Wednesday, August 12, 2009

Blazing a trail for AirAsia in China

12 August 2009

Kathleen Tan almost quit after three weeks on the job but she persevered

'TONY, I don't think I'm cut out for the low-cost carrier business. Am going home,' Kathleen Tan told her boss by SMS just three weeks after arriving here.

Dynamic duo: Ms Tan joined AirAsia 'because of Tony (Fernandes)' and has since helped the airline to grow into an Asean, and possibly global, carrier

Tony is Tony Fernandes - her recruiter and former counterpart at Warner Music, and the man who asked her whether she would like to work with him while bopping to a Linkin Park concert in Kuala Lumpur in 2005.

Seldom around after she arrived to work with AirAsia - immersed as he was in an impending public share sale of his new budget carrier - he immediately responded: 'Don't leave, you can do the job,' adding as an after-thought: 'Go to China and see if you can cut a deal with the airports.'

Energised by the challenge and determined not to throw in the towel when all her friends were expecting her to fly high at the new airline, Ms Tan spent three weeks researching China and the budget airline business on the Internet and buying all the books she could.

But little prepared her for the reception. 'My first visit to China was so horrible I could write a book,' she said. In halting Mandarin she did her best to introduce the unknown carrier to a room of 15 chain-smoking executives at Kunming airport, who were bent on holding their own side conversations. 'I never felt so short on confidence in my life,' she told BT in an interview.

The former divisional head of marketing at FJ Benjamin, Singapore, Warner Music regional marketing director for Asia-Pacific and later Singapore managing director knew she had to up the ante.

Leveraging on her marketing, networking and negotiation skills - as well as 'super-rhino skin' - she landed AirAsia's first Chinese destination on her third approach, Xiamen airport, convincing the airport chairman in just one meeting that a Bangkok-Xiamen route would be profitable for the airport.

Now that AirAsia has 160 flights a week to China - and Chinese and global airports knocking on its door - Ms Tan can laugh at those days spent with airport executives and the Chinese mai tais - 'My record is 22' - to clinch a deal.

Now considered the face of AirAsia in China, she recalls with considerable satisfaction how she - with a bit of help from Macau station manager Cecilia - blazed a trail in a difficult market that some multinationals with far bigger teams have taken years to penetrate.

'You have to strategise, know what they want. I told them about the low-cost carrier business and what we could do for them,' she said.

Being a huaqiao (overseas Chinese) helped culturally, but she was also prepared to invest time and energy to get to know the Chinese better and build the guanxi (relations) that would propel her to other deals.

She had known her calling from young, but it was only after she successfully launched Guess on an annual budget of $75,000 - 'peanuts even in those days' - that her love of branding and confidence took off.

Now in her 40s, she says 'marketing is about creating a latent demand - just as AirAsia has done with low fares'.

Because he had worked with her, the super salesman that is Mr Fernandes recognised similar attributes in her. Upon acquiring the airline, he phoned her. 'Kat, guess what? I just bought an airline. (Long pause) Kat, Kat, are you there?'

'I was stunned because music is his life and we had always thought he would start a new label,' she said, but in jest remarked: 'Don't forget if you ever have something good.'

She followed the airline's path over the next 18 months, during which she also saw that the writing was on the wall for the music business as it was shrinking because of the Internet and new distribution channels.

Ultimately, she joined AirAsia 'because of Tony'. 'I think he won me over because he works very, very hard,' she said. 'But it's an equal relationship, otherwise I wouldn't work with him.'

Still, the adrenaline junkie confesses that going from full expat benefits to zero frills was such a culture shock she almost threw in the towel on numerous occasions.

Despite having to deal with difficult clients in her advertising days, and later egoistical pop stars and music pirates during her Warner stint, she could count on the perks.

The 'good life' - a BMW cabriolet, golf membership, personal assistant, business class travel and everything that comes with being a managing director for a multinational company - ceased overnight. AirAsia was not beyond expecting one of its top executives to take the public bus from Macau to Guangzhou.

'I'd never had to take a public bus since I was 13. You live and breathe cost management every day,' she said, recalling that her 'I quit' SMS was made after her high heels broke for the umpteenth time during a daily 20-minute walk across a burning tarmac to the tiny room - 'more like an engineering room' - that then served as AirAsia's office.

A graduate of the school of hard knocks, Ms Tan recently celebrated her fifth year with the airline - five exciting but challenging years, with the Bali bombing, regional haze and oil price shocks thrown in for good measure.

External challenges aside, she observed: 'Working here is like working on a Grand Prix track' - an experience the carrier's 6,000-plus staff would attest to.

From a two-aircraft start-up in 2001, AirAsia has become South-east Asia's largest low-cost carrier, and with its long-haul unit, AirAsia X, flies 130 routes to more than 65 destinations and counting.

It now owns 74 aircraft and last year carried almost 19 million passengers. The sub-economy it has created has earned it a strong following.

Despite her official title of AirAsia group regional head of commercial, Ms Tan's responsibilities include revenue management, strategy and route planning, marketing, sales and distribution, e-commerce, goHoliday and communications.

As an Asian, the self-described 'independent spirit and not your typical Singaporean' derives great satisfaction from seeing the 'little (Malaysian) airline' grow into an Asean, and possibly global, carrier. Is it too much, too fast?

Rapid decision-making is a must. And so are guts, she said, echoing Mr Fernandes' view that a slowdown is the best time to carve out a larger slice. Already, the airline has registered a database of two million customers, almost half from Malaysia.

Ms Tan seldom needs to do 15-hour days now, and every Friday hops on an AirAsia flight to Singapore where she 'chills' before returning on Monday morning. In time to come, with technology and a succession plan in place, she sees herself back in Singapore, perhaps heading the company's operations there.

Even then, the constant marketer will be hatching new plans to keep the brand fresh and the airline relevant.

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