By Arno Maierbrugger/Gulf Times Correspondent /Bangkok
The national airline of the small Southeast Asian Sultanate of Brunei Darussalam, Royal Brunei Airlines, has announced that it is preparing a new five-year business plan running from April 2016 through March 2021 which will see it pursue expansion of its regional network within Asia-Pacific, while it also focuses on partnerships in Gulf Cooperation Council (GCC) countries to promote travel destinations there.
One such cooperation is a recently entered strategic partnership with the emirate of Ras Al Khaimah in the UAE. In June, Royal Brunei Airlines and the Ras Al Khaimah Tourism Development Authority announced that they will promote Ras Al Khaimah to UK audiences as well as through the airline’s network in Australasia. Royal Brunei operates daily Boeing 787 Dreamliner flights from London to the UAE and from there to Brunei and beyond to more than 12 destinations in Asia-Pacific.
“The UK market will be a key focus of attention, and subsequently the partnership will be rolled out in other markets across Australasia,” said Dermot Mannion, Deputy chairman and CEO of Royal Brunei Airlines, adding that the airline “will shortly open a brand new travel office in Ras Al Khaimah as part of the arrangement in UAE.”
Mannion, who was appointed Royal Brunei’s head in 2010, previously worked as an executive for Emirates and in 2005 joined Ireland’s Aer Lingus as CEO, a post from which he resigned in 2009. Working for Royal Brunei, he spent the first years right-sizing the airline in the face of steep competition in Southeast Asia, reducing staff size to 1,500 from 2,000 and cutting around $100mn in costs as part of a stabilisation plan running from 2011 to 2015. The plan also saw the carrier drop five of its 18 routes – Auckland, Perth, Brisbane, Kuching and Ho Chi Minh City – and also proposed the idea of developing closer ties with a larger carrier, preferably from the Gulf, in the form of a joint venture or cross-equity shareholding.
However, so far there is no such partnership in sight. Royal Brunei moved back into expansion mode in 2014, resuming flights to Ho Chi Minh City and launching flights to Bali. But its current network of 16 destinations, including its hub at Bander Seri Begawan in Brunei, is still three destinations smaller than its network as of April 2011.
The airline, which recently celebrated its 40th anniversary, is also renewing its wide-body fleet and evaluating potential new destinations for 2016 and beyond. No new destinations are planned for 2015 and it is also unlikely that Royal Brunei will expand its long-haul network despite performance improvements following the transition to Boeing 787s. But it is seen that the carrier’s new A320neo fleet – the latest addition to the Airbus A320 family – will open up opportunities for new medium-haul routes to Australia, South Asia and North Asia. Altogether, over the course of the new five-year plan, Royal Brunei’s fleet will increase by four aircraft.
Although the government-owned airline does not disclose financial reports, it is known that it incurred huge losses prior to its 2011 restructuring and remains loss-making. After the first restructuring phase, which included rebranding, service enhancements and fleet simplification, the key challenge for Royal Brunei remains to chart a course for profitable growth over the coming five years. Apart from a possible partnership with a larger carrier, plans are position the airline as a “boutique full-service carrier” in the highly competitive Southeast Asian aviation marketplace.
Royal Brunei Airlines route map.