Failure is an option is another traits of
entrepreneurial. Failure means lack of success, a failing in business, loss
something or an omission of occurrence or performance. Everyone will face
failure include entrepreneur itself. The different that separate entrepreneur
with normal people is when facing failure, entrepreneur will not easily give up
and they will see failure as an option. Entrepreneur believe that they have the
ability to solve the problem themselves and create a more perfect ideas instead
of giving up.
Relegation
of Tony Fernandes’s English Football Team
Tony Fernandes’s big heart was
crushed when he himself watched his Queens Park Rangers (QPR) football team
mauled by Manchester City for the match result of 6-0 on 10 May 2015 in the
English Premier League (EPL). QPR have been relegated to the second
championship league although Tony had spent much funds hoping that QPR can stay
in the EPL. Tony hates failure, but he has to admit that QPR are not good
enough for the EPL, like what the football pundits said. QPR seems have to stay
in the second tier for a long time after this.
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Fernandes became the majority owner of the Queens Park
Rangers
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The
Embarrassing Exit from Formula One Motor Racing
Tony loves sports and ventured
into the Formula One World Championship racing under the Lotus brand before
moving on to Caterham. Caterham F1 team competed in the Formula One World
Championships since 2012, following the acquisition of the British sports car
manufacturer Caterham Cars, by Tony as the owner and team principal.
In July 2014, Tony and his
partners conceded defeat and announced that they had sold the team to a
consortium of Swiss and Middle Eastern investors because of its poor
performance in Formula One. This made Tony no newcomer to failure.
Catastrophic
Crash at Tony Fernandes’s Indonesian Airline
Tony is a globally recognized
icon in the world of business who was working as a manager in a music company
in Kuala Lumpur before he took over a defunct airline and transformed it into
the world’s leading budget airlines (AirAsia). He became fabulously successful
but has tasted the bitter end and knows what it is like to fail. Besides
AirAsia, he is into budget hotels, the insurance and mobile telecommunications
industries where he is being pressed hard to prosper at present.
He is highly acclaimed and
seen as ‘a man with the Midas touch’ but yet he has had his fair share of
failures and might perhaps be starting to look a lot more ordinary and a mere
mortal after all. What goes up must surely have to come down. However, perhaps
the biggest blow and come-down-to-earth for Tony was when an AirAsia plane on a
flight from Surabaya to Singapore’s Changi Airport crashed into the South China
Sea killing all 162 passengers and crew on board. This was probably the biggest
blow or failure in Tony’s life. He had tried his hand at various businesses and
was highly successful but there is evidence to suggest that he also had a fair
share of failures which is rarely highlighted. But with AirAsia as their one
liner goes: “Now everyone can fly,” Tony made available the opportunity for air
travel to be affordable for most people and made his name as an aviation
legend. But the air crash dented a heavy blow and tarnished his almost perfect
reputation.
It remains to be seen in the
near future if Tony will flourish or fail further and it looks as if it’s hard
to say if his much coveted legacy will stand or end up in tatters like many
other icons in this world who bit off more than they could chew.
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AirAsia CEO
Tony Fernandes In the Spotlight Following Missing Plane
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Attack
on Accounting Practices at AirAsia
It has been a hard year for
Tony Fernandes, who is battling to keep alive his dream to build an Asian
low-cost carrier that can match the success of Southwest Airlines in the US and
Ryanair in Europe.
Mr. Fernandes has rejected a
highly critical report by GMT, an independent equity research firm, that
alleges AirAsia is “teetering on default”. The company’s shares have lost
nearly a quarter of their value since the GMT report was released on June 10
and are languishing at a five-year low.
GMT claimed in the report that
Malaysia-listed AirAsia has inflated group profits by recording earnings
derived from leasing aircraft to its troubled, minority-owned associate
airlines in Indonesia and the Philippines. At the same time, the parent group
has had to extend ever more credit to these associate airlines as their losses
mounted because of tough competition from dominant incumbents, GMT alleged.
With the Indonesian and Philippines’ airlines unable to repay the parent,
receivables owed to AirAsia by its associates, joint ventures and related
parties jumped to Rm2.5bn ($665m) in 2014, from just Rm1.3bn in the previous
year, according to GMT, leaving the group with a net debt-to-equity ratio of
263 per cent, the highest among its regional peers.
“Don’t be fooled by AirAsia’s
fancy marketing,” wrote Gillem Tulloch, the founder of Hong Kong-based GMT, in
the June 10 report. “Real profits have collapsed and AirAsia now needs a
recapitalisation that will dilute existing shareholders by more than 100 per
cent.” He complained about limited financial disclosures by AirAsia, Asia’s
largest budget airline, saying management gave the impression of having
“something to hide”.
Mr Fernandes, a former
accountant who co-founded the airline in 2001 when he and his partners bought a
tiny, lossmaking Malaysian carrier for Rm1 ($0.27), has been rattled by the
attack. But the company has dismissed GMT’s allegations, insisting that it has
a “good business outlook”, is “rich in assets” and has a “strong balance
sheet”. It said AirAsia planned to address concerns about its associate
airlines by injecting a total of $72.9m of new share capital into the
Indonesian and Philippine units, alongside its local partners. AirAsia also
plans to raise at least another $100m for each associate by issuing convertible
bonds to new investors. “We’re a professionally run airline,” said Mr.
Fernandes, AirAsia group chief executive, in a Financial Times interview during
a trip to Indonesia and the Philippines to rally staff.
Tony insisted that AirAsia is not at risk of
default and has no need for a rights issue at the group level.
“This [GMT] report is rubbish,” said Mr
Fernandes. “We’re doing extremely well. Frankly I’ve been disappointed with the
equity market. They’ve known us for 14 years and there’s nothing in that report
that hasn’t been disclosed already.”
Mr. Fernandes, whose Tune Group is AirAsia’s
largest shareholder, added: “It’s preposterous to suggest that there’s any
intention to hide. The fact that we’re so transparent allowed them to write
that report. We declared far more than we needed to.”
Most analysts have rallied to the defence of
AirAsia, arguing that while it is facing short-term difficulties, the group’s
structure is advantageous. Michael Beer, analyst at Citigroup, says accounting
treatments at AirAsia are “among the best”.
But Rajani Khetan, analyst at HSBC, shares some
of GMT’s concerns about AirAsia’s large intercompany debts and its business
model.
“We not only view AirAsia’s recent updates on
funding plans for associates with scepticism, but also argue claims of
improving prospects are unvalidated,” she wrote in a note on June 22.
But she believes the group can reduce its
losses, partly by scaling back its fleet expansion plans — AirAsia is one of
the biggest customers of Airbus, the jet maker, with more than 300 aircraft on
order.
Where did it go wrong for Mr Fernandes, who
confidently told the FT just two years ago that to go into the airline business
“you’ve got to have balls or you’ve got to be insanely stupid”?
His airline’s motto is “now everyone can fly”
and it has sought to capitalise on the ability of Southeast Asia’s fast-growing
middle class to afford cheap flights. However, expanding AirAsia across the
region has involved establishing a corporate structure that complies with local
rules that prohibit foreigners from owning majority shareholdings in airlines.
The group therefore took minority stakes in AirAsia-branded businesses in
Indonesia, the Philippines and Thailand, as well as new ventures in India and
Japan, but exercises de facto control over these companies by leasing aircraft,
providing maintenance and extending credit where necessary.
While Mr Fernandes enjoyed success in his home
market and Thailand, he has come up against resilient, well-connected rivals in
Indonesia and the Philippines. Losses at the AirAsia businesses in Indonesia and
the Philippines mounted at a time when the group was aggressively buying new
passenger jets and southeast Asian economies were starting to slow.
Analysts have grown increasingly concerned
about airlines expanding too fast in Asia, because it puts pressure on fares
and therefore profits. The situation was compounded by a demand shock last year
after three high-profile incidents involving aircraft from the region: AirAsia
Indonesia flight QZ8501 and Malaysia Airlines’ MH370and MH17.
Shaken, but not deterred, Mr Fernandes is
trying to maintain his bullish disposition, arguing that AirAsia’s prospects
are improving because of cheaper fuel resulting from lower oil prices and the
reorganisation of state-owned rival Malaysia Airlines, which could see it scrap
routes.
“I love proving people wrong and I’m
reinvigorated by this [GMT] report,” he said. “But words are cheap. If we
perform as we say we will, people will see tremendous value in AirAsia stock.
Based on Tony Fernandes cases,
we can see that failure is an option, for both things we hate and things we
enjoy. He chose to pursue the latter. He is willing to involve himself in
fields that he has strong interest and strong desire for achievements despite
there are obstacles along his journey to success.
