Air Raiders

It'

s only moments before takeoff when Tony Fernandes, CEO of high-flying budget airline AirAsia, rushes onto a plane destined for the Malaysian resort town of Kota Kinabalu. But there's no plum seat waiting for him. Even top managers at no-frills airlines don't get any frills. Fernandes treks through the crowded plane searching for an empty chair, ending up in one of the last rows. When flight attendants appear with a cart of sodas and instant noodles for sale, he plunks down 80¢ for a can of Milo chocolate drink. Fernandes then spends much of the two-hour journey chatting and shaking hands with each of the 140 passengers. After the plane touches down, he stands on the tarmac in his trademark red baseball cap, waves goodbye to the departing passengers and helps a team of baggage handlers unload suitcases from the cargo hold.

Fernandes wouldn't have it any other way. "I love it when I struggle to find a seat," he says, beaming. With ticket prices as low as 29¢--yes, you read that right — seats have often been hard to find. Fernandes expects to fly 4 million passengers this year, twice as many as in 2003. His success heralds a revolution in the airline industry in Asia. Although Americans and Europeans have benefited from low-cost air travel for years, tight regulation, powerful national-flag carriers and a dearth of airports have kept budget airlines at bay in Asia. But finally the region's long-suffering travelers are able to join in. Five years ago, Asia had only one low-cost airline; today there are 13 either already in the air or due to launch later this year. The boom is lowering airfares across the region, increasing competition for major airlines and making air travel accessible to tens of millions who otherwise could never have afforded to fly.

Fernandes, 40, a fast-talking Malaysian, has become the poster child for the new movement. A 12-year veteran of Warner Music in Asia, Fernandes sold his pricey AOL Time Warner stock options and in 2001 bought into a sleepy two-plane airline in Kuala Lumpur. He now has 22 planes and is seeking to buy 80 more over the next eight years. AirAsia has gone from 12 flights a day to 100, including runs from Kuala Lumpur to Jakarta, from Bangkok to the gambling mecca of Macau and even flights to Bali. He's also eyeing China and India. Boasts Fernandes: "We have transformed the way people think about flying."

He's not exaggerating. The cheap fares are luring Asians away from rickety buses, inefficient trains and traffic-choked highways. Laykha Boonlerd, 26, a bank employee in Kuala Lumpur, could never before afford to fly to Bangkok to see her family and instead made an excruciating 24-hour pilgrimage by bus and train. But with a one-way ticket on AirAsia costing only $26, she took wing in July for the first time. "I will travel much more with AirAsia," she says. Indeed, about half the travelers on Asia's budget airlines are first-time flyers like Boonlerd.

The no-frills carriers have also been helped by the changing attitudes of Asian governments. Instead of defending national-flag carriers, officials are clued in to the possibility that budget airlines can invigorate underused airports and attract much needed tourist dollars. Singapore is building a new terminal as a hub for budget carriers, and other countries have been wooing no-frills airlines by reducing airport fees. In Kota Kinabalu, AirAsia took over a mothballed terminal, which now buzzes with eight flights a day. Fernandes wants to turn the building into a regional hub. "The loyalty to national carriers is getting more and more compromised," he says. "There's no more cozy cartel where they can do what they want."