation regulators and other bureaucrats to grant
landing rights at a number of airports, furthering his mission of
enabling everyone to fly, as AirAsia's slogan puts it.
From its base in Malaysia, the company has spread across
Southeast Asia, seeding franchises such as Indonesia AirAsia. It
also operates in India and Mr. Fernandes plans to start a venture
in Japan next year, after pulling out of an earlier attempt to
crack that market in partnership with All Nippon Airways.
Mr. Fernandes's fame grew further after began hosting the Asian
version of "The Apprentice" TV show, taking a role originated by
Donald Trump. "I had to practice saying 'You're fired' in front of
the mirror," he said in an earlier interview.
Write to James Hookway at james.hookway@wsj.com
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