Saturday, January 10, 2009

Tony Fernandes' Art of War - KLIA-East at Labu

He has tamed the tiger in MH and fought the lion in SQ. And won. In these battles, he played the underdog so well. He talked about unfair competition in taking on GLCs and the existing duopoly as he quietly go about his expansion plans. Most importantly he got the message across and swayed public opinion to stand with the David battling against Goliath. Public opinion can influenced government decisions.

Don't be mistaken he is not just a prize fighter but also a consummate lover. When it comes to love he is equally successful. He cut deals with finesse in Thailand and Indonesia. Everything was kept under covers until the agreements were signed, sealed and delivered. So strong was his charm and so strategic was the partnership that when AirAsia Thailand started operations, there were murmurs that it got some very strategic Check-in counters in Don Muang airport. His best scoop was when even Richard Branson of Virgin Airlines bought in and invested in AirAsiaX.

This week Tony is in the news again. He is not battling for AirAsia's survival as it is thriving or making history with another award as he has a stash of it. He is shaping the future of AirAsia. No ambitious corporate figure can escape from this path. But first he has to fight and love at the same time. He has to fend off Malaysia Airports Holdings Berhad (MAHB)'s stifling grip and embrace Sime Darby's offer that will result in unrestricted growth for many years to come.

The tug of will and the uneasy relationship with MAHB may end soon. Tony has chosen the right partner in Sime Darby, another GLC. He touted Sime's 3,000 acres of land and confidently asserted that the airport will be completed by 2011 with private financing. And the coup de grace, the plan for Labu has received Cabinet approval as MAHB plan for the LCCT has fallen short by a long margin.

He is gung-ho that the new terminal will be ready in 2011. Called KLIA-East@Labu it will serve AirAsia only. The airline (from LCCT) flew about 10 million passengers in 2008 and has estimated it will fly 12.3 million passengers in 2009; 15.7 million in 2010; 19.4 million in 2011 and 30 million by 2013. By then it would be expanded to fly 50 million passengers with an added runway. By operating their own airport, it claimed, costs can be cut by 20%. It will also be able to provide if it choose to, seamless transfer for its transit passengers and will make Labu into a truly international LCC hub. But most important, it has control over its own turf.

Outflanked and outmaneuvered MAHB has to play to second fiddle in the LCC business. They will loose AirAsia business and the new LCCT within KLIA will be smaller. MAHB MD Datuk Seri Bashir Ahmad was quoted as saying, “We still need to provide an LCCT at KLIA for airlines other than AirAsia that will fly into Kuala Lumpur."

Meanwhile MAHB loss, it Sime Darby's gain. The equally visionary and ambitious Sime Darby wanted the new terminal to be a catalyst to grow its Vision Valley development. This Vision Valley master plan of housing, recreational, wellness and health facilities is aimed at meeting the needs of the Klang Valley population which is set to grow to 10 million by 2025.

Get ready for the marriage of these two behemoths.


minchow said...

It's certainly heartening to see 2 parties teaming up to take on MAHB, who's been too cocky for their own good. Private multi-party deals the ultimate recipe for toppling GLCs? Although, it's said that Air Asia is a GLC in private garb...

SimpleGirl said...

But I think is stupid to have another terminal for Air Asia, as KLIA is super under utilized airport, sometimes, like a haunted place haha....

worldwindows said...

550mljof... MAHB slow to see the need and response in time. They will lose a lot of money with AirAsia gone from LCCT or even their new LCCT with KLIA.

SG... KLIA works on a different business model/platform compare to LCC. Anyway the MAHB Masterplan kind of a too little too late.

Labu may not be the best but it is better than the stalemate at the moment. The consumer and the country wins with Labu. With AirAsia expansion KLIA (incl Labu) air passengers volume will overtake that of Changi in 2013. This is double that of KLIA 's 2008 total of 27.5 mil.