Kathleen Tan

Tan replaces Dan Lynn, who was moved in from Expedia to head up the joint venture when it was signed on March 29, 2011 and heralded a game-changer at the time. Her appointment signals yet another shot in the battle of the OTA space that will heat up in Asia in 2013.

Talk that a top-level change was imminent at the joint venture had been doing the rounds for the last couple of months amid speculation that both AirAsia and Expedia were considering the next steps on how to push the business along amid the increasingly intense competition in the OTA space in the region.

While Lynn’s forte has been in “getting stuff” done – something he professed a passion for in talks at a Web In Travel event – it is clear the two brands now want to take the joint venture to a level where it can compete with global competitor, Priceline Group, and regional brands such as MakeMyTrip (which bought Hoteltravel.com), Webjet (which bought ZUJI) and Wotif which has also brought in new ammunition in the form of new CEO Scott Blume.

Under Lynn’s watch, the joint venture has launched sites in various markets including Singapore, the Philippines and Thailand. He also saw the launch of Backick, touted as the world’s first hotel booking site where friends help pay for each other’s travel. The team also moved into brand new offices in Singapore, distinguished by its bright yellow Expedia colours.

The move to put AirAsia’s marketing powerhouse Kathleen Tan at the helm of AirAsia Expedia shows serious intent by the two companies to put more muscle and weight behind the joint venture and perhaps a recognition that you need someone with deep Asian experience to execute such a challenging enterprise – this at a time when the AirAsia Group itself is rapidly expanding and Tan was instrumental in building up the airline’s brand and sales as commercial head.

Effective immediately, Tan will oversee the Expedia brand, AirAsiaGo, and Backick online travel agency (OTA) businesses in South-east Asia, India, Japan, Korea, Taiwan, and Hong Kong.

In a press statement, Dara Khosrowshahi, Expedia group president and chief executive officer said, “We are thrilled to have a business leader of Kathleen’s caliber join the AirAsia Expedia joint venture. She has an impressive track record in building AirAsia into Asia’s biggest low-cost carrier over the past eight years, and we are delighted to have those skills brought to the AirAsia Expedia joint venture. Furthermore, her substantial knowledge of Asia’s travel landscape and proven business acumen will be immensely valuable in taking AAE to future heights.”

Tan Sri Tony Fernandes, AirAsia Group Chief Executive Officer said, “Kathleen came to Malaysia not knowing anything about aviation, but her determination has led her to overcome every challenge and today she holds the pulse of Asia’s travel market. As AirAsia progress towards the second decade of success, we feel comfortable in letting Kathleen move to AirAsia Expedia.

“Our focus for the next five years is ancillary and adjacent business. The potential of AirAsia Expedia is enormous. Having Kathleen driving the business gives me huge encouragement and I am sure AAE and the OTA industry will escalate tremendously when Kathleen gets to work her unique style of brand-building, sales and profits growth” he added.

It is no surprise that Tan has been picked to head up the joint venture at this stage – she was the executive from AirAsia most involved in the signing of the joint venture and, as such, can be seen as having the most personal stake in ensuring its success. It was she who first raised the idea of working with Expedia to her boss Tony Fernandes when he asked her to run AirAsiaGo.

At the time of the signing (see article), she said the joint venture was thus a fantasy come true and jested to Lynn at the event, “In a Chinese marriage, the woman rules. Have you heard, your money is my money, my money is my money?”

Calling it “a first of its kind global partnership between an OTA and a low cost carrier” during the media conference, Tan predicted then it would be a good marriage because of the synergies between the two – namely, AirAsia’s network and expertise in a region being eyed by Expedia, and Expedia’s global clout in markets where AirAsia needs distribution.

However it was clear from the outset that managing the cultural fit between two such different and strong brands would be a challenge and it’ll be interesting if Tan manages to bridge the gap between East and West effectively and profitably.

Tan has shown herself adept and capable of adapting. She had no knowledge of the airline business when she moved to AirAsia from Warner. She has some knowledge of the OTA industry, having managed the AirAsiaGo OTA business profitably prior to it being transferred to the AAE joint venture upon formation.

During the past eight years, Tan has grown AirAsia’s revenue twenty-fold to over RM10 billion (US$ 3.5 billion) in 2012.  Kathleen has scaled up AirAsia’s network from less than 20 planes to nearly 130 planes, creating the #1 low-cost carrier in Asia-Pacific, the biggest airline network in Southeast Asia, and the top foreign LCC into China.

Named “Marketer of the Year” by Web In Travel in 2012, Tan has transformed AirAsia’s brand into one exemplified by its signature cool, bold red and recognized and admired worldwide. The brand has won numerous accolades, culminating in being named “World’s Best Low Cost Carrier” an unprecedented four years running by 19 million travelers voting on Skytrax, and the brand equity is now valued at an impressive US$428 million by Brand Finance Plc.

Social media can also be expected to figure more strongly in Tan’s leadership of AirAsia Expedia, AirAsia’s social media presence is ranked #1 in Asia-Pacific by multiple metrics. She herself has over 200,000 fans on Sina Weibo and is ranked in the top 2000 most influential social media users among around 300 million Weibo users.  Her individual Weibo account would rank as #4 among airlines in China.

Now, can she translate that success to the OTA world where search rules over social?

On her part, Tan said, “The last eight years in AirAsia have been the most awesome ride I ever had in my career.  I thank Tony, Kamarudin and the AirAsia Board, who always have had the greatest faith in me and have given me the opportunity to fly high in the world of AirAsia. And a big thank you to my wonderful commercial staff and Allstars in AirAsia who embraced and inspired me every day. I am truly delighted to take on a new challenge in the OTA industry which is a natural progression, as travel still excites me greatly.  Indeed, it’s a big honour to work for two of the world’s most powerful brands and I’m excited by my new appointment. I look forward to taking AAE to another level and build further growth.”

“Asian consumers can look forward to the widest range of travel products at great prices with AirAsia Expedia,” she added.