Monday, 31 October 2016

AirAsia' s Fernandes sees a different airline industry in 10 years

BY  TEE LIN SAY

AMSTERDAM: Ten years from now, the airline industry would be more focused and different types of airport and consolidation would take place, said  AirAsia Bhd  Group CEO Tan Sri Tony Fernandes.

Fernandes also hoped it would be a much nicer experience to travel, where there would be a lot less processes and long waiting queues.

&ldquo Data and profiling should be able to capture the information of a passenger, hence requiring a lot less administrative immigration issues,&rdquo

&ldquo I&rsquo ve been going to Heathrow for the last 20 years, and they ask me the same question everytime. They know me by now!&rdquo said Fernandes during the CAPA-ACTE Global Summit.

Established in 1990, CAPA stands for &lsquo Centre for Aviation&rsquo which is the leading provider of independent aviation market intelligence, analysis, reports and data services worldwide.

On a more serious note, Fernandes said that the airline industry is now at an inflection point.

Airlines have to decide whether or not they want to be full service carriers or low cost carriers.

They cannot do both.

&ldquo The mistake of airlines now is that they want to do everything on their own. This will be a disaster.

&ldquo You can make money whether you choose to be a Perodua or a Rolls Royce,&rdquo he said.

As a result of the airline carriers being more focused, Fernandes also foresees different types of airport in the future.

This is because the needs of a passenger who travels business class is very different from those who travel low cost.

In terms of consolidation, Fernandes expected the emergence of one to two super carriers moving forward.

&ldquo Does Asean really require 10 national carriers? I think moving forward, you won&rsquo t have a Thai Airways or a Laos Airways for example, but there will be a merger of some sorts,&rdquo he said.

Fernandes also did not believe in the airline industry being cyclical, particularly for low-cost carriers. &ldquo It&rsquo s how you manage your business,&rdquo he said.

Fernandes added that the airline industry was probably one of the most highly-regulated industries in the world.

With so much government involvement, it&rsquo s not surprising why most airlines historically generate very poor return on capital.

&ldquo We shouldn&rsquo t be nationalistic and encourage too much protectionism. As long as an airline brings economic benefits to a country, it should not matter where that airline comes from,&rdquo said Fernandes.

He pointed out that the good thing now was that governments were starting to view tourism as a positive and significant economic driver.