When Anthony Francis Fernandes was a boy in Kuala Lumpur, he told his dad, a doctor, that he wanted to own an airline when he grew up. “He said, ‘If you get past Hilton doorman, I’ll be pleased,’  ” Fernandes recalls. After graduating from the London School of Economics, Fernandes sprinted up the ladder at Warner Music Group in London, eventually returning to his homeland to head the company’s Malaysian division. But he grew disgruntled with the unrelenting emphasis on short-term earnings, cashed out his stock options, and quit.

One evening, as he moped in London, pondering his next move, Fernandes saw a TV documentary about European budget carrier EasyJet. It triggered memories of his childhood fantasy, and the next day, he headed to the carrier’s base at London Luton Airport, where he realized that Asia had nothing like EasyJet. “I thought, Everyone’s been stealing my music,” he says. “I can steal an airline concept.”

Neither he nor the music-industry buddies he recruited to work with him knew anything about the business. “We were scanning the internet to find out how many seats a 737 had,” Fernandes says. Expertise arrived in the form of Conor McCarthy, an ex-Ryanair executive Fernandes persuaded to sign on as a founding director. He brought with him knowledge of the Irish carrier’s model.

Fernandes also managed to earn former Malaysian prime minister Mahathir Mohamad’s blessing—which means everything in a nation governed almost as a fiefdom—but Mahathir instructed Fernandes to buy an existing carrier. He agreed to purchase a two-plane, three-destination, money-bleeding airline called AirAsia. The price: 1 ringgit (then about 25 cents) and the assumption of $11 million in debt. The deal was struck on September 8, 2001.

That may seem like a horrible time to have started an airline, particularly in Asia, which was subsequently pummeled by epidemics of SARS and avian flu, the 2002 bombings in Bali, and the 2004 tsunami. But AirAsia launched as the industry “was hitting the bottom of the cycle,” says Timothy Ross, who researches the Asian transport industry for the investment bank U.B.S. and formerly sat on AirAsia’s board. Aircraft, one of the biggest startup costs for an airline, were cheaper than ever. AirAsia leased more than a dozen Boeing 737s, many of which had been mothballed by U.S. Airways, each for as little as $75,000 a month—40 percent less than what they would go for now. Prices were still low when the airline was ready to order new planes in 2005. Ross estimates that AirAsia bought Airbus A320s for about half their nearly $60 million list price. (Today, AirAsia is one of Airbus’ biggest customers, with orders booked for 125 A320s and 15 A330s.)

The airline’s inaugural fares were as cheap as a bus ride—$3 for a one-way ticket from Kuala Lumpur to the resort island of Langkawi. AirAsia’s average fare has since grown to $48, and its red-and-white planes now fly—typically about 80 percent full—to 48 cities in 10 countries. “It has been the first mover in the region,” says Peter Harbison, executive chairman of the Centre for Asia Pacific Aviation, a consultancy based in Sydney. “And it has been the first mover into what you would call essentially virgin markets.”

AirAsia has made fliers out of people like Supriyadi Amin, a palm-tree farmer from Malaysian Borneo. When I met him in the L.C.C.T., he had just taken the first flight of his life, from Bintulu to Kuala Lumpur, and he was waiting for a connection to Solo, Indonesia, where he would visit family. “It’s very fast,” he said of the experience. The trip to Solo by bus and ferry used to take him four days.

Flying mostly inexperienced passengers has presented challenges Fernandes never foresaw. AirAsia is constantly writing and rewriting rules, many with a distinctly local flavor. Every confirmation email comes with a reminder that “fresh or frozen seafood or other meats are unacceptable as checked baggage.” Durian—a spiky-skinned Asian fruit so pungent that English novelist Anthony Burgess described it as “vanilla custard in a latrine”—is forbidden. There’s a limit to the number of bags a passenger can carry on, but it’s rarely enforced. (Grandmothers can often be seen boarding with several overstuffed plastic bags in each hand.)