Azran Osman-Rani speaking at Web in Travel Conference 2008

Is AirAsiaX looking to improve its relationships with hotels?

AOR: With a lot of these business relationships, we work with the AirAsia group operationally and from a marketing point of view. With respect to Air Asia's relationship with hotels, frankly I think we're barely scratching the surface. We dabbled a little bit through Air Asia's arm, called Go Holiday, which attempted to aggregate hotel rooms and bundle that with our airfares on the Go Holiday website.

A new person has been appointed to relook at that. I think it’s time we unearthed everything and questioned all of our existing assumptions. That approach was too small, you need scale. And we’re looking at models where we collaborate more with the likes of Expedia or equivalent organisations. Hotels and hotel inventories are a game on their own, and I’m not sure we’re the best experts. So it’s definitely something we're keen to talk about.

In the beginning it must have made an impact when you first walked into meetings, a young guy in a cap as the CEO of an airline. Was it fun to be the new kid in town?

AOR: In a sense, although you can always feel the virtual daggers behind your back. From regulators, to national carriers, to some of the more established airports. But that was part of why I jumped into the scene – taking on something and pushing the envelope.

Put us in the picture – where were you previously and how old were you when you took the role?

AOR: I came from television, Astro, the digital media company in Malaysia. I was bought in mid-2007 at aged 36. When Tony (Fernandes) bought me in, he said, we’ve got enough people in the airline business and for this model to really work, we have to question everything. He wanted someone with an inquisitive mind, thick skin, and natural ability to bring people in and rally around the common cause. Where I thought airline experience was critical, I brought in people (such as my director of operations from Malaysia Airlines); he started in the airline business the year I was born.

Because you needed someone robust, to make sure your engineering is robust and meets all the regulator requirements. But branding, marketing, the whole corporate approach, we bought in people from everywhere else. We didn’t want to just be another airline.

You talk about wanting to make an impact, the Manchester United team uniform sponsorship deal was a good example. When it started, people must have said what’s this Malaysian carrier sponsoring a British team for? Tell us about that.

AOR: Part of it was, you’re trying to break out of the image of just being a South-east Asian company. Brand association is key and, if you want to be successful, you’ve got to envision yourself with success and associate with success. But here's an interesting statistic, as a result of that sponsorship. Back in 2007, there was a brand awareness survey in London on airline brand awareness.

Oasis from Hong Kong had been operating for 12 months with no problems. And their brand awareness after flying 12 months Hong Kong-London was 19%, while ours was almost 50%. And we’re only going to start our London service early next year. In longhaul, you have to think global, and you’ve got to have an investment early on. investing in that brand development far ahead of your actual products. We’re probably announcing our UK service as open for sale from next month, and I would expect a lot of people to have already heard of us. So you’re already working towards a full flight.

You talk about expanding on new routes. Has the financial crisis hampered you, or is it almost a bonus for your business model?

AOR: I think it is a bonus because where other airlines have pulled out or cut back, the airports have become very nervous. They have come to seek us, and said we want to have this continued service. They’ve become more creative in roping in the government and the overall industry around that city, to say let’s create a fund and use it to co-promote a new service with AirAsia X. When airports do this, it really sets them apart. Gold Coast is a good example of that.

What have you changed about your strategy after the credit crunch uncertainty?

AOR: The real issue is on the corporate side in terms of how we deal with banks, and to ensure that we continue to get financing. Frankly that’s one thing that probably keeps me up at night. I’m not really worried about oil prices, which affect everyone the same. But credit could really hurt my growth.

Other than that, the best thing we can do is stick to what we know best – keep making our operations leaner, keep investing in marketing, promoting and growing, while everyone else is cutting back. I’ve nowhere to retreat from. If it means I have to keep offering lower fares, it’s like Walmart, we might keep the margins razor thin. But if you get people flying, it grows from there. It’s exactly how AirAsia got themselves out of September 11, SARS, the tsunami, coups and bombings.

By 2012, how many planes will you have?

AOR: For AirAsia X, we’ve placed an order for 25 aircraft and will have 21 of those by then. We’ll be in at least four Australian cities, at least four Chinese cities, two in Japan, at least one or two Korean cities, three in India and two in the Middle East. First is getting reach, the next part is getting frequency.

That’s when you can really get customers. And 2013 is I think when ASEAN Open Skies will truly kick in, so we’ll be able to fly Manila-Hanoi, for instance.

And you’ll have just turned 40. From two to 21 aircraft by then.

AOR: Yes, then I’ll be able to retire!

How big is your potential market of people who’ve not yet had a flight?

AOR: South-east Asia alone is 500 million people, and the number who’ve flown internationally is 12 times less than in developed Asia or Europe. So I think we’re just barely scratching the surface.

Source: www.4hoteliers.com