Royal Brunei Airlines outlook brightens as fleet is renewed and regional network expands

Royal Brunei Airlines (RBA) should start to see improvements over the next year in its long-haul operation after completing the transition to an all-787 widebody fleet. The long-haul network, which has been highly unprofitable and relies heavily on transit traffic, will also benefit from new regional feed from Bali and Ho Chi Minh.

RBA's short-haul operation, which is not nearly as unprofitable as it relies primarily on higher yielding point to point traffic, should also see improvements as the network is expanded. Larger gains will come in 2017 when the airline starts to take delivery of A320neos, which will reduce operating costs and open up new medium-haul routes that are too thin for widebodies.

RBA is looking at using the A320neo to resume expansion in Australia and launch services to South Asia. Beijing, Seoul and Tokyo may also be added as part of a new five-year plan. Modest expansion is a realistic scenario for RBA as the flag carrier is now tracking ahead of the targets set in its last five-year plan, which was prepared in 2011 and initially focused on a restructuring.