Podcast Summary: LSE Public Lecture — Is ASEAN Still Relevant?

Speaker: Tony Fernandes (CEO, AirAsia)
Host: LSE Film and Audio Team
Date: December 4, 2013
Duration: ~80 minutes

Overview

This episode features Tony Fernandes, the founder and CEO of AirAsia and LSE alumnus, who delivers a spirited and inspiring lecture on the continued relevance of ASEAN (Association of Southeast Asian Nations). Sharing both his own journey in entrepreneurship and his experience scaling AirAsia across Southeast Asia, Fernandes explores the opportunities, challenges, and future pathways for regional integration. The event also includes a lively Q&A addressing political, business, and social aspects of ASEAN’s development.

Main Themes

• Entrepreneurship and Dream-Chasing in Southeast Asia
• Building AirAsia as an ASEAN Brand
• The Economic and Social Importance of Regional Integration
• Barriers to ASEAN Cohesion and Policy-Minded Recommendations
• Role of Private Sector in Spurring Integration
• Q&A: Addressing Trust, Inclusion, Policy, and Competition

Key Discussion Points & Insights

1. Fernandes' Career Journey & Philosophy

• From Music to Aviation: Tony Fernandes recaps his journey from the music business to starting AirAsia, with no aviation background and limited capital, demonstrating the power of daring to dream.
  • “Don’t let anyone tell you that you can’t do what you want to do. Live your life and live your dreams, because you have one life and you might as well give it a try.” (08:59)
• Influence of LSE Education: Emphasizes applying elasticity theory from LSE to create a new airline market by lowering prices and increasing demand.

2. AirAsia as a Test Case for ASEAN

• Brand Building Across Borders: AirAsia’s evolution into a single, unified brand, even amidst resistance from national regulators and cultures.
• Market Expansion:
  • Growth from two planes and 200,000 passengers to 150 planes and 44 million passengers in 11 years (13:42).
  • 50% of AirAsia’s routes were new, stimulating travel and commerce.
  • “We created a whole new market that just wasn’t there before by reducing the prices.” (13:28)
• ASEAN Branding Challenges:
  • It took 1.5 years to secure permission to use the ASEAN logo on a plane due to bureaucratic hurdles (25:32).
  • Fernandes’s experience integrating staff across countries, breaking down social and cultural barriers, even resulting in multinational marriages among crew.

3. Lessons in Resilience and Marketing

• Crisis Management: Flying through crises such as SARS, bird flu, Bali bombings, and natural disasters, AirAsia maintained or increased operations, capitalizing on opportunity through creative promotions.
  • “If you put a fare low enough, they will risk their lives.” (16:44)
• Value of Branding and Sport: Strategic sponsorships (e.g., Manchester United) helped AirAsia gain international visibility despite being a small, regional carrier.

4. The Relevance and Potential of ASEAN

• Market Size and Diversity:
  • ASEAN’s 600 million+ population represents an enormous, underexploited potential (18:22).
  • “Anyone who thinks [ASEAN] isn’t relevant, it’s very, very relevant just by the sheer size of people.” (18:37)
• Need for Economic Integration: Fernandes advocates morphing from a political to an economic community with unified regulations, markets, and capital flows.
  • “Imagine dealing with one aviation authority as opposed to ten. That would reduce the cost of business, reduce the fares, obviously, and increase the market.” (29:16)
• Human Capital Beyond Borders:
  • Emphasis on tapping unconventional sources of talent—from baggage handlers to pilots, including marginalized groups like women—showcases ASEAN’s underutilized strengths.

5. Barriers to True ASEAN Integration

• Political and Regulatory Hurdles:
  • Multiple authorities, national protectionism, and differing standards stifle progress.
    • “As an ASEAN member, I can’t own 100% of an airline in another country. Ryanair can own 100% in Poland. We can only own 49%.” (41:01)
  • “Singapore pretends to be the most open market...but that’s a fallacy completely.” (40:05)
• Lack of 'ASEAN Identity':
  • Few people in the region see themselves as 'ASEAN citizens'; more needs to be done to foster collective identity.
    • “What does ASEAN mean to the common man in ASEAN? Very little.” (28:00)
• Trust Deficit and Vested Interests:
  • “The biggest challenge? Trust and government. People have to believe there’s more to gain by working together than by remaining sovereign countries.” (58:34)
  • Vested interests—such as monopolists—resist liberalization to protect their market share.
• Role of Private Sector:
  • “If we want to see change, we have to make change ourselves. AEC will happen, but as long as you keep propagating it, people will see the benefits of one market.” (35:59)

6. Vision for the Future

• Dreams and Optimism:
  • Fernandes weaves personal anecdotes, including his dream as a 12-year-old to democratize air travel, illustrating how individual ambition and regional opportunity intersect.
  • “Dreams do come true. If there’s one thing you can take away—don’t let anyone tell you you can’t do anything.” (54:01)
• Role of Persistence:
  • Political and economic integration requires patience and consistency, appropriate for both business and the ASEAN agenda (78:51).

Notable Quotes & Memorable Moments

• On Branding:

  • “If I say Nike, you’re only thinking of the Swoosh. So we decided to drop the bird and focus on AirAsia.” (12:31)

• On Market Opportunities in Crisis:

  • “At 600 ringgit, no, I’m going to die. At 60 ringgit, who cares?” (16:44)

• On ASEAN’s Identity:

  • “There isn’t a minister for ASEAN affairs in any ASEAN country. It’s all under Foreign Affairs, so lots to do.” (61:53)

• On Cross-Border Challenges:

  • “I hate borders. To travel from one part of ASEAN to another is ridiculous. There’s not even an ASEAN line—just have to queue with everyone else.” (41:49)

• On AirAsia’s Internal Culture:

  • “We have 12,000 staff, everyone knows everybody, it’s very transparent. There’s no need for a union.” (32:45)

• On the Power of the Consumer:

  • “Let the consumer decide, and let the consumer decide who is the best. You can’t be the best in a protected market.” (38:01)

• Q&A — Challenges to Integration:

  • “Trust from each other, vested interests who don’t want markets to open up, and perseverance, I think, are the three big challenges. But I’m very optimistic.” (59:36)

Important Segments (Timestamps)

• Introduction & Setting the Scene: 00:00–01:40
• Tony Fernandes' Career Narrative: 01:40–09:46
• Founding & Strategy of AirAsia: 09:49–25:00
• Branding and Marketing—‘Love Bali’ Crisis Story: 15:22–18:02
• Discussion on ASEAN Identity and Market: 25:32–36:00
• Barriers to Integration, Policy Suggestions: 36:00–42:00
• Personal Reflections on Dreams and Achievements: 49:21–57:00
• Q&A: Trust, Competition, People of ASEAN, Policy Influence: 57:12–75:00
• Concluding Remarks: 78:51–80:21

Audience Q&A Highlights

• Main Challenges to Cohesion:
  Trust deficit and vested interests (58:34)
• ASEAN’s Impact on Daily Life:
  Lacks relevance to the everyday citizen (61:13)
• Efforts for Policy Influence:
  Formation of private sector groups like the ASEAN Business Club to lobby for liberalization and address resistance (64:41)
• Disability Inclusion:
  Mistakes at AirAsia’s inception corrected to provide free accessibility aids (70:51)
• ASEAN Secretariat’s Evolution:
  Needs to shift from a political organizer to a commercially-engaged think tank (71:36)
• Trans-Pacific Partnership (TPP):
  Seen not as an existential threat, but a signal ASEAN must strengthen economic integration and capital markets (75:54)

Tone & Style

Fernandes’ delivery is highly engaging, humorous, and candid, mixing self-deprecation (“you have to be a prostitute once in a while” [22:51]) with practical business advice and passionate advocacy for regional integration (“Dreams do come true” [54:01]). He relates regional policy themes to concrete business and personal experience, making complex issues accessible and motivational.

Key Takeaways

• ASEAN's relevance lies in its untapped human and economic potential; integration is challenging but essential.
• Market-driven, cross-border ventures like AirAsia offer blueprints for both the possibilities and pitfalls of building a cohesive ASEAN.
• Success depends on breaking down political and cultural barriers, embracing diversity, and continually pushing for reform and openness—driven as much by the private sector as by governments.
• Persistence, optimism, and willingness to dream “impossible” dreams remain vital for both entrepreneurs and policymakers in ASEAN.

For listeners seeking inspiration, business insight, or a window into the dynamics of Southeast Asian integration, this episode provides candid, energetic, and practical perspectives from one of the region’s most prominent innovators.