Fernandes sees change in airline industry
TEN YEARS from now, the airline industry would be more focused, there would be different types of airports and consolidation would take place, said AirAsia CEO Tony Fernandes.
It would be a much nicer experience to travel, as there would be a lot fewer processes and long queues.
“Data and profiling should be able to capture the information of a passenger, hence requiring a lot less administrative immigration issues.
“I’ve been going to Heathrow for the last 20 years, and they ask me the same question every time. They know me by now!” said Fernandes during the CAPA-ACTE Global Summit.
Established in 1990, CAPA stands for Centre for Aviation, 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 they want to be full service or low cost.
“The mistake of airlines now is that they want to do everything on their own. This will be a disaster.
“You can make money whether you choose to be a Perodua or a Rolls Royce,” he said.
As a result of the carriers being more focused, Fernandes also foresees different types of airports in the future.
This is because the needs of a passenger travelling in business class are very different from those travelling low cost.
In terms of consolidation, Fernandes expected the emergence of one to two super carriers moving forward.
“Does Asean really require 10 national carriers? I think moving forward, you won’t have a Thai Airways or a Laos Airways for example, but there will be a merger of some sorts,” he said.
Fernandes also did not believe in the airline industry being cyclical, particularly for low-cost carriers.
“It’s how you manage your business,” he said.
The airline industry was probably one of the most highly regulated in the world.
With so much government involvement, it’s not surprising why most airlines historically generate very poor returns on capital.
“We shouldn’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,” he said.
The good thing now was that governments were starting to view tourism as a positive and significant economic driver.
