5.1 AirAsia’s Success in Asia
5.1.1 The Emergence of AirAsia
AirAsia was established in Malaysia in1994 and began operations in 1996. In December 2001 the heavily indebted airline was bought by Tony Fernandes's company, and he turned the company around by remodeling AirAsia into a low-cost carrier. Until now, AirAsia group has established subsidiaries in India, Thailand, Philippines, Japan and Indonesia. It has been named as the world's best low-cost carrier as well as a pioneer of low-cost travel in Asia. By early 2013, AirAsia had seen a steep increase of 168% in its profits as compared to 2012.
After Tony Femandes took over AirAsia, the airline industry in Asia had a gloomy outlook due to the combined effects of the economic downturn, terrorist attacks on 11 September 2011 and the outbreak of Severe Acute Respiratory Syndrome (SARS) in 2002. Many analysts commented that the low cost model would not work in Asia owing to different factors, such as regulatory restrictions and competitions from incumbent airlines.