There’s a Chinese saying, ‘A good rest will enable you to take on a longer journey’. Today, Kathleen Tan returns to AirAsia as CEO North Asia, saying, “I feel fully rested, physically and mentally ready, for this next journey.” In this interview with Yeoh Siew Hoon, she talks about her new role, her one-year’s break and why North Asia is the most exciting travel market currently.
Today, on June 13, exactly a year after she left AirAsia Expedia as CEO, Kathleen Tan returns to work, this time as CEO North Asia for AirAsia.
“I wanted to make it exactly one year, it’s sweet and memorable for me,” said Tan who took a year’s leave, following her departure from the AirAsia Expedia joint venture company she headed for 30 months.
During her one-year break, Tan travelled extensively to Japan and other countries in North Asia which now come under her watch.
Her new role will see her based in Hong Kong and leading AirAsia’s corporate and business development strategy for North Asia, a region close to Tan’s heart.
In her early years with AirAsia, she was instrumental in bullding up the group’s network and profile in China, with her strong social media following, and she helped build up Expedia’s businesses in markets such as Japan, Hong Kong, Taiwan and South Korea.
It’s a hyper-competitive market out there
She will have her work cut out for her. North Asia is one region where AirAsia does not have the dominance it has in South-east Asia, its home market, and it’s getting to be a hyper-competitive market with lots of low cost airlines competing for future growth in Asia’s most dynamic region.
Low cost accounts for under 10% of total seat capacity in North Asia compared with almost 60% in South-east Asia, clear evidence that to win in the overall Asian low cost airline sector, you have to win in North Asia.
In South Korea alone, a market of 50 million people, there are five low cost airlines and two full service carriers. In Japan, AirAsia failed with its first market entry following a break-up with All Nippon Airways which subsequently went on to launch Vanilla Air. It will relaunch AirAsia Japan this October with investors such as Rakuten as backers.
It faces competitors such as Peach (also owned by ANA), which flew 4.54 million passengers in FY2015 and is showing strong revenue growth and profit. More than 70% of Peach’s customers are from outside Japan, showing the airline has managed to build a brand following outside its home market. Customers aged 20-30 form 56% of Peach’s customers and 52% are female.
You could argue this customer segment is right up Tan’s alley – she built up a strong Millennial and female following in her time at AirAsia and has always preached that you have to look towards the next generation to see how travel will and should change.
But clearly China is the main prize and in that sector, Spring Airlines is a formidable competitor, as is the HNA Group which is building up its own UFLY alliance of low cost carriers – HK Express (based in Hong Kong), Lucky Air (Kunming), Urumqi Air (Urumqi) and West Air (Chongqing).
Getting behind Tony Fernandes “who believes in me 100%”
Asked if she is ready for the challenges ahead, after a year’s hiatus, Tan laughed, “I will know when I land at the LCCT (AirAsia’s terminal in Kuala Lumpur) today. Anyway, I have no choice, I have already made the commitment. My line has been busy the last couple of weeks since people in AirAsia heard I was coming back.
“I will just have to crank up my pace, it’s all about adaptability.”
Tan dipping into the Fountain of Youth in Iceland: “It’s all about adaptability.”
Tan is also returning to AirAsia when the group, now nearly 15 years old, is undergoing challenging times. Chairman Tony Fernandes, in an interview in March, admitted he had taken his eye off the ball. “I was getting a bit tired (of running the airline) so I backed off, watched football and did all those other things. I was on my way to retirement,” he said.
Clearly he’s now back in the captain’s seat and recalling his most trusted team members to work alongside him to rebuild the airline’s position.
On why she decided to return to work, Tan said, “I thought about it very hard. I wanted to extend by another year. It was nice to chill and rest. But when I see what’s going on in AirAsia, and travel is still very exciting, I think there is still room for me to contribute.
“And I also thought if I were to return to the corporate world, I’d rather follow someone who believes in me 100%, trusts me and knows what I am capable of.”
New ability to look at AirAsia “in a different light”
She says she returns a much stronger and better-rounded leader. “Working in aviation and pioneering the low cost sector in Asia for 10 years, followed by two years of working for a global travel tech company, learning from the smartest brains and how ecommerce is powered, I can return to AirAsia and look at it in a different light,” said Tan who, when she was with AirAsia, led the formation of the joint venture with Expedia and thus got a good grounding in the travel distribution business and fought hard for Asia to be recognised within the global company.
She is excited about North Asia. “Most people only think of China and India when they think of Asia but there’s Korea, Taiwan, Japan – and I am coming in at the right time. It’s all about timing.
“In South Korea, a lot of local brands are going global, their entertainment is huge in China. Japan is opening up. Low cost is still very powerful in bringing down walls. I was in Ginza a few weeks ago and there were Thais and Chinese everywhere. Look at what low cost did for South-east Asia – for places like Bandung, Lombok, Bali – and we are only at 10% capacity in North Asia.
Tan in Zhangziajie: “I encourage all senior leaders to take a break.”
“I was in Changsha recently and visited one of China’s top three attractions, Zhangjiajie (made famous by the movie, Avatar). There were so many Malaysians there.”
Her new role will go beyond commercial. “AirAsia operates a lot of flights within North Asia but there is no face to them. We have leaders in AirAsia, all busy running their respective markets. They need someone who understands the region. I can help with the route network, I will be the bridge between AirAsia and the region, dealing with regulators, to deliver growth for the group,” said Tan.
That growth could include new airlines, she said. “In some ways, I feel my journey with China was not completed when I left AirAsia. We were in China before Spring Airlines so an AirAsia China could be a mission.”
That one-year hiatus has also convinced her that taking a break is absolutely essential for all executives. “I encourage all senior leaders to take a break, reflect on your life and see things from another angle.”
In the year off, she travelled to places from Iceland to Changsha and saw travel from a consumer’s perspective. “Now you ask me, would I do things differently? Yes, certainly.”
Follow your heart, yes but also follow leaders
On the wisdom of following leaders in your career, she said, “It’s good to work for someone smart. They stretch you to the max. I’d rather work for someone who knows me and who will let me soar. I am still learning and that belief is very important. In global corporations, you are only a statistic. Working for an Asian entrepreneur is very different, there’s that human touch, the relationship.”
She also returns knowing full well this goes beyond doing a job. “I am passionate about Asia and Asians. I want to continue my journey as a coach and senior leader and bring more Asians across. I am creating a team, bringing experienced Malaysians, Chinese, Taiwanese across Asia. For Asians to really grow, we need to understand each other’s cultures. My aim is to create a diverse team of Asian talent.
“And hopefully as a woman, especially in North Asia, with the exception of China, wehere women are still not in the higher echelons of management, my visibility will encourage women to step up and influence the development of women leaders in the region.
“There’s a Chinese saying, ‘A good rest will enable you to take on a longer journey’. I feel fully rested, physically and mentally ready, for this next journey.”