Globally, Airlines Are Looking At Collaborations To Tide Over the Crisis: AirAsia's Karen Chan The airline industry is in a freefall due to travel bans across the world owing to the outbreak of the novel coronavirus
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
At a time when all businesses are fighting uncertainty, Karen Chan, CEO of AirAsia, believes that it is a time for leaders to lead with courage and character. "As a CEO or leader, the entire team feels your sentiments. There will be some down days. We need to be transparent and we need to have courage," said Chan, while speaking at an online session organized by Wild Digital.
Joining Chan in the online forum moderated by Total Sports Asia founder and group CEO Marcus Luer were OVO CEO Jason Thompson and iCar Asia managing director and CEO Hamish Stone.
The airline industry is in freefall due to travel bans across the world due to the outbreak of the novel coronavirus with revenue loss estimated to be $252 billion in 2020.
In such turbulent times, it's vital that industry players are agile and holistic at risk management, including accounting risk, along with economic risks. Driven by the European Securities and Markets Authority and other global regulators, there is a pressing need to focus on transparency in financial reporting and market disclosures.
Airlines are in need to appropriately assess how fleet groundings, travel bans, economic uncertainties and market volatility may affect accounting conclusions. Such considerations may include a change in depreciation methods, revision of salary, impact of extension in loyalty points expiration dates, re-assessment of forecasted fuel consumption and volumes of fuel hedged, re-assessment of existing operating leases (terms, payment schedules, option to purchase, sub-lease etc.), revision of aircraft maintenance and overhaul cost, among others.
According to Chan, this is a period of an unprecedented leadership challenge and there are three key elements of leadership at test.
First and foremost is protecting lives and the health and safety of employees, customers, and other core stakeholders impacted by the company's operation. Secondly, there is a spotlight concurrently on business continuity, supply chain resilience, financial liquidity and overall flexibility. This varies depending on the sector. Third, she advised to take a thoughtful look at who are the most vulnerable among their employees, workers, small business partners, customers, and the communities where they operate.
AirAsia has seen positive developments in its business operations with passenger seat booking trends, flight frequencies and load factors gradually improving.
"We are now signing contracts with multiple partners instead of investing too much; we have started doing collaborations, more focused to be faster in optimization," she added.
"In Asia, the core ethics is very strong; it has to be "ours'. The global markets - I think everyone is looking at how we can drive global growth. So a lot of CEOs are focused on working together," agreed Thompson.