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tv   HAR Dtalk  BBC News  September 25, 2017 4:30am-5:01am BST

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as german chancellor, after parliamentary elections, but her party's support dropped dramatically. the right—wing alternative for germany will win seats in the federal parliament for the first time. the centre—left social democrats had their worst result since 1933. the row between president trump and some high—profile sportsmen and women has grown. more than 100 american footballers protested during the playing of the national anthem at games on sunday. what began last year as a protest against racism escalated after the president's criticism. the regional government of iraqi kurdistan is going ahead with a referendum on independence later on monday, despite international opposition. the move has been fiercely opposed by the iraqi government. now on bbc news, hardtalk. welcome to hardtalk. i am stephen sackur. there is a special breed of business
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leaders who acquire a public profile far beyond their core business. think trump, branson, and a host of others. but is a flamboyant style and diversification into sports or media necessarily good for the bottom line? my guest today is one of asia's best—known businessmen, tony fernandes, boss of airasia, football club owner, one—time formula 1 investor, and a dabbler in reality tv. is it easy to lose sight of what matters most to business success? tony fernandes, welcome to hardtalk. thanks very much. thanks for having me. you have been in business for, what, three decades now. is the tony fernandes that does business today different from the young man who set out? i hope to think a little bit smarter, a little bit older and wiser, but in principle the same, the same tony fernandes from 30 years ago. what about attitude to risk? umm, maybe a little bit more cautious, maybe thinking a little bit more. but overall, i don't see much difference.
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i think decisions have to be made critically. i think changing management is critical, especially in this day and age, and sometimes procrastination analysis, paralysis by analysis, as i call it, is a detriment to business. i always talk to my management team about being able to change and adapt quickly. i have thought that for 30 years. one of the fascinating things about you is cultural as much as business. you, and i said it in the introduction, you made your fortune and your name by introducing a new form of cheaper budget aviation travel to asia. and you are, of course, proud to be asian. and yet, as people listen to your voice, and as they perhaps listen to your attitudes as well, you seem culturally quite western educated, in the uk, working for branson for a while. do you see yourself as an integration of both eastern and western models?
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yeah. i never thought i would work in malaysia. going back, i had a bit of trepidation. but business is business. i have the ability to be a chameleon, you can throw me in any part of the world, china, korea, humour is humour, business is business... is that really true? from the little time i spent in cultures like japan, for example, it struck me, not speaking japanese, but japanese business culture is fundamentally quite different to what we see in europe. that is true, that is true, but alcohol is a great leveller. well, in some countries that wouldn't work. maybe you are not so big in those countries. fine, but social occasions, i bring to business a lot of the relationship. much of it is done socially, creating relationships that go beyond the office. it doesn't matter if you
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are injapan, india, the middle east, people are the same. they would say people want all the frills, "low—cost will never work," they say. they are surprised. when you get something injapan they wrap it up in about 25 pieces of paper. but when you strip it down, people want simplicity and a low fare, and they want to travel more. did you make enemies in asia? you brought a european model of airlines to asia. you took over airasia but you transformed it. you had seen what o'leary was doing with ryanair and with southwest airlines in the us as well. i wonder how much difficulty you had persuading asian consumers and governments there was a market for a low—budget concept in asia. consumers were easy. governments had been much tougher. in our part of the world,
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governments own the national carriers 90% of the time and the airports. so, i am only beginning, after 15 years, i'm beginning to see people say, "wow, this will make a difference to our economy." but it has been a hard slog and we made many enemies, definitely. i'm mindful also, you learned some of your marketing skills at the feet of richard branson, working quite a while for virgin records. was branson an inspiration for you? i mean, do you model yourself a little bit on his iconoclastic approach to business? i always say the last person i want to be is richard because i have no preconception of going into a balloon at 36,000 feet, or even going to the moon... you aren't saying
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you are a wolf now? he was definitely an inspiration. he challenged the norm. he set up airatlanta to do something different against british airways at that time. and anyone who said he was not inspirational who worked for him, they are not telling the truth. he certainly was. he set a new paradigms. he challenged the establishment. and in some ways that obvoiusly had an effect on me. and he also saw there was a value to projecting a very strong personal brand to drive the business. have you done that yourself, conscoiusly or deliberately? that came out of necessity. we had no money when we started airasia. there wasn't a marketing budget. my marketing director said we have to make some controversial statements, and always wear your cap, because they will take photographs of you. i am a gregarious person anyway.
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it wasn't difficult to do that. but ego—driven business can go too far. oh, 100%. i always say "you're only as good as tomorrow." as soon as use start believing your own press, that is the end of you. let's talk about the fine line between being a successful brand yourself, using that to drive your business, looking like an egomaniac, let's look at you in 2013, like donald trump and sir alan sugar, lord sugar now, in the uk, you wanted to get into the business of reality tv. here is a promotional video of a show he launched in 2013. he asks the hard questions. who do you think was the weakest? whose fault is this? he's very sharp. are they ganging up on you? it was messy. it was poor time management. he can't be fooled. who is telling the truth? he is shaking his head. it is a disaster. and he will fire someone. you have your chance to be fired
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if that's what you want. i have had enough. you're fired. tony fernandes! apprentice asia! compared to donald trump you are actually quite polite, to be honest. it is funny you say that. a couple of things, looking at that makes me cringe, to be honest. my marketing team... i turned it down for two years. i kept saying i am not a donald trump or alan sugar. in the end they said do it how you want to. my marketing team in airasia were very keen for me to do this. did you get bored with running airasia? is that why you began to look for these other things? and i'm going to talk in a minute, injusta moment, about your activities in sports and leisure and the whole diversification of your brand. is it because you got bored? well, i think initially... airasia, we are a small little airline in malaysia.
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0urfirst global event was sponsoring manchester united. very painfulfor me because i hate that football club. we all have to be a prostitute once in a while. that became, umm, building a brand. based in the uk, richard gets a phenomenal amount of media and a phenomenal amount of attention, while ourselves in malaysia, it is hard to get heard. so we saw sport and music as a way to build the brand. it is a question about where priorities are and are running the risk of getting distracted. you have 200 aircraft, 150 destinations, you are committed to aviation. but as you become more ambitious and take more on, you, tony fernandes, are telling the staff you have taken over a football club, by the way i want to get into formula 1... you are correct. i did it for 11 years. i felt it was time for me to move on to other things. and formula 1 was getting me involved in the car business which we still have. football was a passion.
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there was no business sense in football. i think, in this programme i have said it many times publicly, focus is key. did you lose it for a while? and i think airasia suffered a little bit, yeah. i think after our incident in indonesia where we lost an aircraft. 160 plus people dying. it brought me back to reality and ifelt i needed to refocus on the baby that i built. since then that has been my number one priority. i exited formula 1. football is run by les and the boys. that's les ferdinand, former player at queen's park rangers, he's now your director of football. is football like any other sport? is it your most immoral? two days ago it was very moral, we did that game for grenfell. i think that was a great
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advertisement for football. it's the market. if someone wants to pay £200 million for the player, thatis the market. i am for the free market, i'm a free—marketeer. it has immense highs and lows. i have been incredibly high and incredibly low. it is a phenomenal passion. it can be run as a business, and many are running it very well as a business. let's be clear, you've lost money big—time. big—time. this is from the times newspaper. this was written almost two years ago. it was talking about your first four years at qpr. tony fernandes promised to polish up west london's rough diamond, a reference to queen's park rangers. back then ,the debts were 20 million. now they are pretty much ten times that thanks largely to money wasted on the wages of
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players and agencies. and tony fernandes has practically nothing to show for it. i obviously disagree. many people went down that road. we have a solid squad, a nice academy, we are well on our way to building a new stadium. but you know you haven't got the premier league. without it the income is not there and you will lose money. we still have good income from the payments for another two years. obviously we want to get back to the premier league, that is without doubt. you also stand accused of flouting the financial rules that govern how much clubs can spend compared with their revenues, if i may say so. the financial fair play rules means you are still in dispute with the football league, facing a vast fine which could kill off the club if you are forced to pay it. we will wait for that judgement to come. what will you do if you lose?
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ever since we have been completely in line with the rules. i don't want to comment. you must be a plan b. it would be insane to bet the house and farm. we would not be in the airline business to be didn't have a plan b, c, d... that goes for qpr as well. but we will wait and see. we are happy with qpr. we built something. west london, lots of potential. five years is not the life of a football club. they have been around for a long time. southampton was down in the third division. that's true, but you have to be strategic. a basic problem is the stadium for queen's park rangers doesn't even hold 20,000 people. arsenal built one for 60,000 people. spurs are building one for 55,000, actually nearly 60... you cannot survive in english football without a decent stadium. so, what are you going to do?
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no, you can't. i agree. so, what're you gonna do? that's why we've been working busily away with with the mayor of london and the local authorities. but your original plan for a new stadium was knocked back. no, no. it's still there. goldam common. nobody i speak to thinks it's ever gonna be built. that is what they said to daniel at tottenham, and he's on his way to building. building in london is tougher than building an airline. but with patience and the right emphasis we'll get there. might you sell the club, given everything we have talked about, given the very frank admission that you have lost money every year, will you sell queens park rangers? no. in the same way with the airline has had ups and downs and people asked us to close down airasia indonesia and philippines and we said no, we are not a short—term quarterly company, i am not
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a short—term person. we see a plan and so we will see the plan through. and i remain positively optimistic. no plans to sell. let's get back to aviation and something that you alluded to earlier. that is the personal impact and perhaps the worst thing that has ever happened to you in your business life, which was the crash of one of your aircraft, which i believe was flying from indonesia to singapore. surabaya to singapore. it crashed into the java sea, loss of more than 160 lives. you took it very personally, didn't you? absolutely. you know, it was a body blow. probably the worst nightmare of any ceo. but we are one big family in airasia. we lost four crew, two pilots and an engineer, and all those families. you gave the families your mobile phone number at one point, saying, if you want to reach out to me, if you want to call me, you can reach me direct, which is a pretty extraordinary thing for a boss to do.
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we were sitting in malaysia, and the lawyers were saying, don't go out, it is an indonesian airline, you don't need to go out. i sat there for five minutes and i said, this is our baby and this is our brand. i have to go out there. i have to go out there for the families, because they all know about me. and i have to go out there for my staff. you can'tjust be there for the good things. you have to lead from the front for the bad things. was there an element of guilt in the way that you responded? obviously you didn't know at the get go what caused it. it has become plain that your two pilots, i am quoting the investigation, this is not to be taken lightly, but the investigation did indicate that the pilot and the co—pilot had, frankly, mishandled what was a technical problem with the rudder. and it raised questions about the training of your staff.
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no, no, i don't think that is correct. it was cataclysmic... loads of things happening at the same time. the pilots were one element of many, many things that had not gone right. and so, no, there wasn't guilt. myjob, though, iwas very determined... safety is a marathon. no airline can say it's safe. you have to keep looking at things, how to make it better. i'm determined for the people we lost that we be the very best at whatever we did. in that sense aviation is probably more sensitive to safety issues than any other industry that i can think of. 100%. have you fully recovered from the perception fallout of what happened ? in some ways we came out of it quite well, the way we handled it. and in indonesia we were very popular. from a financial perspective, we had our best year last year and we are looking very good this year.
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we are growing. but you never come out of it, stephen. you know. it's in the back of your mind all the time. all you can do is to make sure you're the very best at whatever you do. but there is no guarantee. there is no guarantee, and it still haunts me every day. does it? without a doubt, it does. you say you are determined to keep growing. aviation is an interesting crossroads right now. you know, a lot of people travel. but the numbers still... forecasts are there's still a lot of potential to grow. but for you, you haven't succeeded in getting into international long haul. i think you looked at flying europe... we have two airlines, airasia, which is the easyjet and ryanair, then we have airasia x, which has grown to a0 aircraft. i have always said it was a medium—haul model, so, you know, four hours to about eight or nine, we do a flight that is 10 hours.
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europe is a bloodbath right now. all the middle east carriers, you know, you look at the results. you are not interested in europe to asia? not at the moment. let them clean it up. the competition will eventually sort itself out. then we will go in. we are happy going to asia to asia, asia to australia, and creating something we haven't before, and a hub in bangkok and kuala lumpur. if you want to grow rapidly in asia it means, and i think your strategic view is the same, it means you are going to have to get deep into china, and the sort of secondary and tertiary airports in china. correct. the problem there is the chinese government clearly favours its own big three state airlines. i don't... how are you going to move into china in that climate? we are the first airline to be given a foreign airline... the first foreign airline to be
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given a local licence. china and certainly the state government see our tremendous value that we give to the secondary and tertiary cities. we have gone into cities that have never had direct connectivity. so, china values us as much as we value the china market. asia's not a one trick pony. india, also we are in. we are the first airline in india and china with a fantastic south—east asian market, and we have japan starting in two weeks. so we're nicely covered in asia. corrine png, she's a transport analyst in singapore, says the risk for airasia is that it is gonna spread itself too thin. yeah. that has been said for 16 years. i have been written off many times. it could come true. could do. but, i mean, 16 years... i have been through everything, earthquakes, bird flu, sars, tsunamis, hardtalks. we are still here, still make record profits. before we end, as an aviation boss i need to ask you about emissions
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and your view of your responsibilities when it comes to climate change. the paris accord tell us that there will be a wholesale de—carbonisation of the world economy by 2050. but aviation is one sector which, unless technology fundamentally changes, cannot de—carbonise. well, no, aviation gives off 3% of nitrous oxides. right now. the share of aviations emissions is going to go exponentially up as other people massively cut their emissions. yours, relatively... as they do, as they do. that's really out of my hands. the manufacturers will have to do it. from our part, we have the newest engines in terms of the new ge engines. and we probably have the most seats per square foot of any airline. so, you know, we're doing our bit. you mean you cram
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people in like cattle? not quite like cattle but we don't put them in like first class, for instance. we're flying economically well and we work very hard with air traffic control and all these people so that we burn fuel efficiently. but, in breif, do you think one of the messages is that climate change moves that are being made is that passengers, looking forward to 2050, will have to accept that they will have to pay effectively a sort of carbon price on the airline ticket price? 100%. i think that goes without doubt. but i think the manufacturers have to find ways. we're working with a manufacturer who has taken a formula one technique of kers and trying to establish that on brakes so that we can use that power. all our vehicles on the ground will be electric very soon. so we're working with the manufacturers to find ways. we have a lightweight seat, which is only three kilograms, versus a normal economy seat of eight kilograms. a final thought for you, which takes us back to the beginning of this conversation.
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i wonder whether one of the life and business lessons you have learned through these 30 dramatic years is that you from now on will focus like a laser beam on your core business, aviation, or are we going to see tony fernandes develop yet new interests? no. while i'm at airasia, that's my priority, and i'm pretty much laser—focused on that. i won't be doing this forever. you know, and when i do i have other dreams and passions. but they have to be done one at a time, or get the right management to do it. airasia, we're still the lowest cost airline in the world is by far. we still have the best margins. a lot of growth. i don't think we're spreading ourselves thin. and i'm very excited. one great aspect of aviation is data, and that's going to be a very exciting times for airlines, because we have fantastic data. and if you just, in a word, want to share with us your next dream, do you want to do that? i would love to do low—cost hospitals.
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that would be a dream. my father was a very left—wing doctor and never believed in private medicine. i believe medicine is as inefficient as airlines were when i came in from the music business 16 years ago. and when you move into that sector, we'll have you back on the show. but for now, tony fernandes, thanks for being on hardtalk. thanks very much. thank you, tony. hi there. most of us will have enjoyed some fairly warm weather for late september over the course of the weekend. sunday had the highest temperatures. in a few spots we had highs up to 23 celsius, 73 in fahrenheit. about five celsius warmer than it normally is at this late stage of september. so, as i said, pretty warm for the time of year. we have also had a weather front with us and for some that's been bringing outbreaks of rain. the rain over recent hours has been getting a little bit more widespread, but this weather front, this lump of cloud, has wiggles all over it and that means pulses of rain are working along the front. certainly not an even spread of rain, some getting more than others. but nevertheless, some dampness around to start the day i think for much of scotland,
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england and wales. it will be a mild start to the day. through the rest of monday, this weather front‘s going to find it difficult to move eastwards because we've got this big blocking area of high pressure sat across scandinavia and europe. that means the weather front‘s week, it also means the weather front‘s going nowhere fast any time soon. now, for the far west of wales and parts of south—west england, we could have some brighter spells first thing, but otherwise for many areas of england and wales it's rather cloudy start to the day. mild but with the risk of some rain. in northern ireland it's different. here a mixture of sun and dense patches of fog that could cause problems out on the roads. scotland, dull and damp to start the day. now, through the rest of the day our weather front stays more or less in the same kind of area but the rain will tend to fizzle out on it as the weather front continues to weaken through the rest of the day. so, by the time we get to the afternoon, most of us will have drier weather, perhaps brightening up across east anglia and south—east england. the best of the sunshine further west, particularly in northern ireland, once we've got rid of that
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early morning fog. here's the chart for tuesday. the front is still with us, draped across scotland, england and wales. but barely any rain left on it at all. now, as we go through the day, again that cloud will thin and break up, we'll see increasing amounts of sunshine coming through. and in the sunshine, yes, it's still pretty warm for the time of year. highs of between around 16 and 21 celsius for most of us. now, there will be some changes towards the middle part of the week as the atlantic begins to wake up. this weather front moves in from the west and it's going to be bringing some fairly heavy and persistent rain with it across ireland and northern ireland. but later this week, generally it is going to turn more unsettled with rain at times, becoming quite windy, and those temperatures coming back down to normal. that's your weather. this is bbc news. i'm tim willcox. our top stories: a fourth term in office for angela merkel, but her authority is weakened and the right—wing nationalist afd becomes germany's third party. i'm damian grammaticas live in berlin. mrs merkel must now build
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a coalition in a political landscape that has greatly changed. in other news, the us imposes new travel restrictions on eight countries, including north korea, venezuela and chad. a warning from bali — this volcano could be ready to blow for the first time in half a century. and in business, merkel comes out on top in germany's elections,
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