Recognizing that much of its growth will come from marketsoutside the United States, Hawaiian Airlines opened new routes todestinations in Japan and South Korea this year, and it did sousing a project-management approach the company evolved when itbegan service to the Philippines in 2008.

Demand from a country's consumers for travel to Hawaii andrevenue opportunity are the key factors in deciding on new routes.However, whether it's entering a developed economy like Japan's ordeveloping markets like South Korea and the Philippines, theHonolulu-based airline with $1.3 billion in 2010 revenue follows aprocess that begins with assessing the revenue opportunity, costsand regulatory hurdles.

“We've developed a repeatable process around the entry into amarket, especially if it's a country we haven't served before,”says Peter Ingram, Hawaiian Airlines' CFO since2005.

Ingram says the airline's marketing, finance, legal andoperations departments work together closely to decide whether to enter a country.Revenue may appear promising to marketing and sales executives, butif operating expenses are prohibitive, then the opportunity may belimited.

Treasury and finance address many of the operational details,Ingram says, including processes for hiring and paying employees,tax filing requirements and how payments are processed. HawaiianAirlines discovered, for example, that not all credit cards inSouth Korea were affiliated with a big processing system and nothaving the right mechanism to process those card payments couldresult in lost sales.

“We had to learn about popular forms of payments there, so whenwe were setting up our Web site to sell tickets in Korea we couldset up as many possible forms of payment that our customers wantedto use,” Ingram says.

Many South Korean credit cards are unique to specific banks, headds. “So we had to set up separate mechanisms in our credit cardacceptance process to process those cards and feed the informationto the appropriate bank.”

That involved dealing with the banks in a different language,culture and time zone, and adapting to local business practices.Ingram says addressing those issues with local sales agents thatthe company is often already working with in other parts of thebusiness, such as cargo, has proved invaluable. In fact,identifying sales agents is a key part of Hawaiian Airlines'process for entering a new country and typically an early one,since the airline usually has already established an economicpresence there, perhaps to sell interline tickets, those used bytravelers whose trips involve multiple airlines.

Ingram says the company is building those types of relationshipsin China, where it's still difficult for nationals to get visas tofly to the United States. When the restrictions ease, he says,“we'll take the experience we're learning today by building a salespresence and commercial relationships in that marketplace to easethe transition into operating there directly with our ownmetal.”

Ingram says Koreans purchase tickets through travel agencies andalso over the Internet, a method that is less common there than inthe U.S., although more common than it is in Japan.

Hawaiian Airlines was well-acquainted with tackling thedistribution channel of travel agencies. Although it has been atleast a decade since travel agencies were a significant channel inthe U.S., they're still prevalent in the Philippines, where theairline began flying in 2008. The Philippines travel-agencyindustry is highly fractured and competitive, Ingram says, andhaving a local general sales agent was very important inunderstanding which agencies were most relevant in terms of travelbetween Hawaii and the Philippines.

The airline supplemented the information from the local generalsales agent with data generated by organizations such as theInternational Air Transport Association. “There's data mining wecan do to learn where tickets are being bought and which bases weneed to touch,” Ingram says.

Hawaiian Airlines found that much of the travel between Manilaand Hawaii reflects visits to friends and family, and consequentlya lot of the travel decisions are made in Hawaii, he says. “Soreaching out to the Philippine community here in Hawaii, throughcultural organizations or travel agencies that do a lot of businessfor travel between the Philippines and Hawaii was an important partof preparing ourselves.”

Hawaiian Airlines' finance executives are tasked with figuringout distribution channel and other costs. “We set prices and buildexpectations about what demand is in the market, based on all thecosts of operating there,” Ingram says.

He says repatriating currency from South Korea and thePhilippines is relatively easy. That's important for U.S. airlines,he adds, because unlike many other industries, they collect foreigncurrency in ticket sales, but most of their expenses, such as fuel,labor and leasing aircraft, are denominated in U.S. dollars. So theairline takes in significantly more revenue in foreign currenciesthan it has in expenses in those countries. Hawaiian Airlines'treasury aims to leave just enough revenue in the countries towhich it flies to cover expenses there and bring the rest back tothe U.S. to cover domestic expenses.

“The last thing we want to do is enter a market and generatelots of revenue and then find we can't actually touch it,” Ingramsays.

See more stories hereabout countries where multinationals have spottedopportunities.