Rumours had been flying of leadership changes that would take place in the Air Asia Expedia joint venture after Expedia increased its stake to 75% this February, and this week the changes happened.
A global reorganisation was announced this week to staff in Asia, along with news that CEO Kathleen Tan who came to the JV from AirAsia is leaving. Two senior positions in Asia are understood to have been made redundant in the restructure which calls for a centralising of reporting functions.
Tan, who said she was responding to numerous messages asking about the rumour that she was leaving, posted on Facebook tonight, “It is a fact and a decision I boldly made recently.
“After working for so many years helping companies to grow businesses, I feel the time is right for me to focus on my personal priorities. I want to chill, smell the roses, travel for leisure and not for work and fulfill my long time dream of writing a book.”
She said she was leaving Expedia on a “super high note with triple digit growth, a visible yellow brand and handing the baton to my global colleagues who will hopefully take Asia to another level.”
Her last business day will be this Thursday.
Tan brought her nine years of experience and commercial prowess building up the AirAsia brand to AirAsia Expedia. She cut losses, grew revenues, made the business profitable, strengthened the team across the region and boosted the brand and social media profile of Expedia.
She championed Asia and fought for more resources and commitment to the Asia business from Expedia global. She argued for more relevant hotel content as well as product for Asian travellers and lobbied for more resources to build up hotel supply in the region. Global management meetings were held in Asia as a result and more senior executives came to visit and learn about the region.
Kathleen Tan brought her AirAsia style of leadership and knowledge of Asia to the joint venture
Her local knowledge and networks combined with Expedia’s global scale and technology was seen as a good combination that would allow Expedia to compete and scale in the region, something that had eluded the American travel powerhouse. And it was a combination that was respected by its competitors.
But it was always seen as a “odd couple” pairing – Tan’s feisty, scrappy AirAsia style of leadership and management against Expedia’s data-driven, tech-oriented corporate culture – and many wondered whether the joint venture would succeed with such contrasting styles.
Expedia increasing its investment to 75% by buying 25% stake from AirAsia for $86.3 million was the first sign that change was underway, and that Expedia would take more control of the business. AirAsia’s chairman, Tony Fernandes, certainly did well out of the deal, and has Tan to thank for boosting the value of his stake.
The current changes will see Asia retail report to Gary Morrison, SVP & Head of Retail, Worldwide, based in London.
This change comes on top of Expedia’s recent decision to sell its stake in eLong to Ctrip and other investors. Questions have been asked as to whether Expedia gave up on China too soon. China, everyone knows, is a longterm game and you got to go into it with eyes – and wallet – open, and one wonders if there were lessons Expedia has learnt from that market that it will apply to the rest of Asia.
Asia too is a longterm game. In its bid to enter the market, Expedia took a bet on a 50% joint venture with the region’s leading low cost airline – something it’s never done before – and that experiment appears to have worked in planting the Expedia name in the region.
Now that it has more control and undertaken this global reorganisation, it will be interesting to see what lies ahead for the company in Asia. With the departure of Tan, it loses a fighter and a local touch. How it will continue to localise its product and execution and build and nurture great teams across the region will be something everyone, especially its competitors, will be watching closely. Because one thing is for sure in Asia – scale is not enough to succeed, you need local, deep knowledge and great, local teams.
