Singaporean businesswoman, Chong Phit Lian, has been around industry all her working life. An engineering graduate, she’s walked the cut and thrust of factory floors, steadied ailing businesses and spearheaded innovation.

Her appointment in March 2006 as CEO of Jetstar Asia Airways might have seemed somewhat of a glamour role in comparison. But this was a business in trouble. Jetstar Asia was already losing money, and worse was to come, with global problems bearing down. 

Within a few short years, though, Jetstar Asia was not only back in the black, but being hailed as one of the rising stars of aviation business worldwide. What went on inbetween?

Chong – a driven executive whose schedule most people would be hard pushed to keep up with – reflects on those early years.

“When I first joined Jetstar back in 2006, the company was losing money and was not operating to the highest levels of operational efficiencies. I had to make some tough decisions to cut back on certain routes and to reduce our fleet to quickly stem losses.”

Those first cuts went deep, but with fuel prices surging, the business was further challenged. By 2007, an even leaner operation was imperative. “We were pushed to streamline our operations even more, and to optimise the use of existing resources to try and increase passenger loads and ticket sales,” recalls Chong.

Jetstar was not alone – fuel prices were, and remain, a global issue – and the financial crisis was just around the corner, bringing the aviation industry to its knees. In an interview in 2008, Chong, always the pragmatist, correctly predicted that “more airlines will go bust if fuel prices continue to rise”.

She worried too that pending Open Skies agreements across the Association of Southeast Asian Nations (ASEAN) region – its membership is made up of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam – could see the market saturated, with “everyone setting up airlines and flying the same routes and hurting each other for a while”. 

With low-cost carriers (like Jetstar), one of the few bright spots on the horizon, there would be even more competition from full-service airlines launching budget offerings, Chong reasoned. And so, with characteristic decisiveness, she took charge.

“My first decision was to remove two aircraft from our operation and cease flying to Bangalore and Kolkata. We also increased the flying hours of our existing fleet,” Chong remembers. 

“Internally, we restructured roles and we outsourced certain functionalities that made more financial sense for an organisation of our size. This all helped us as an organisation to focus more on our core customer offering, and be more disciplined in terms of our costs.

“With a low cost base and a reinvigorated focus on our core business, we were more nimble and able to steer ourselves through various environmental challenges, and look for opportunities at the same time.”

By March 2008, Jetstar Asia and its sister company, Valuair, saw a 20% increase in revenue with a corresponding increase of 20% in passengers carried. “It was also the first year we were in the black since I joined the company,” says Chong. 

This was an outstanding turnaround, amid all the turmoil of that time. What did it feel like, being able to announce profits, when so many other airlines were still struggling?

“It provided a great sense of satisfaction for me and my team, given all the hard work we put in and the significant re-engineering of our business that we had implemented,” she enthuses. “It also reinforced to us that our strategic approach was the right one.

“A low cost base makes an aviation business like ours able to more nimbly manoeuvre through external environmental challenges. During that period, what we saw were airlines with high-cost bases not able to react as quickly.”

Asked to identify the key strategies that worked most effectively, Chong puts a stringent cost focus as the number one priority. 

“When I entered the business I was focused on lowering our cost base and re-engineering our route and fleet structure to focus on more profitable routes and opportunities. Creating a more efficient route network and increasing our asset utilisation was critical,” she said. 

As a result, Jetstar Asia has managed to reduce its cost per available seat kilometres (ASK) by at least 5% yearly since 2008/9.

And now, in 2011, many airline businesses are still struggling to recover. Even Qantas, Australia’s national carrier and Jetstar’s own parent, has had to restructure or perish, as its CEO Alan Joyce announced in August. 

At the same time, the profitable Jetstar Asia signalled further pan-Asian growth, announcing a 50% expansion of its Singapore hub. This investment will add five more A320s and two more A330s to the fleet, which has already allowed for an extra 40 weekly flights since July. 

It will include services to new destinations including Beijing, Ningbo and Hanoi, as well as additional flights to Taipei, Hong Kong, Kuala Lumpur, Ho Chi Minh City and Jakarta. 

Chong believes the brand’s success in Asia is built on a number of factors. “Firstly, I believe the Jetstar Asia core offering of – ‘all day, every day, low fares’ – is very consistent across all our markets which means that as a brand we are able to tap into an existing customer base as we grow and expand across the region,” she muses.

“We support our low fares with a ‘price beat guarantee’, which applies to each and every Jetstar route whether customers are travelling with Jetstar Asia from Singapore, or with Jetstar Pacific in Vietnam, or travelling from Christchurch to Auckland with Jetstar in New Zealand. This is a powerful message.

“While we have some very consistent brand messaging across our markets, we also focus our marketing efforts locally. For example, in Singapore, our brand ambassador is the hugely popular TV and movie star Joanne Peh. She embodies our fun, modern and fresh brand in Singapore. In Japan, Jetstar’s ambassador is Japan’s most high-profile female celebrity, Becky, who again embodies the Jetstar spirit in Japan.

“Also key to our success has been consistent, year-on-year, sustainable growth. Jetstar Airways in Australia has grown every year since start-up by at least 20%. Jetstar Asia over the last two years has grown capacity by nearly 50%. This means we are constantly growing our customer base and our market reach.”

Last year, Jetstar carried 20 million passengers, making it the fastest growing airline in just seven years of flying. It has grown from 400 employees at start-up to more than 7,000 today. 

Chong credits the Asia-Pacific market as being integral to the growth and future of the Jetstar brand.

“The Asia-Pacific market shows great potential for LCC growth, with Asia already the world’s largest aviation market. In terms of LCCs, the opportunities are immense, with many markets within the Asia-Pacific region still with low levels of LCC penetration. 

“For example, Jetstar at the moment is focusing on China as a key part of our Pan-Asian strategy. In China, LCC penetration is currently only around 3%. In Japan, where we have just announced we will establish a domestic LCC next year, LCC penetration is less than 5%, again highlighting what opportunities exist in this region.

“Based on revenue, the Jetstar Group is currently the largest low-cost airline in the Asia-Pacific, with operations in Australia, New Zealand, Singapore, Vietnam and, in 2012, Japan. We currently fly to 56 destinations in 17 countries and territories.

“With an established brand like Jetstar, proven sustainable growth and planned fleet expansion, we are in an excellent position to continue the roll-out of our brand footprint in the Asia-Pacific.”

She is, however, quick to point out that although the Asia-Pacific region may be a potentially lucrative market, just being there is no guarantee of success.

“It’s a highly competitive market, and consumers are becoming increasingly savvy about their travel choices,” notes Chong. “In the circumstances then, growth of brand presence and constant product innovation are vital to being able to continue to appeal to customers.

“New routes, new networks, new frequencies all contribute to brand and traffic growth – both by tapping into new markets and by getting regular travellers to fly more frequently to more places.

“It is also vital to focus on product innovation and adapt to the changing needs of the consumer, quickly and efficiently. In terms of payment and distribution, by way of example, in Singapore we have introduced new payment options via 7-Eleven or at post offices for those wishing to buy direct.”

Jetstar Asia is not bound by traditional LCC models. It forms interline partnerships (20 at the last count), allowing marketing to potential customers where the airline doesn’t have a direct presence. 

Innovation such as the successful pay-on-board for services model, a continuous review of the passenger food and drink options and a range of support products like travel insurance and holidays add to the successful mix. 

As for route development, China is firmly in Jetstar Asia’s sights, as the airline’s recent rapid growth in the mainland market demonstrates. “China still has very low levels of LCC penetration and is also experiencing tremendous growth from the powerful middle class,” enthuses Chong.

So what next for Jetstar Asia? “My short-term goal is to extend our low fares offering to more destinations and, more long-term, the aim is to build strong values for the organisation and be an employer of choice,” says Chong.

“My personal goals are to stay healthy, be happy, maintain family values, and contribute to the community spirit to help those I have benefited from.”

Sounds like good advice for everyone.