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September 24, 2017

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AirAsia leaving Kuala Lumpur, makes Jakarta new base of operations

The Star/Asia News Network --Adieu Kuala Lumpur, welcome Jakarta!

The big move has begun and Jakarta will be home for AirAsia Bhd. after being based in Kuala Lumpur for a decade.

It is growth beyond Malaysian shores which is tempting AirAsia.

"Growth in Malaysia will be boring at a single digit of 3 percent, 4 percent to 5 percent but countries like Vietnam, the Philippines and Indonesia are where there is plenty of opportunities over the next 10 to 15 years and that should keep AirAsia bus," a Maybank Investment analyst said.

It is for these reasons — though AirAsia's diplomatic answer for wanting to relocate is to be near the Asean permanent secretariat — that it is shifting to Jakarta.

"When we started, we did not have a vision but somehow we became very big and now we have to look at how to manage," AirAsia group chief executive officer Tony Fernandes said in an interview recently.

"What really pushed him to make the bold decision to relocate was the unwinding of the share swap with Malaysia Airlines (Mas)," he said.

The share swap between both airlines ended in May due to objections from Mas unions.

It was only when he was director of Mas did he realize what "fantastic operations" he and his long-time business partner Kamarudin Meranun had built of AirAsia over the past decade.

"It was the unswap that woke me on the potential of the AirAsia. You don't appreciate it until you see it (from the other side) and if I had put in the same energies for Mas into regional development (just imagine the possibilities). All this has given me a new lease of life and I cannot tell you how excited I am of AirAsia's future and the future is really good for us," he said.

Although he was sad over the unwinding, he said: "I am glad it is over."

Fernandes and Kamarudin started AirAsia a decade ago with two aircraft but grew to have operations in Thailand, Indonesia, the Philippines and Japan. It also has a medium-haul sister airline in AirAsia X.

It is eyeing five more joint ventures in markets like China, South Korea, Vietnam and India.

Fernandes alluded that he would also like to set up AirAsia Africa.

The airline may have grown by leaps and bounds into a regional low cost carrier and competition is a given for AirAsia but its biggest challenge is really about staying focused and in implementation.

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