URBANE, articulate and statesman-like - adjectives often used by airline industry insiders to describe the 60-year-old chief of what is arguably the most successful airline group in the world. But many in the industry, especially planemakers, would also add 'savvy' and 'tough negotiator' to the list.
And for good reason.
Singapore Airlines CEO Chew Choon Seng has a well-earned reputation for being a man who does his homework very thoroughly, then drives a hard bargain. Just ask European planemaker Airbus, from whom SIA ordered 19 A380s and 20 A350XWBs.
Observers close to the deal will recall how SIA held back from ordering the giant A380 when it was first launched off the plans in 1999, despite enthusiastic response from rivals like Emirates and others.
"We leveraged on SIA's global reputation and influence to persuade a planemaker to redesign a product to suit our needs. And it defined our position as an opinion leader in the business."
- Mr Chew, on getting Airbus to rethink its design of the A350 |
'We wanted specifications of the plane to be more precise,' Mr Chew recalls. 'We insisted that the aircraft meet environmental standards which had not even been legislated but which we knew were coming, including new noise levels like Heathrow's QC2.'
This was despite the fact that, internally, SIA had already identified the plane as the next generation replacement for its fleet of ageing B747-400s.
Still, the airline refused to put in an order for the giant plane until Airbus reached a critical point where it needed new orders to go ahead with the US$11 billion project.
'We knew they needed to sell a few more planes before they could move forward,' Mr Chew recalls. 'So we negotiated to be the first to fly the plane if we placed the requisite orders.'
And in November last year, SIA became the first airline in the world to put the giant plane into service.
Not only did the airline negotiate to be the 'First to Fly', it also negotiated to receive the next four planes, thus making it the sole operator of the A380 for some eight months before rivals like Emirates and others got their planes.
If that episode marks a certain tough-headed shrewdness, Mr Chew's ability to define what the new A350 should be established his position as an opinion leader in the industry.
Airbus started attracting criticism from the moment it announced plans to launch the new A350.
As early as the first quarter of 2006, Steven Udvar-Hazy, the CEO of the world's No 1 plane lessor, International Lease Finance Corp, led a chorus of criticism of Airbus for trying to spin off 'old wine in new bottles' by tweaking the ageing A330 model to create the new A350.
Then Mr Chew weighed in on the issue.
'They should go the whole hog and design a new fuselage instead of using something old,' he said in Zurich in April 2006, where Star Alliance CEOs were meeting for their annual summit.
'They were offering everyone a 15-year-old design,' Mr Chew now recalls.
Two months later, in June 2006, as if to underscore the point, SIA placed an order with Airbus' American rival, Boeing, for 20 B787 Dreamliners - a plane in direct competition with the A350.
Airbus got the message.
It then embarked on a US$10 billion programme to produce an all-new A350XWB.
Mr Chew then led negotiations with Airbus, which resulted in SIA placing an order for 20 of the new Airbus planes - making it the first airline to buy the A350XWBs, thus providing a powerful endorsement which attracted more new orders.
'Don't ask me what we paid for the A350XWB,' says an SIA insider. 'But let me tell you this - I'd have gotten a better deal on my car if I'd taken him along to the showroom!'
Not surprisingly, that episode cemented Mr Chew's reputation within the industry for being one of the business' most influential leaders.
All this is quite an achievement for a man who took over at the helm of the airline during one of the most turbulent periods in its history - a period when the industry was grappling with the impact of Sars, the Iraq war, and the post-9/11 slowdown.
Just weeks after taking over from his predecessor Cheong Choong Kong in June 2003, Mr Chew had the unenviable task of announcing the airline's first-ever net loss of $312 million for the three months ended June 30. Days later, a visibly weary Mr Chew faced the press to announce the biggest job cuts in the flagship carrier's history and the first in 20 years. And during the next six months, he faced a virtual union revolt as the airline sought to adjust remunerations to make it more cost competitive.
But he perservered, and by the end of the financial year, the airline beat analysts' expectations by posting full-year earnings of $849.3 million.
A year later, in May 2005, SIA unveiled record revenues ($12 billion), record earnings ($1.389 billion) and a record dividend payout (40 cents a share, or a yield of 3.4 per cent).
Looking back, the father of two boys - both grown men now - who relaxes by reading and collecting watches cites this period as the most difficult in his 30-year career.
'It was a very turbulent time for the company and personally a very challenging time for me as there were lots of painful decisions to be made and bitter medicine to swallow.'
But there were also the high points.
The inauguration of the A380 after the 18-month delay in delivery is without doubt one of those moments, says Mr Chew.
'As it turned out, the delay - which caused four CEO changes at Airbus - was a blessing for us in a perverse kind of way as it created more public interest in the product and enabled us to better prepare for its eventual arrival. For example, our new cabin suites are acknowledged industry-wide as being revolutionary. We turned an adverse situation into a remarkable success.'
He describes the A350 episode as another high point.
'We leveraged on SIA's global reputation and influence to persuade a planemaker to redesign a product to suit our needs,' he says. 'And it defined our position as an opinion leader in the business.'
But while celebrating what SIA has become, Mr Chew also warns that within success often lie the seeds of failure.
'The biggest enemy is complacency,' he says. 'If we believe we have already arrived, then SIA's days at the forefront of the industry are numbered.
'While recognising that we are good, we also have to be mindful of competitors nipping at our heels. For example, new Gulf carriers which have access to bottomless pits of cash and do not have to play to the same levels of responsibility to public shareholders have different objectives. But they also compete for the same markets with us, be it the 'kangaroo' route, North-east Asia or the Europe market.'
The answer, he adds, is superior service, a well-structured network and sheer hard work.
With two years to go before retirement, Mr Chew says that succession planning has already begun in the group.
'We have quite a few internal candidates who can step up to the plate,' he says. 'We are currently rotating them around to try them out. But that does not mean the board won't consider an outside candidate.'
At the end of the day, the airline business is about the people who run it, he adds.
'The difference is the people and the systems. These are very difficult to replicate - and the management organisation. We will have to work continuously to motivate our people and provide the service our customers are willing to pay for.'