SINGAPORE: AirAsia Bhd boss Tan Sri Tony Fernandes has told staff and analysts that he will spend more time working on the budget airline and put his other business and sporting interests to one side, after a report questioning the companyâ€™s accounts sent its share price tumbling.
The chief executive has said his other work will take a back seat as he focuses on repairing the financial damage done to Asiaâ€™s largest low cost airline, according to analysts and two AirAsia executives who spoke to Reuters on condition of anonymity.
Analysts covering the airline said Fernandes told them that he, and his long-term business partner Kamarudin Meranun, would become more hands on.
â€œTony told us in a conference call last week that he and Kamarudin will take a back seat to everything else and focus on AirAsia,â€ said Mohsin Aziz, a Maybank Investment Bank analyst in Kuala Lumpur.
â€œHeâ€™s back, and heâ€™s getting more involved in many of the decisions,â€ added one executive.
AirAsia, Fernandes and Kamarudin did not respond to a request for comments.
Fernandes, one of Asiaâ€™s best known corporate leaders, has built a sprawling business empire over the past decade that includes English football club Queens Park Rangers, a hotel chain and an insurance business.
That has led to concerns among some AirAsia staff that he was spending too much time away from the airline just as it was expanding in Japan and India and facing an increasingly competitive landscape in South-East Asia.
AirAsia is the worst-performing airline globally out of mid and large-cap stocks so far this year, its share price falling losing more than 40% to give the carrier a market value of RM4.5bil.
Some executives said he delegated most of the running of the company to the heads of the groupâ€™s individual airlines and that he was in the office less-and-less.
Worries about his absences were exacerbated after a June 10 report by little known GMT Research said AirAsia uses related-party transactions with loss-making associate carriers to boost its earnings.
AirAsia shares are down 24% since the report was published.
The report has caused investors to question whether AirAsia is too reliant on its associates â€“ semi-independent airlines in countries around Asia that share its branding and pay it fees to lease planes â€“ given they owe increasingly large increasing amounts of money to the parent company.
Fernandes refuted GMTâ€™s report at the Paris Airshow last week, saying AirAsia has a solid balance sheet and business plan.
He is now working increasingly hard behind the scenes to put the finishing touches on a turnaround plan for the groupâ€™s beleaguered Indonesian and Philippine associates, according to staff members.
â€œHeâ€™s telling people that AirAsia is a small company without deep pockets or a saviour, and that everyone needs to pull together and work harder to prove that the report is wrong,â€ said the executive.
Last week the company said it expects its Indonesia unit to break even and its Philippine business to have returned to profitability by the end of this year.
Since 2007, Fernandes and Kamarudin have launched a chain of budget hotels, a mobile phone group, a school and ventured into financial services through their holding company Tune Group.
Last year Fernandes sold Caterham Formula One team, after owning it for five years.
He remains chairman of loss-making Queens Park Rangers, which has problems of its own after it was demoted from Englandâ€™s top league and is being scrutinised by The Football League over whether its accounts breached the sportâ€™s â€œFinancial Fair Playâ€ rules. â€” Reuters