This premium airport lounge is not class conscious

As an investment banker, Song Hoi See always flew business class, which entitled him to the services of luxury airline lounges. He thought nothing of the food and drink and shower and business facilities on tap - until he struck out on his own in 1992 and was compelled to fly economy for the sake of his pocketbook.

It was then that the Johor-born Malaysian, now 56, began thinking about it seriously. He said: "It was frustrating for businessmen like me in economy. There was no place from where we could send faxes or to take a shower or to rest. I used to have to steal electricity to charge my computer."

His "eureka" moment was tied to a simple truth - that everyone, even economy class passengers, needed an oasis in airports and would be willing to pay for the privilege.

And so Plaza Premium Lounge Management (PPL) was born. The firm, incorporated in Hong Kong where Mr Song lives, is a pioneer in the concept of the airport-based, premium service lounge for airline passengers - regardless of airline or class of travel.

It clearly plugged an area of need: in its 15-year history, PPL has grown into a HK$1 billion (S$161 million) enterprise with a network of 110 lounges in 29 countries. It has offices from Mumbai to Melbourne and from London to Langkawi; it hires more than 2,000 people worldwide and serves more than four million passengers a year.

A clutch of imitators have appeared, but PPL remains the dominant player in retail aviation - it is the first choice in new airport terminals. Heathrow, for example, recently tapped him to run a lounge in its new terminal building.

The firm has grown exponentially in the last five years, aided by corporate cost cutting after the global financial crisis - resulting in fewer business class flights - and the advent of the Asian budget traveller.

Mr Song does not intend to slow down his expansion anytime soon. With more than 700 international airports around the world, he believes he has uncovered only the tip of the iceberg. He is planning for 50 more outlets by 2015.

He wasn't always in such a "sunrise" business. By the time he was 33, he was a senior vice-president with Lehman Brothers in Hong Kong and not seeing much of a way up that corporate ladder.

In 1992, he struck out on his own, creating instant offices by renting out vacant office spaces, furnishing them and then leasing them out as office spaces in move-in condition.

It was a good business. Over the next five years, he set up 14 such offices throughout South-east Asia, but once he hit upon the idea of running premium lounges in airports, he sold off this business.

He said that on hindsight, the business model for airport lounges seemed like a no-brainer. "Eighty-five per cent of all passengers fly economy, but no one was looking after them. Waiting around, especially in a hub airport, takes a toll on mind and body."

It was 1997 and two new airports - the Kuala Lumpur International Airport (KLIA) and Hong Kong's Chek Lap Kok - were opening within weeks of each other. He submitted his plans for both and they were accepted, he said. "But it was expensive, they insisted on quality. I used all my life savings - the lounge in KLIA cost RM2 million (S$777,000), and the one for the Hong Kong airport, RM4-5 million."

With money invested, he went through nail-biting tension. In nine months, the lounges began turning around. With its success at the two airports, PPL's business became self-generating. Airport managements, seeing the value-added service he was capable of delivering, came a-knocking. Then, airlines began engaging PPL to manage their lounges.

Mr Song also got into setting up transit hotels, where passengers are offered small, clean rooms where they can take a shower and rest between flights.

But ultimately, he said, the business has simply been demand-driven. "More than half the world's middle class who fly are from China and they have money. That's why we've grown so fast. In the first 10 years, we had 50 outlets. Over the next five, we simply doubled the number."

Asked whether he would consider listing his company, he replied: "I don't need to. Money isn't everything anymore. This - I enjoy it, it's become a process of self-actualisation. I am Malaysian but I am now all over the world."

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