Investment banker turned airline chief, AirAsia X CEO Benyamin Ismail shares with justin ng on the democratisation of air travel, value creation for passengers and the bond with his children
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Benyamin ismail was first introduced to opportunities at AirAsia while he was bursting a lung or two during a gruelling boot camp in Petaling Jaya. They say the early bird gets the worm. Benyamin got his at 5am. The inductor was a certain Aireen Omar, then head of corporate finance and investor relations. She is now deputy group CEO (digital, transformation and corporate services). “AirAsia was a client I was dealing with at CIMB and it was there that I was introduced to Aireen,” he reveals, adding he was somewhat sceptical to venture into a new role and industry such as aviation.
He might have reason to be apprehensive. He was attached to CIMB Investment Bank at that time and specialised in debt capital markets. Aviation was an aspiration that he never acted upon. “Growing up, I wanted to also be either a lawyer from watching the TV series L.A. Law or an architect from my artistic passion and skills I have,” says the 41-year-old. “But like many other children, I have always been fascinated by the aviation industry and how an aircraft can fly in the sky.”
His ardour for flying seems a necessity as much as it is a pleasurable pastime. Benyamin used to fly alone as an unaccompanied minor as the circumstance dictated due to his parents’ work placement. When AirAsia X inaugurated flights to Hawaii, he flew alongside guests to Honolulu and welcomed them to the Pacific islands made famous by Elvis Presley. Now he bonds with his children through collecting aircraft models and spotting planes – a hobby he enjoyed as a youngster.
Nonetheless, appearing undaunted, he went ahead for an interview and a further meeting with Tan Sri Tony Fernandes. That sealed the deal as he left investment banking for AirAsia in March 2010 to take up the role of head of investor relations, before rising to group head of investor relations, corporate development and implementation. When AirAsia X’s previous CEO Azran Osman-Rani tendered his resignation in January 2015, Benyamin assumed the position of acting CEO and was appointed fully-fledged CEO a few months after.
Four years into his current capacity, Benyamin maintains he is still as driven as the day he first set foot in the airline’s office. There are the everyday challenges that keep him on his toes. There are also the two elders, in the form of Fernandes and Datuk Kamarudin Meranun, who have taken him under their wings. “They are both very charismatic and inspiring leaders and their passion continues to motivate me every day,” he says.
AirAsia X is unlike many other airlines, be it full service or even its own short-haul sibling AirAsia, due to its business model. The pioneer of low-cost long-haul airline came into existence following a rebranding exercise completed in September 2007 from Fly Asian Express. The maiden flight took off in November 2007 at the now-dismantled LCCT and landed in a small regional airport in the Gold Coast, Australia. Today, it operates the eight-hour flight out of KLIA2 to Coolangatta once a day, seven times a week.
11 years in, Benyamin says AirAsia X has proven “the lowcost long-haul airline product is a viable business model”. He points out that as of last year, the airline has carried over 40 million guests from its main hub in Kuala Lumpur to China, Japan, South Korea, Australia or even Hawaii in the US with some of the lowest fares in the region. “Air travel today is not a luxury for the affluent few,” he says. He is right. AirAsia X is the only Malaysian airline that transports passengers non-stop to exotic destinations such as Hokkaido, Japan and doing so affordably, even if a ski holiday remains elusive for most people.
If imitation is the sincerest form of flattery, the airline has blazed the trail for anyone that wanted to follow in its footstep in the region. Scoot is one of them. While others rely on codesharing with affiliated airlines, the AirAsia group utilises its clout in connectivity, via local subsidiaries and regional hubs, with over 130 destinations in the region.
“When I first came into this role, I viewed it as an exciting but very challenging role as the airline and industry in general was facing turbulence. Together with my leadership team, we have had to make some difficult decisions to manage costs and ensure we maintain streamlined operations. It was really challenging back then, but within
“FOR US, WE WANT TO BE THE ENABLER TO CONNECT PEOPLE BETTER, MORE OFTEN AND CONTINUE TO REVOLUTION IS ETHE AVIATION INDUSTRY”
a year, we managed to turnaround the airline and returned to profit,” he recalls the challenging times at the start of his reign when jet fuel prices were rising in tandem with crude oil prices.
But as oil prices begin to ascend past US$80 a barrel after a lean couple of years, it will prove to be a road block for the airline to manoeuvre around to achieve consistent profitability, especially with ringgit is as weak as it is. According to the quarterly financial report ended 30 June 2018, AirAsia X posted a pretax loss of RM64.78 million. Fuel expenses were RM440 million, compared to a total revenue of RM1.05 billion and a net operating loss of RM99 million.
“We have some fuel hedging in place, but we are always cautious,” Benyamin says, adding fuel is one of the largest cost components for any airline. Jet fuel on average was US$89 per barrel in the period of April 2018 to June 2018.
“While we can’t control the fuel price, what we do best is to keep our cost low by improving internal processes and keep our fares competitive to stimulate regional demand… with no compromise on safety and comfort,” he says. To entice potential travellers, the airline has invested in digitalisation in order to curate better products and services for them. They have the freedom to pick and choose the optional products and services that suit their needs. A good example is the airline’s award-winning Premium Flatbed, which is very popular on flights over five hours. Furthermore, it inexhaustibly explores new routes to “attract new guests while keeping things interesting for our loyal guests,” Benyamin says. “Additionally, we always look at ways to provide a better flying experience for our guests through continuous improvement in everything we do.”
Guests can certainly look forward to a better flying experience with the airline. The long-haul group, inclusive of Indonesian and Thai affiliates, put pen to paper an order of 100 Airbus A330neo wide-body aircraft worth US$30 billion earlier this year. Airbus says the A330neo will be equipped with a state-of-theart cabin and in-flight technology to provide for heightened comfort and relaxed ambience during long flights. The new planes will reduce operational and maintenance costs through better design and aerodynamics. The greater efficiency and range will potentially allow AirAsia X to revive flights to Europe. “However, at this moment our focus remains providing the best connectivity in our core markets across Asia and Australia,” Benyamin says. “Enabling people to have great-value travel moments is what drives and motivates me to continue what I am doing with my fantastic Allstars.”
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