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AirAsia Faces Its Biggest Crisis

AirAsia was built up from two planes in 2001 to an airline industry giant that operates more than 180 aircraft in just over a decade but now faces its biggest ever challenge.

A dream run for the airline and its flamboyant boss, Tony Fernandes, turned sour on Sunday, as Indonesia AirAsia reported an Airbus A320 with 162 people on board went missing during a flight from the Indonesian city of Surabaya to Singapore.

"This is my worst nightmare. But there is no stopping," Fernandes said on his Twitter feed, which has nearly one million followers.

"I as your group CEO will be there through these hard times. We will go through this terrible ordeal together and I will try to see as many of you."

The plane went missing after pilots asked to change course to avoid bad weather. Indonesian authorities called off the search as darkness fell on Sunday evening and will resume at first light.

Indonesia AirAsia is 49 percent owned by Malaysia-based AirAsia, with local investors holding the rest.

Fernandes' Twitter presence and profile have paid off for the airline but his personal involvement is likely to make this a devastating blow for a man who has been so closely identified with the rise of one of Southeast Asia's most visible companies.

The AirAsia group of airlines has had a virtually unblemished safety record until Sunday compared with competitors such as Malaysia Airlines and Indonesian carriers Lion Air and Garuda Indonesia which have lost several planes in crashes over the last decade.

"Tony Fernandes and AirAsia are highly regarded with the aviation industry. The airline is highly successful and had an excellent safety record," said John Strickland, director at London-based JLS Consulting.

BIG ORDERS

The AirAsia group, which includes affiliates in Thailand, the Philippines and India, has become a major competitor to regional carriers such as Malaysia Airlines, Singapore Airlines and Qantas.

Southeast Asian carriers Lion Air and AirAsia have led an aircraft buying spree and placed record orders worth tens of billions of dollars with Airbus and Boeing as they push to get people flying in a region forecast to overtake the United States as the biggest aviation market.

With 475 aircraft ordered or delivered, AirAsia has emerged as the biggest Asian customer of Airbus. The orders have been so large they have earned a footnote in the world's largest trade dispute between Airbus and Boeing over mutual accusations of illegal subsidies.

The airline has been feted by European politicians as it became one of the largest single export customers for European industry and helped secure thousands of jobs.

Still, Fernandes, a UK-trained accountant and former Warner Music executive, prefers wearing jeans and his trademark red AirAsia cap. The chairman of British Premier League football club Queens Park Rangers happily poses for photographs with admirers.

Fernandes has had a long-running war of words with flag carrier Malaysia Airlines and has pushed hard for landing rights and butted heads with the Malaysian government over securing new routes.

News of the missing plane comes at the end of a disastrous year for the country's airlines, with MAS losing two aircraft this year.

Over the last few months, AirAsia's profits have taken a knock due to a price war in its home market and it has had to defer some aircraft orders, with signs of over capacity in some Southeast Asian markets.

(Reuters)