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22 May, 2014

AirAsia CEO: “Visit Thailand to see what a coup that is not a coup looks like”

By Imtiaz Muqbil in Manila

Manila – AirAsia Group CEO Tony Fernandes says he has seen no downward impact of the Thai martial law on flights to Thailand. On the contrary, he told delegates at the World Economic Forum on East Asia, AirAsia is promoting Thailand and encouraging people “to go and see what a coup that is not like a coup looks like.”

The issue came up within the context of a discussion at the opening panel discussion on the relationship between political stability and economic growth. All the delegates on the panel agreed that political stability was a fundamental prerequisite but declined specifically to comment on the Thai political situation.

The CNBC anchor Martin Soong, who was moderating the session, asked Mr Fernandes if he had seen any impact on AirAsia flights to Thailand. Mr Soong seemed taken aback when Mr Fernandes responded that AirAsia flights had been unaffected and that TV images of tanks on the streets were sending an indirect assurance of safety.

Hence, he said, AirAsia was actually promoting Thailand.

“There is always an opportunity,” Mr Fernandes said, emphasising the word ‘always.’ “People are now immune to this. We have not seen any numbers going down. People are flying to Thailand like normal. We are at the sharp-end of this, and (if there had been any impact), we would first see this in our business. But there is a strong resilience. People are becoming quite adept at dealing with such situations. Of course, when there were riots and demonstrations, there was an impact. But now with the military, there appears to stability. That’s a fact.”

This year’s WEF for East Asia is focussing on the theme of “Leveraging Growth for Equitable Progress.” The WEF describes ASEAN as one of the economically fastest-growing regions in the world, with extensive opportunities and challenges emerging just one year away from the 2015 ASEAN Economic Community.

That will create a common market of more than 600 million people and a combined GDP of nearly US$ 2 trillion, according to the WEF.

The opening session set the scene for more detailed discussions to follow. Along with Mr Fernandes, speakers included Muhamad Chatib Basri, Minister of Finance of Indonesia; Cesar V. Purisima, Secretary of Finance of the Philippines; Victor L. L. Chu, Chairman and Chief Executive Officer, First Eastern Investment Group, Hong Kong SAR; and Lee Il-Houng, Ambassador for International Cooperation and G20 Sherpa, Republic of Korea.

They sought to put some perspective on a mind-boggling range of issues confronting Asia and ASEAN in an historic period of tumultuous and constant change. These included the pressure on natural resources, good governance, corruption, leadership, dismantling of trade barriers, ease of doing business, reforming financial markets, building infrastructure, empowering the people and more.

However, Mr Fernandes’ comment stood out because it went against the grain of a seemingly depressing litany of problems and also proved that conventional wisdoms about “democracy” being always a good thing may not necessarily be true.

Mr Fernandes also noted that with the ASEAN Community set to take shape next year, there would be many more opportunities for growth by tapping into the large population base. This potential could be better tapped if governments started putting national interests above vested interests, and facilitate business by removing barriers and impediments and helping reduce costs of doing business.

He said that since launching AirAsia 12 years ago, growth has come by connecting communities that were previously not connected. Although the concept of ASEAN open skies would create opportunities for more connectivity, it would also need to be accompanied by dismantling other “invisible barriers” such as airport slots.