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Fast 50 2008: Air Asia

What can you buy with a quarter? Maybe a few drops of gas or a Jolly Rancher—unless you're a former music exec named Tony Fernandes. Seven years ago, Fernandes paid 25 cents for a near-defunct carrier with two creaky planes and $12 million in debt. Today, AirAsia is one of the world's fastest-growing, most profitable carriers, making its name—and money—by defying industry convention and democratizing air travel.

AirAsia is innovative down to its corporate bones. Most passengers think of it as one carrier, but it's actually a co-branded collection of several, a unique structure Fernandes devised to allow AirAsia to set up hubs in three countries (Malaysia, Thailand, and Indonesia). It built its brand in part by being surprisingly cheeky; when AirAsia began flying from Singapore to Bangkok in 2004, Fernandes ran full-page newspaper ads taunting Singapore Airlines' famed Singapore Girl flight attendants: "There's a new girl in town: twice the fun, half the price."

But mostly it's been known for its frugality. AirAsia's operating costs are the lowest of any airline in the world, and so are its fares. One-way specials for as little as $3 have opened the skies to new travelers. Says Yap Choo Ying, who runs a market stall in eastern Malaysia and now regularly jets to Kuala Lumpur to see her grandkids: "It's like our bus."

Now that bus is going farther than ever. In November, AirAsia did what no low-cost, short-haul carrier has dared to do—not Ryanair, not Southwest, not easyJet: it went long-haul, adding flights to Australia. Industry analysts have repeatedly questioned the viability of that venture, but AirAsia says that business will break even before the end of '08. This year, it will also expand in China and India, two markets experiencing booming growth in air travel—and massive numbers of people who have yet to take to the skies.