How Tony Fernandes Built AirAsia's Culture—and What Leaders in Other Industries Can Learn From It

In June 2023, AirAsia CEO Mr. Tony Fernandes joined Mr. Gita Wirjawan at an event in Bali—recently published on Mr. Wirjawan's YouTube channel a few days ago—for an enlightening conversation about leadership, resilience, and corporate culture.

Drawing insights from that eventful discussion, I'd like to explore how Mr. Fernandes crafted a culture that not only propelled AirAsia to global prominence but also offers invaluable lessons for business owners and corporate leaders across all industries.

Mr. Fernandes didn't just build an airline; he built a thriving ecosystem where people are the cornerstone. 

His unorthodox approach emphasizes transparency, empowerment, and flattening hierarchies—a leadership style that has turned AirAsia into a model of success and resilience. 

Here's how he did it—and how you can apply his principles to your own organization.

The Power of Transparency and Openness

When Mr. Fernandes acquired the failing AirAsia in 2001, one of his first moves was to eliminate the walls—literally.

"I noticed that employees were scattered across eight different offices," he recalls. "I thought, how disjointed is this?"

Mr. Fernandes consolidated everyone into a single, open-plan office. There were no private offices, not even for him. 

By removing physical barriers, he fostered an environment of open communication and trust.

"Everyone has my mobile number," he says. "If you have a problem, just text me or come see me. We have nothing to hide."

Lesson for Leaders: 

Break down barriers—both physical and hierarchical. Open communication fosters trust and collaboration, enabling your team to tackle challenges more effectively.

Flatten the Hierarchy

In traditional corporate structures, layers of management can stifle innovation and slow down decision-making. Mr. Fernandes wanted none of that for AirAsia.

"We have a very flat structure," he explains. "No one is more important than anyone else. Everyone contributes to the company's success."

This approach empowers employees at all levels to voice their ideas and take ownership of their work. It also accelerates innovation, as good ideas don't get trapped in bureaucratic bottlenecks.

Lesson for Leaders: 

Empower your employees by flattening your organizational structure. When team members feel their contributions matter, they're more likely to go the extra mile.

Empowering Employees to Soar

Mr. Fernandes is a firm believer in spotting "diamonds in the rough" and giving them opportunities to shine. Take, for example, a ride-hailing driver who aspired to be a pilot.

"He told me his dream was to fly," says Mr. Fernandes. "We supported him, and he passed the test to become a pilot trainee."

AirAsia was also the first airline in Southeast Asia to hire female pilots, challenging industry norms and promoting diversity.

"If a woman can run a country, she can certainly fly a plane," he quips.

Lesson for Leaders: 

Invest in your employees' growth. Provide opportunities for advancement and break down barriers that prevent talented individuals from reaching their potential.

Leading by Example

Mr. Fernandes isn't the kind of CEO who stays hidden away in an office. He gets involved directly—often quite literally.

"I used to carry bags once a month and check in passengers," he says. "You can't be a good leader unless you're prepared to get down on the ground and know exactly what's going on."

This hands-on approach gives him invaluable insights into the challenges his employees face, allowing him to make informed decisions that improve operations.

For instance, after helping load luggage onto planes, he realized the physical strain on staff and invested in belt loaders to ease their workload.

Lesson for Leaders: 

Don't be afraid to get your hands dirty. Understanding the day-to-day operations of your business will make you a more effective leader and earn you respect from your team.

Cultivating Cross-Functional Collaboration

Mr. Fernandes encourages collaboration across all departments. When engineers suggested changes to landing procedures to save costs, pilots were initially resistant. He facilitated a meeting that led to significant cost savings and improved team cohesion.

"Everyone thought, 'Why should engineers tell pilots how to fly?'" he recalls. "But we got them together, and it resulted in increasing tire lifespan from 50 to 500 landings per set."

Lesson for Leaders: 

Break down silos within your organization. Encourage different departments to collaborate and share ideas. The results can be groundbreaking.

Building a Resilient Culture

Perhaps the most compelling testament to AirAsia's culture is how it weathered the COVID-19 pandemic. 

With revenues plummeting from $5 billion to zero, the airline faced unprecedented challenges. Yet, the company survived—and is now thriving again.

"What took us through COVID was our culture," says Mr. Fernandes. "We had to let go of staff, cut salaries—it was painful. But our people understood the situation, and now we've rehired everyone and restored full pay."

Lesson for Leaders: 

A strong culture isn't just a "nice-to-have"; it's a critical asset in times of crisis. Invest in building a resilient culture now, and it will pay dividends when challenges arise.

Disrupting Industries Beyond Aviation

Mr. Fernandes didn't stop at transforming the airline industry. He eyed the ride-hailing sector, aiming to disrupt it by treating drivers better.

"I noticed motorbike riders hiding under bridges when it rained because they didn't have raincoats," he says. "We hire our drivers full-time, give them insurance, and treat them with respect."

By focusing on the well-being of gig economy workers, he is actually challenging the status quo and setting new industry standards.

Lesson for Leaders: 

Look for opportunities to disrupt industries by addressing unmet needs—especially when it comes to how businesses treat their people.

The Human-Centric Approach Pays Off

All these strategies boil down to a simple philosophy: people are your greatest asset.

"Accountants can't put a value on culture, but it's huge," Mr. Fernandes emphasizes. "Your biggest asset is the people in your company."

This human-centric approach doesn't just create a positive work environment; it drives business success. 

AirAsia maintains the lowest operational costs in the industry, enjoys high employee retention, and has a brand reputation that many airlines envy.

Lesson for Leaders: 

Prioritize your people, and the profits will follow. Happy, empowered employees lead to satisfied customers and a healthier bottom line.

Final Thoughts

From my professional point of view, Mr. Tony Fernandes's leadership at AirAsia is a masterclass in building a strong corporate culture. 

His emphasis as a top leader on transparency, empowerment, and leading by example has not only propelled AirAsia to new heights but also offers a blueprint for leaders in any industry.

In a time where businesses often focus on short-term gains and overlook the human element, Mr. Fernandes reminds us that investing in people is not just good ethics—it's good business.