http://news.ph.msn.com/business/article.aspx?cp-documentid=3598752
MSN Philippines News, 20 Sep 2009
Singaporean boss pilots Australian carrier Rex to profit
Singaporean entrepreneur Lim Kim Hai is the first to admit that glamour and prestige did not even figure when he made the decision to invest in a regional Australian airline in 2002.
Seven years after Lim's big gamble on Rex, the domestic carrier born out of the collapse of Ansett is turning in healthy profits despite the dismal state of the global aviation industry.
"Glamour doesn't sell very many seats and glamour doesn't produce profits," he told AFP in an interview in his Singapore office, from where he runs the airline's headquarters in Sydney largely by remote control.
"If you are in it for the glamour, you will be in big trouble," said Lim, an engineer by training who serves as the airline's executive chairman.
Trouble was exactly the word to describe the state of Rex -- short for Regional Express Holdings -- which lost 35 million Australian dollars (30 million US) in its first year of operations in 2002 and needed a further capital injection to stay afloat, he said.
Lim and a Singaporean partner pumped another five to six million dollars into Rex, well aware of the odds stacked against them and the high probability of never seeing their money again.
Due to a confidentiality clause, Lim cannot reveal the amount he initially invested in Rex but says he is currently the biggest shareholder with a stake of over 20 percent in the publicly listed carrier.
In the first year of Lim's tenure running Rex, he turned the loss-making carrier around with a profit of one million dollars in the year to June 2004 as he initiated new practices to curb wastage and inefficiencies.
And Rex has never looked back since Lim took charge, churning out profits every year through to the current fiscal period ended June with profits down just 5.6 percent to 23 million dollars.
"Even though our profits were reduced, it's quite comforting in this environment," said Lim.
"Obviously we know how severe the recession is... So being able to overcome this year of really, really negative impact with relatively minor damage, I think it is quite satisfactory," he said.
Aviation analyst Peter Harbison said Lim injected a new management style into Rex, making the carrier a rare success story in a country where the airline industry has had a list of notable failures.
"He applied a lot of business sense and he brought solid business discipline," said Harbison, who is with the Sydney-based Centre for Asia Pacific Aviation consultancy.
Even Lim admits he did not give himself much of a chance in saving the carrier from the brink of collapse, but said giving up without even trying was not an option.
"The commonly accepted view at that time was the airline would last only six months," said Lim, who will turn 52 next month.
"We knew the difficulties and the decision to carry on was not so much not knowing the facts but more of saying here is an airline that is losing money but it is operationally doing okay.
"The airline was doing about 50,000 flights a year... So on the operational part of it, things were not broken, but on the profitability part, it was losing money quite substantially."
With the second round of capital injection coming entirely from him and his Singaporean partner, Lee Thian Soo, 54, Lim decided it was time for a fresh perspective on how Rex should be managed.
Lee is a Rex director and has other business interests in Southeast Asia including a medical equipment supply company and a mobile gaming firm.
"My business partner and myself agreed we will give it one more try. We may be foolish but we will try it one more time," Lim said.
"We dug into our pockets and financed it again and since every cent that is in the company comes from us now, we will do it totally our way."
The carrier has a fleet of 88 planes comprising mainly Saab 340 34-seaters plying routes in southeastern Australia, connecting the country's main cities to rural towns.
A one-way ticket is about 130 dollars on average, Lim said.
He says he makes just four trips a year to Sydney for the company's board meetings and maintains that running Rex from his Singapore office does not put him at a disadvantage.
"I think with technology today, it's very, very easy," said Lim, who gets up to 300 emails daily from his key management staff.
"We keep each other in the loop. All the time, I am getting information from everywhere so I am very connected virtually and have a good idea of what is happening."
Having an engineering background did help him in making the crucial decisions to turn Rex around, said Lim.
Rex's corporate website says Lim started his career as a defence engineer specialising in underwater warfare before he entered the corporate world.
"As an engineer, we are trained to think very, very rigorously and logically," he said. "So this training carries on into the business and I approach any issue (as) an engineer."
If he had known everything he knows today, Lim admits, he probably would have had nothing to do with the industry regardless of the prestige and glamour that comes with owning an airline.
"In hindsight, it was totally stupid and naive. We didn't know how treacherous airlines were," said Lim.
"I certainly wouldn't do it again. It is just too tough."
--------------
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MSN Philippines News, 20 Sep 2009
Singaporean boss pilots Australian carrier Rex to profit
Singaporean entrepreneur Lim Kim Hai is the first to admit that glamour and prestige did not even figure when he made the decision to invest in a regional Australian airline in 2002.
Seven years after Lim's big gamble on Rex, the domestic carrier born out of the collapse of Ansett is turning in healthy profits despite the dismal state of the global aviation industry.
"Glamour doesn't sell very many seats and glamour doesn't produce profits," he told AFP in an interview in his Singapore office, from where he runs the airline's headquarters in Sydney largely by remote control.
"If you are in it for the glamour, you will be in big trouble," said Lim, an engineer by training who serves as the airline's executive chairman.
Trouble was exactly the word to describe the state of Rex -- short for Regional Express Holdings -- which lost 35 million Australian dollars (30 million US) in its first year of operations in 2002 and needed a further capital injection to stay afloat, he said.
Lim and a Singaporean partner pumped another five to six million dollars into Rex, well aware of the odds stacked against them and the high probability of never seeing their money again.
Due to a confidentiality clause, Lim cannot reveal the amount he initially invested in Rex but says he is currently the biggest shareholder with a stake of over 20 percent in the publicly listed carrier.
In the first year of Lim's tenure running Rex, he turned the loss-making carrier around with a profit of one million dollars in the year to June 2004 as he initiated new practices to curb wastage and inefficiencies.
And Rex has never looked back since Lim took charge, churning out profits every year through to the current fiscal period ended June with profits down just 5.6 percent to 23 million dollars.
"Even though our profits were reduced, it's quite comforting in this environment," said Lim.
"Obviously we know how severe the recession is... So being able to overcome this year of really, really negative impact with relatively minor damage, I think it is quite satisfactory," he said.
Aviation analyst Peter Harbison said Lim injected a new management style into Rex, making the carrier a rare success story in a country where the airline industry has had a list of notable failures.
"He applied a lot of business sense and he brought solid business discipline," said Harbison, who is with the Sydney-based Centre for Asia Pacific Aviation consultancy.
Even Lim admits he did not give himself much of a chance in saving the carrier from the brink of collapse, but said giving up without even trying was not an option.
"The commonly accepted view at that time was the airline would last only six months," said Lim, who will turn 52 next month.
"We knew the difficulties and the decision to carry on was not so much not knowing the facts but more of saying here is an airline that is losing money but it is operationally doing okay.
"The airline was doing about 50,000 flights a year... So on the operational part of it, things were not broken, but on the profitability part, it was losing money quite substantially."
With the second round of capital injection coming entirely from him and his Singaporean partner, Lee Thian Soo, 54, Lim decided it was time for a fresh perspective on how Rex should be managed.
Lee is a Rex director and has other business interests in Southeast Asia including a medical equipment supply company and a mobile gaming firm.
"My business partner and myself agreed we will give it one more try. We may be foolish but we will try it one more time," Lim said.
"We dug into our pockets and financed it again and since every cent that is in the company comes from us now, we will do it totally our way."
The carrier has a fleet of 88 planes comprising mainly Saab 340 34-seaters plying routes in southeastern Australia, connecting the country's main cities to rural towns.
A one-way ticket is about 130 dollars on average, Lim said.
He says he makes just four trips a year to Sydney for the company's board meetings and maintains that running Rex from his Singapore office does not put him at a disadvantage.
"I think with technology today, it's very, very easy," said Lim, who gets up to 300 emails daily from his key management staff.
"We keep each other in the loop. All the time, I am getting information from everywhere so I am very connected virtually and have a good idea of what is happening."
Having an engineering background did help him in making the crucial decisions to turn Rex around, said Lim.
Rex's corporate website says Lim started his career as a defence engineer specialising in underwater warfare before he entered the corporate world.
"As an engineer, we are trained to think very, very rigorously and logically," he said. "So this training carries on into the business and I approach any issue (as) an engineer."
If he had known everything he knows today, Lim admits, he probably would have had nothing to do with the industry regardless of the prestige and glamour that comes with owning an airline.
"In hindsight, it was totally stupid and naive. We didn't know how treacherous airlines were," said Lim.
"I certainly wouldn't do it again. It is just too tough."
--------------
Latest @ Singaporenewsalternative.blogspot.com
1. S'porean entrepreneur turns loss-making Australian carrier to profit
2. Auto system entry into M'sia for frequent Singaporean visitors
3. OPINION: Tiny Singapore knows a thing or three about bubbles
4. Temasek Foundation Pledged US$1.15 Million To Fund Vietnam Technical Courses
Latest video added:
1. Singapore F1 2009 Insights
.
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