Airasia Case Study

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THE RISE OF TONY FERNANDES AND AIRASIA IN MALAYSIA1

SHAHRIL EASHAK ISMAIL Monash Asia Institute, Monash University, Caulfield East Vic 3145, Australia Email: seism1@student.monash.edu

1

This paper was presented to the 18 Biennial Conference of the Asian Studies Association

th

of Australia in Adelaide, 5-8 July 2010. It has been peer reviewed via a double referee process and appears on the Conference Proceedings Website by the permission of the author who retains copyright. This paper may be downloaded for fair use under the Copyright Act (1954), its later amendments and other relevant legislation.

2

The Rise of Tony Fernandes and AirAsia in Malaysia This article discusses the emergence of Tony Fernandes and AirAsia. At first, when AirAsia was relaunched as a Low-Cost Carrier (LCC) under the leadership of Fernandes, no one thought the airliner would survive, let alone become a symbol of the liberalisation of the aviation industry in Southeast Asia. Second, Fernandes, a Malaysian Indian of Portuguese Malaccan descent – obviously not a Bumiputra2 - was able to thrive as an entrepreneur in an environment where the government gave top priority to Bumiputra entrepreneurs. These issues are discussed in this paper.

Malaysia’s New Economic Policy (NEP) The Malaysian Government has played a significant role in Malaysia’s rapid economic growth. After the independence in August 1957, the economy shifted from agriculture to industrialisation; an import-substitution strategy was adopted to reduce dependency on primary sector and simultaneously diversify the economy. By the late 1960s, with the exhaustion of import substitution, the Malaysian government made the transition to exportoriented industrialisation.

The May 1969 election and ensuing race riots resulted in the increased state…...

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