ASEAN Governments Should Adopt Global Aviation Trends, Says Fernandes

21st Jun 2016

AirAsia Group Chief Executive Officer Tony Fernandes is of a firm opinion that ASEAN governments should free up airline ownership and embrace global aviation industry trends. Mr Fernandes cited a study made by the World Economic Forum which says that the old “nationality rule” had severely stunted the ability of carriers to attract investors, merge with other airlines or sell their shares.

According to Fernandes, the ASEAN aviation rules referring to the airline ownership are outdated and are killing jobs.

Mr Fernandes said:

Why can’t airlines in ASEAN own each other? Actually, maybe it’s time for some mergers. Maybe it’ll be tough for me, but if the competition is good, if I'm not good enough, then I should not be here. Does ASEAN need 10 airlines? If you look at Europe now, many airlines are merging. British Airways owns Iberia, bought Aer Lingus, Ari France-KLM. There’s more of it happening.

Continuing, he said:

We have been pushing for common ownership. Lion Air has Malindo Air, Thai Lion. VietJet has an airline in Thailand (Thai VietJet Air). It’s time for ASEAN to start allowing ASEAN airlines, common ownership and better use of capital.

When asked if the biggest obstacle to this came from national pride, Fernandes remarked:

That’s what I don’t understand. It is one of the most bizarre things in my 14 years I have seen… that the flag carrier is almost as big as the flag. Now mature countries have changed that. If you think about it, what is the flag carrier of America? You don’t know, right? Pan America maybe, but now American, United Delta, etc. I don’t understand why everyone is so hard up on national carriers. Does a country need a national carrier? That’s the question I ask.

Fernandes added:

Malaysia Airports Holdings Berhad can own an airport in Turkey 100 per cent. Chinese airports can buy Frankfurt airport, they are looking at negotiating. Heathrow is owned by my friend. He is a Spanish guy. So why are airlines like this?

Fernandes Ponders Restarting Malaysia-Singapore Airlines

On the topic, Fernandes even seemed open to the idea of restarting a long-time defunct Malaysia-Singapore Airlines (MSA).

This airline was formed in 1966 as a joint cooperation between the governments of Malaysia and Singapore, after the later left the Malaysian Federation that year. MSA had to cease operations in 1972 when the two countries decided to set up their own national airlines – Malaysia Airlines and Singapore Airlines.

MSA flew to Malaysia, Hong Kong, Thailand, Vietnam, Myanmar, Indonesia, Brunei and Borneo before becoming defunct.