Air Asia X

What do Tony Fernandes and Richard Branson have in common, apart from being involved in the aviation industry?

Music.

Back in the 1970s, Richard Branson began selling vinyl records to retail shops from the boot of his car, proceeded from there to found Virgin Records and never looked back as he took the Virgin Group to great heights. Though Virgin Records is no longer among its stable of companies, today’s Virgin Group is involved in businesses ranging from entertainment to finance to … yes, travel. Virgin Atlantic flies people to 29 destinations in the United States, the Carribean, Asia, Africa and Australia, while Virgin Blue is a low-cost airline in Australia.

Tony Fernandes was a financial controller at Virgin Communications in London and later joined Warner Music International London from where he progressed to become its Asean vice-president. He bought a multi-million, debt-ridden Air Asia from DRB-Hicom for RM1 in 2001 and turned it around in one year. Today, Air Asia is the premier name among low-cost airlines plying this side of the globe and its name is globally seen on television whenever anyone watches Manchester United play at their Old Trafford stadium.

I would presume that Fernandes and Branson first crossed paths when the former was still with Virgin Communications. Seeing how Fernandes has been growing his business in a style similar to Branson’s, it’s not hard to deduce that Fernandes looks to Branson for inspiration as a business model time and time again.

Go figure how. Tune Hotel is a natural progression for Fernandes in the travel and hospitality industry. And more recently, Tune Money is his no-frills venture into the financial sector. Tune Hotel. Tune Money. Tune. Music. Get it?

Today, speculation runs rife in Malaysia that Branson’s Virgin Group is buying a 20 per cent stake in Air Asia X, which will operate long-haul flights out of Kuala Lumpur to the far reaches of Europe, Asia and Australia. Another 20 per cent will be sold to Air Asia, and the rest held by Tony Fernandes and friends.

Branson’s entry into Air Asia X will raise the bar for airline operators in this part of the world. In particular, other budget airlines flying within or into South-East Asia, like ValuAir and JetStar, will be forced to take Air Asia X operations into their radar screens. Closer to home, it will meet both Malaysia Airlines and Singapore Airline head-to-head for travellers’ pockets. Protectionist policies are facing an imminent melt-down.

The sky is going to be a very crowded space very soon and with Branson bringing credibility and weight into the business, Air Asia X will be in an enviable position to take the lead once it begins operations. With its promise of lower air fares on long-haul flights coming true soon, there’s only one reason to fly … by Air Asia X.